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Tax Preparation Services

Tax Planning

Tax Planning

It is our job to see that you pay no more tax than the law requires.

We monitor the changes in the tax law that could affect you and recommend tax-saving strategies. We will prepare all your tax returns and serve as your advocate in all tax matters.

If you are contacted by any government agency concerning your tax matters, your first call should be to us. We will take care of it so that you can get on with your business.

Tax planning and identifying tax-cutting techniques can be complicated if you are not familiar with the language of the tax code. We will work to help you understand the opportunities and benefits of tax planning as it applies to your specific situation.

There are actually several basic tax-cutting strategies, and most plans involve one or a combination of them. In a nutshell, the strategies are:

  • Splitting income among several family members or legal entities in order to get more of the income taxed in lower brackets.
  • Shifting income from one year to another in order to have it fall where it will be taxed at the lower rate.
  • Shifting deductions from one year to another to place them where the tax benefit will be greater.
  • Deferring tax liability through certain investment choices and through pension plan contributions.
  • Structuring your affairs to obtain a tax deduction for some expenses paid for things you enjoy — a vacation home, for example.
  • Investing your money to produce income that is exempt from either federal or state income tax, or both.

Contact us and we'll discuss your financial and tax situation and determine how we can help you.

Tax Problems

Tax Problems (IRS, State, or Local)

Tax issues originate from the IRS, a State or Local Tax Office, or the Department of Labor. If you have received a letter, a call, or a visit from any of these, we can help.

  • Audit Representation
  • Delinquent Tax Returns
  • Multiyear Non-Filer
  • Tax filings in need of corrections
  • Liens & Levies
  • Appeals
  • Offers in Compromise
  • Installment Payment Plans
  • Innocent Spouse / Injured Spouse Relief
  • Any Letter or Notice from a taxing authority

Regardless of the issue, we can devise a strategy and assist you with the best resolution that fits your circumstances.

General Information

Only a small percentage of all the individual tax returns filed each year will be audited. The selection process is done largely by computer models. These were designed by looking at millions of tax returns and developing "norms."

If your tax return has numbers that fall very much outside these norms, your chances of being audited increase.

Individual returns are divided into groups based on the type of work you do and the level of income you report. For example: The IRS expects to see a certain amount of itemized deductions on tax returns reporting between $50,000 and $100,000 of income. Doctors with a certain specialty in a given geographic area are expected to report a certain amount of gross income. The groupings, breakdowns, and average dollar amounts are a closely guarded secret by the IRS.

Business returns are grouped by the type of business and their geographic location.

If your income is unusually low or your deductions are unusually high for a given year, you should attach an explanation to your tax return. After the computer selects a return for possible audit, a human being examines the return to see if the computer made a proper selection. Your attached documents may keep you from getting contacted by the IRS.

Congress is alarmed by the latest IRS estimate that about $450 billion is lost to those who cheat on their tax returns.

Three Main Types of IRS Audits

There are three main types of audits done by the Internal Revenue Service.

  1. The simplest is the correspondence audit. You will get a letter from the IRS requesting that additional information be mailed to them or that a proposed additional amount of tax be sent in.

  2. The second level of audit is the office audit. You will be asked to bring certain information to the IRS office for review.

  3. The most complete audits are called field audits. They are conducted at your place of business. It is best to avoid these if possible. Once the agent is at your place, he or she has much more to see and ask about.


Red Flags

The Internal Revenue Service is interested in auditing returns that are most likely to produce additional revenue. Here is a list of some of the items which draw attention to your tax return:

  • Participation in tax shelters, including offshore trusts.
  • Use of offshore credit cards.
  • Your occupation if you are in a business which is often paid in cash, such as taxicab driver, hairdresser, or waitress.
  • Businesses run by a single family, especially those reporting on Schedule C, since they often make all the decisions and do their own recordkeeping.
  • Returns claiming a home office deduction.
  • Big deductions for business travel and entertainment expenses.
  • Sloppy tax return preparation.
  • Returns that are filed without the necessary supporting tax return schedules.
  • Business losses several years in a row.
  • Low S corporation shareholder salaries in relation to other distributions.
  • A major change in your income compared to your prior tax returns.
  • Deductions for automobile expenses.
  • Noncash charitable contribution deductions.
  • High mortgage interest deduction and low income.
  • High damage or theft loss deductions.
  • Early withdrawal from an IRA account which is not rolled into a new account or reported on your tax return.
  • Deductions for "independent contractors" (versus employees) on business returns.
  • Conviction of a money crime where stolen property or stolen money is taxable.

This is only a partial list. There are different red flags for different industries, professions, and income levels. The IRS is constantly changing what it uses as audit indicators.

Document Matching

If you fail to report income on your tax return which was reported to the IRS on a document (such as an interest statement from your bank), the audit adjustment is all but automatic. If you receive interest, brokerage statements, or other information returns with the wrong amounts, try to get a corrected copy. If you can't get a corrected copy, include your explanation with your return as to why you are reporting a different number on your return.

What To Do If You Receive an Audit Notice

If you receive a notice from the IRS, don't ignore it. You can rest assured that the IRS will not just go away. All contacts by the IRS should be handled promptly. Unless you are an accomplished IRS "fighter," you would be wise to seek professional assistance from the very first correspondence.

Getting "chatty" with an IRS agent or providing information or documents which you were not asked to provide is ill-advised. Such excess information may expand the audit into areas which were not of initial interest to the agent. Your attempts at being friendly with the agent may end up costing you more time and money than is necessary.

On the other hand, the only taxpayers who need to fear the IRS agent are those who have cheated on their tax return or who can't provide the documents necessary to support the numbers on their return.

In a Nutshell

If your tax return looks unusual when compared to your prior-year tax returns or when compared to industry or occupational norms, there is a good chance that you will hear from the IRS. Your best defense against a potential audit is a properly prepared and properly documented tax return. If you haven't used a professional tax preparer before, now may be the time to engage one.

Consulting Services

Consulting Services

We do more than just tax returns — a lot more! We can assist you with many other financial matters.

Among the other services we provide are the following:

  • Business succession planning
  • Forensic Accounting
  • Projections, budgets, goals
  • Retirement planning
  • Business problem solving
  • Divorce tax planning
  • Computer selection and use
  • Business sales and acquisitions
  • Lease-buy decisions
  • Business expansion
  • Real estate sales and acquisitions
  • Inventory control systems
  • Equipment purchases and sales
  • Office systems and controls
  • Financial and estate planning
  • Planning for education expenses

Please contact us with your questions.

Our services include more than just tax returns. And when appropriate, we can refer you to professionals that can assist with any of your related needs. We're here to help you succeed with your business and personal finances.

Accounting Services

Financial Statements

Financial Statement Preparation

We can prepare or supervise the preparation of your financial statements.

More importantly, we can help you use these statements, as well as other reports, to better manage your business and increase your profitability.

Good financial records are necessary for several reasons:

  • Daily operating decisions are based on financial reports.
  • Bank loans require reports of past performance.
  • Tax return numbers need proper substantiation.

Prepare financial reports monthly. For year-to-date comparisons and to make quick management decisions, financial reports must be done monthly. "As goes the month, so goes the year." You can compare the sales, gross profit, and net profit at, say, the end of May, with prior years and get a good idea of how the current year will finish. You can compare the total accounts receivable or payables with prior years to spot problems and then quickly take corrective action.

Here are some common business ratios you should monitor on a month-by-month and a year-by-year basis:

  • Current ratio — Current assets divided by current liabilities will measure your ability to pay your current debts.
  • Debt to equity ratio — Total liabilities divided by net worth will provide you with a year-to-year comparison of your ownership in the company.
  • Receivables outstanding — Receivables divided by average day's sales will give you the number of days' sales on the books.
  • Profit margin — Gross profit divided by net sales will allow you to compare your business operations to other companies in your industry, as well as monitor your own operations over time.

Understanding financial statements can increase business profits. If you would like to learn more about using financial statements to make sound business decisions, we will be happy to assist you. No one was born understanding financial information, but it is easier to learn than most people think.

Give us a call; we're here to help.

Bookkeeping Services

Bookkeeping Services

Get bookkeeping and payroll services tailored to your needs.

Spend your time building your business — and your profits; let us handle your bookkeeping, recordkeeping, and report filing.

We can provide as many of the following services as you want:

  • Maintaining sales journals and general ledgers.
  • Bank reconciliations and providing cash balance reports.
  • Preparing all required business tax reports and filings:
    • Sales tax filing
    • Municipal property tax declarations
    • Municipal rental property declarations
  • Preparing customized reports to address specific concerns requireing attention.
  • Payroll servies customized via our servicing partners.

Where do we begin?

We'll work with you to identify the services you need. Then we'll set up a schedule so data is collected, recorded, and handled efficiently and timely.

How much will it cost?

You're likely to save more than our services cost. Your in-house staff needs will be reduced, so you will reduce associated employee costs such as payroll taxes, employee benefits, training time and expense, equipment and software costs, and employee management costs.

Best of all, your bookkeeping and accounting functions will be taken care of, so you can concentrate on running your business. Contact us for an estimate of the cost savings for your business.

Other Services

Estate & Gift Tax Planning

Estate and Gift Tax Planning

A little planning can save thousands of dollars!

Most people don't like to think about death, much less plan for it. And since there is no legal requirement to do estate planning, many of us put it off. Yet the truth is that investing a little time in estate planning can pay off in lower taxes and administrative costs, increased financial security for your loved ones, and best of all, your own peace of mind.

Estate planning is not just a task for the wealthy. Tax implications kick in depending on the value of your estate and the federal and state laws in effect at the time of your death.

The value of your home, your personal property, your business interests, your collectibles, your investments, including your retirement accounts, and possibly your life insurance can all enter into the estate equation.

Use our estate planning calculator to help you determine what your estate is worth.

Basic estate planning documents allow you to control the fundamental financial and personal decisions of your life and death. Here's a list of the essential documents that even the simplest estate plan should include.

Essential documents

  • The will. Where there's a will, there's a way — a way to honor your wishes. How, when, and to whom will your property go? Who will be the guardians of your minor children? Without a will, these decisions will be made by strangers in a court system using rules that could be contrary to your intentions. Keep in mind that a will controls only the distribution of your probate estate. It does not control assets held in trust, certain joint assets, retirement accounts, or life insurance policies on which you name beneficiaries.
  • Information memo. Keep a list of your insurance policies, bank accounts, investment and retirement accounts, businesses you own, outstanding debt, credit cards, tax-related documents, income sources, and other financial information. In addition, include the names and phone numbers of your accountant, lawyer, doctor, and insurance agent.
  • Durable power of attorney. This critical document enables someone you choose to conduct your financial affairs if you become incapacitated.
  • Directive to physicians. A directive to physicians (also called a living will, health care directive, or some similar name) documents the medical treatment you wish if you become incapacitated. It lets you name the individual(s) you wish to make your medical decisions if circumstances keep you from making them yourself.
  • Funeral instructions. Include your burial wishes and a list of relatives, friends, and business associates to be notified upon your death.

Keep your original documents in a fireproof safe or with your attorney. Put your list of documents and the copies in a binder at home, and tell your personal representative (executor) where the binder is located.

Keep your plan current

Estate planning is an ongoing project. Review your plan and documents on a regular basis to ensure that they are up to date for current tax law and your personal situation.

Some gift tax planning possibilities:

  • Annual gifts
    Current tax law allows you to give away a certain amount each year to as many recipients as you choose with no gift tax consequences. Your spouse may join in this annual gifting even if he or she is not an owner in the transferred asset. This means that you could transfer double the exempt amount each year to each of your heirs. To double the annual exclusion yet again, you may want to include spouses of your children. The person receiving the gift does not need to be related to you. These annual gifts do not reduce your estate tax exclusion.
  • Unlimited gifts
    You can make unlimited gifts to pay for another individual's medical expenses or school tuition as long as your payments are made directly to the institution.
  • Property transfer
    If you have property which is not needed for your retirement, maybe it is a candidate for transferring during your lifetime. If it is a large income-producer, the future income will be taxed to the new owner and not to you, plus the property will be out of your estate.
  • Spousal transfer
    You can make unlimited transfers to your spouse either during your lifetime or through your estate. There are no taxes on spousal transfers, regardless of size.
  • Life insurance proceeds
    With proper planning, certain life insurance proceeds can be kept out of your estate.

If you'd like details about estate planning or assistance in developing or reviewing your estate plan, please contact our office. We're here to help.

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