TaxMedics, a Trip Through Time, Struggles, and Success

TaxMedics is a story of believing, hard work, set backs, and ultimate success. In 2002 after weathering some significant health problems and 2 teenaged daughters at home, Shannel and I decided we wanted to be a little more in control of our future. Even though we had earned 6 figure incomes in previous years together, we were looking for something that drove us more than just making money for other people. We decided we wanted to show our girls and ourselves that we could make a difference in peoples lives and business lives.

We sat down and talked and decided that we both believed that small businesses were the lifeblood of America but few people or businesses were focused on helping them get started, grow, and protect themselves from all the gotcha’s in the business world. While sharing this dream with friends we met a group of gentlemen that owned a number of Tax Preparation Offices. They struck a deal with us to manage and operate one of the offices and be the lead for the other offices, such as handling technical tax questions, software questions, and for us to prepare and review all of the business returns that came in to all of the other locations. Our deal was based on us drawing a weekly amount for payroll for our staff and then a lump percentage of the all the stores payable to us on May 1st of that year.

Everything seemed to go right in the opening weeks of Tax Season and we seemed to be headed to an excellent season when a large conflict arose that ultimately bankrupted the group.

So basically my wife and I worked from January through April 15th and didn’t get paid anything for four and a half months of work and were now out of a job. Not really the best way to start our business.

We were offered the leases on the 101 S Washington Street in Kennewick as well as a location in Pasco. I had negotiated both of these leases for the company and we decided to jump in.

We made it through the first year on our own, but it wasn’t easy. There were a lot of unexpected lessons we had to go through, remember we started this business not getting paid for working the first four months. The following year we just kept plugging along getting more business and investment based tax clients and survived that year. We were still financially backwards, but we were still alive. After our 2nd complete Tax year, 2 important things happened. First the IRS stopped notifying Tax Offices if the person was going to get their tax return for the refund anticipation loans. The refund anticipation loans were a large portion of the income for a lot of tax offices.

Next our Pasco location lease was up for renewal and the Owners got an offer that was almost too good to refuse. We initially discussed staying the location but after reviewing our clients and our goals, we decided it made sense to consolidate into one location. So we moved all of our equipment to Kennewick and cut our fixed expenses but over 65% for the year. We were worried we might have made a mistake but the next year over 80% of the Pasco clients came over to Kennewick and many are still clients today. This is where the story of TaxMedics begin to show promise.

After the 4th year, our business model began to take shape. We still did and do lots of personal tax returns but our real niche became helping small business make it and grow. Because the traditional tax office is a very cyclic business we needed to find a way to stay engaged with our business clients all year round. As we brain stormed how to do this we began to see that lots of our business clients need to understand and setup entities for taxation control and for asset protection. So we traveled out of state and took oodles of hours of training and purchased software and support and became very knowledgeable in the LLC and Corporation area along with Asset Protection. When started offering it to our clients, the business began to grow all year round.

Over the next few years we polished our Entity Creation model including becoming a Washington State Commercial Registered Agent and having our Operating Agreement reviewed by several large law firms. We also began to realize a lot of our businesses were looking for simple retirement plans to put money away for the future. We partnered with CompleteIRA and began teaching and marketing a Self-Directed 401k plan and it has become a staple in business now for over 10 years. And at the beginning of 2018, we were approached by the president of CompleteIRA, Joshua Sharp, to become a Tax Consultant for the company.

The next step we saw demand for was 2 different services, one to fix a major problem we were seeing in our business clients and Independent Contractors and then a service to prevent this problem for them. The problem was that many small businesses and Independent Contractors were falling behind or getting audited by IRS, Labor & Industries, or Department of Revenue and didn’t know how to handle these audits and losing large amounts of cashflow to these audits. So we started representing these clients and educating them on the rules and requirements no get into compliance with these Governmental Agencies. The second thing we did was begin providing simple bookkeeping and payroll services to stop them from getting into the position to begin with.
Today our Tax Resolution and Bookkeeping/Payroll division accounts for about 40% of our annual revenue and appears to be growing consistently every year.

But I think the thing that keeps TaxMedics so strong and vibrant is our people and our passion to help every size of business, from startup to flourishing business, to get help and education they need to survive. My wife and I talk almost every week about the stories, passion, and determination of the people and businesses we meet with. We feel that our continued use of our free consultation lets our clients ask questions or discuss strategies to grow, protect itself, or avoid excessive taxation without having to worry about the cost of talking with us.

These free consultations have helped us understand and get to know our clients and we believe it has helped them get to know us. And most importantly to us, we have built strong and loyal client base, but many of our clients have become more to us, they feel like friends and family.