@cleetree – if you are still here I'd like to hear more about the 60/40 split.
My boss' firm is a sole prop and he is on his stage to retirement, so we plan to form a partnership with a 60/40 split of the profits for at least 2 years with me eventually purchasing his share of the firm for 20% of the 5 subsequent years billings after the purchase. Then ultimately I will own the firm outright, which I am unsure if I will keep as a sole prop or form another partnership.
I finally got some numbers from the boss last night after I gave him my 3rd passing score in 3 months, REG with a 96.
He's been brushing me off for over a year now, so lastnight I told him his refusal to talk about any hard numbers has me questioning my future at the firm.
I agreed to stay in 2012 for a low 40's salary with 10 years experience on the condition/understanding that I was working for something for the future ie: sweat equity.
So last night he told me he was thinking 20% after I pass, and then more each year, eventually working up to 50% over 3 or maybe 4 more years.
Last year I worked more than half the billable hours at the firm, and billed out over half of the firms work.
I am curious if your 60/40 arrangement includes equal salaries for both partners? Or how the compensation will work.
I know of one firm in my area that has less than 5 unequal partners, but they are all paid based on projected billings less their equal share of overhead. There is essentially little to no profit left over to be doled out based on partner percentage. So the harder/more you work and bill, you lose your equal share of overhead, and are able to make more.
I'm a little discouraged that my 15 years and 9 months to date is only worth 20%, considering I have gone well above and beyond the line of duty, and been so underpaid for so long. I am not sure if I have unrealistic expectations or if I'm just being taken for a ride at this point.
Last year he would typically show up at 2pm and worked until 9 at the latest, take an hour for dinner. Tues and Thursdays he showed up around 3 and 430 respectively. He was lucky to put in 35 hours a week during tax season. I estimate he pulled between 75 and 85% of his billings as compensation, whereas my total cost compared to billing was about 45% including employers share of payroll taxes. I can't help but feel like my hard work is going to subsidize his lifestyle.
Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)
FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)
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