Bookkeeping and taxes for consultants and agencies
Consulting businesses have simple books and complicated owner pay. Most of the savings come from the entity, the salary and the timing of estimates, not from chasing receipts. We keep the books clean, set up S-Corp payroll when it pays and prepare both returns.
Where do consultants overpay?
It's rarely a missing deduction. It's usually structure and timing.
The S-Corp, too early or too late
Too early and payroll costs eat the savings. Too late and you overpay for years.
Lumpy income, flat estimates
A big Q3 contract and the same estimate every quarter is how April surprises happen.
Subcontractors without paperwork
No W-9 and no 1099-NEC means penalties. We collect them as you go.
How do we set up a consulting business?
Usually a single-member LLC, often taxed as an S-Corp once profit supports it.
| Section | Accounts |
|---|---|
| Income | Project fees, retainers, reimbursed client expenses |
| Cost of sales | Subcontractors, project software, reimbursable expenses |
| Operating | Software, travel, meals, professional development, insurance |
| Owner | Officer salary, payroll taxes, distributions, accountable plan reimbursements |
- A solo 401(k), often the biggest single move
- Home office, through an accountable plan as an S-Corp
- Business meals at 50%, travel with a clear business purpose
- Health premiums, handled differently once you're an S-Corp
Working remotely for clients elsewhere usually doesn't create a filing in their state, but traveling there to do the work can. A few states tax nonresidents who work there even briefly. We look at where you actually did the work each year.
Which numbers matter when you sell time?
From your books and your time or invoicing tool.
Effective hourly rate
Revenue over hours actually worked.
Utilization
Billable hours against available hours.
Client concentration
How much depends on your top one or two clients.
Days to collect
How long invoices sit unpaid.
Subcontractor margin
What you keep on work you pass to others.
Owner pay mix
Salary against distributions, kept defensible.
Consultants ask us.
Ask anything else on a free 30-minute call.
Book a callSources: one-participant 401(k), home office deduction
Free tools: Self-employment tax calculator, Quarterly tax calculator, S-Corp calculator
When should a consultant become an S-Corp?
When profit is comfortably above a reasonable salary for your work. We run the numbers with your actual profit and state before recommending it.
How much should I set aside for taxes?
It depends on profit, state and entity. We calculate your estimates each quarter from real numbers, so you don't have to guess at a percentage.
Can you handle my agency's contractors?
Yes. We collect W-9s, pay contractors through Gusto if you like and prepare 1099-NEC forms at year end.
Tell us what's messy. We'll tell you what it takes.
Tell us what you need and get a fixed price before any work starts. No pressure and no contract.