Tax burden... am I doing this right?

by a searcher from Full Sail University

2 years ago

Trying to answer a sellers counter to my LOI, and want to make sure I'm really solid on how the taxes would work since margins are getting thin. Does this read correctly? Labeled across the top for help interpreting.

3 likes
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18 comments

professional from Walsh College of Accountancy and Business Administration

Not enough facts to comment, the tax rate appears to suggest a C-Corp at 21% and an estimated 5% state rate, if a passthrough, taxes may be higher. Consider hiring a tax advisor to review and comment on the tax section of your model.

1 month ago | like reply | 0 likes

searcher from The University of Michigan - Stephen M. Ross School of Business

^Searchfunder member‌ the other factor to consider is that you will need cash to reinvest for growth. Depending on the business and your strategy you may need to spend on equipment, marketing, hiring sales personnel, etc. You want to have a plan and a budget before closing on the deal and to make sure you have enough cash flow to grow the business.

2 years ago | like reply | 0 likes

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