AVL's Estimated Tax Tracker for LLCs
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AVL Growth Partners
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Estimated Tax Tracker Model
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November 2018
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Est Tax 9/15Est Tax 1/15
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July-AAug-ASep-EOct-ENov-EDec-EJan-E
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Income Statement (Example)
Key Points:
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Revenue
743,028698,239788,923804,000808,000811,000815,000
1) Safe Harbor Lessons Learned
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COGS495,032482,033503,991509,333505,000506,875509,375
2) Sometimes hard to "set aside" especially when the business needs the working capital!
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Gross Profit
247,996216,206284,932294,667303,000304,125305,625
3) Forecasting the Tax Distribution on the Balance Sheet so it shows "cash leaving the business"
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Operating Expenses
173,495194,337189,330184,930185,000185,000185,000
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Taxable Income
74,50121,86995,602109,737118,000119,125120,625
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PERSONAL TAX TRACKER
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Payments Made to Owner
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Guaranted Payments
15,00015,00015,00015,00015,00015,00015,000<<< Note: Owners often neglect to remember that no tax (or witholdings) has been paid on the Guaranteed Payments. So, owners forget to "set aside" ~40% of these guaranteed payments to pay tax on their personal taxes. Some companies will also do an "add on" distribution for the guaranteed payments, but this does not necessarily "solve the issue" in terms of forecasting cash for the business.
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40%
Tax Distribution for LLC Income
76,789138,745
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0%
Tax Distribution for Guar Pmts
0
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Tax Liability Tracker ("What I Owe")
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40%
Beg Liability Bal
0 35,800 50,548 049,895103,095156,745
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+ Guar Pmt Tax6,000 6,000 6,000 6,000 6,000 6,000 6,000
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+ LLC Income Tax29,800 8,748 38,241 43,895 47,200 47,650 48,250
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- IRS Pmts0 0 (94,789)0 0 0 (156,745)<<< Note: You can pay "safe harbor" to defer paying taxes until year-end, but don't be fooled that you're not going to have to have cash to pay it later. This tracker will allow you to keep an eye on what's going to need to be paid in the future if you're on Safe Harbor. Enter your "safe harbor" payments here instead of the full 40% of current estimates.
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End Liability Bal
35,800 50,548 0 49,895 103,095 156,745 54,250
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Personal Tax Savings "Escrow" ("What I've Saved")
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Beg Savings
0 6,000 12,000 0 6,000 12,000 18,000
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40%Set Aside / Save6,000 6,000 6,000 6,000 6,000 6,000 6,000
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Tax Distribution76,789 138,745
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Payments Made0 0 (94,789)0 0 0 (156,745)
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End Savings Balance
6,000 12,000 0 6,000 12,000 18,000 6,000
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Balance Sheet (Example)
July-AAug-ASep-EOct-ENov-EDec-EJan-E
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Cash100,000 88,370 97,323 187,060 271,920 358,545 310,925
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A/R186,501 208,500 210,500 225,000 235,000 250,000 272,000
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Other Assets
42,000 48,000 46,000 46,000 60,000 70,000 70,000
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Total Assets328,501 344,870 353,823 458,060 566,920 678,545 652,925
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A/P68,000 72,000 73,640 73,640 76,000 80,000 80,000
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Other Liabilities
46,000 42,000 36,000 36,000 30,000 24,000 22,000
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Debt225,000 219,500 214,000 208,500 203,000 197,500 192,000
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Equity
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Contributions50,000 50,000 50,000 50,000 50,000 50,000 50,000
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Distributions(250,000)(250,000)(326,789)(326,789)(326,789)(326,789)(465,534)<<< Note: By effectively forecasting the tax distributions in an LLC, you are creating a much stronger and more accurate view of the cash profile of the business.
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Retained Earnings115,000 115,000 115,000 115,000 115,000 115,000 115,000
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Net Income74,501 96,370 191,972 301,709 419,709 538,834 659,459
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Total Liab & Equity328,501 344,870 353,823 458,060 566,920 678,545 652,925
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0 0 0 0 0 0 0
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Cash Flow Stmt
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Net Income
74,50121,86995,602109,737118,000119,125120,625
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∆ in A/R
(21,999)(2,000)(14,500)(10,000)(15,000)(22,000)
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∆ in Other Assets
(6,000)2,000 0 (14,000)(10,000)0
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∆ in AP
4,000 1,640 0 2,360 4,000 0
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∆ in Other Liabilities
(4,000)(6,000)0 (6,000)(6,000)(2,000)
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∆ in Debt
(5,500)(5,500)(5,500)(5,500)(5,500)(5,500)
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∆ in Equity
0 (76,789)0 0 0 (138,745)
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Net Change in Cash-11,6308,95389,73784,86086,625-47,620
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Beg Cash Balance100,00088,37097,323187,060271,920358,545
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End Cash Balance100,000 88,37097,323187,060271,920358,545310,925
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