What happens if you skip this step ? Well , imagine discovering unexpected tax obligations just as you ' re about to close a major deal , or learning about penalties for tax compliance issues you never knew existed . These surprises aren ' t fun for anyone , and they often surface at the most inconvenient times . Plus , without understanding your full tax picture , you might miss opportunities to structure your operations more efficiently .
This is particularly important when considering your profit margins in new states . You might have calculated the potential profits from a new market expansion , but unexpected state tax obligations can significantly reduce or even eliminate those anticipated margins . What looked like a profitable opportunity could actually result in lost money if state tax implications aren ' t properly factored into your planning .
Making Smart Decisions for Your Business
Here ' s something important to know while your CPA firm handles your regular tax preparation , a nexus study is a separate , specialized service that requires specific engagement . Think of it like the difference between a regular check-up and a specialized consultation . Both are valuable , but they serve different purposes .
The scope of a nexus study depends on your unique situation – how many states you operate in , what kinds of business activities you ' re conducting , and how complex your operations are . It ' s not a one-size-fits-all service , and that ' s actually a good thing . It means you get analysis tailored to your specific needs .
Taking the Next Step
If you ' re wondering whether your business might benefit from a nexus study , let ' s talk about it . Maybe you ' re expanding into new territories , changing how you deliver services , or just want to make sure you ' re on solid ground with your current operations . While a nexus study is an investment , it ' s one that can provide valuable insights and help you avoid costly surprises down the road .
Remember , understanding your tax obligations is about having the knowledge you need to make confident business decisions . Your Rea advisor can help you evaluate whether a nexus study makes sense for your situation and outline what that process might look like for your specific business .
Joe Popp , JD , LLM
Principal joseph . popp @ reaadvisory . com
( 614 ) 923-6577
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