LB – (Needs updating) Tax preparation and planning (for individuals and small business)

Check out tax brackets and rates, exemptions & deductions, thresholds, credits etc. on Quickfinder summaries for (Contact Fran for info to buy the excellent Quickfinder Handbooks:

Click here for Individuals                                         Click here for Small Business

A. Tax preparation services for individuals and small businesses:

Fran Sisco has been a CPA for over 30 years and has served over 500 clients in matters from the simple to the very complex. She has developed a unique tax preparation method that reduces the incidents of mistakes by tax preparers and clients and identifies areas of saving taxes and other financial planning opportunities. In the case of small businesses, she works closely the owners and staff to streamline the accounting and bookkeeping functions and to ensure accurate internal reporting and tax returns. Fran also works closely with other CPAs, accountants and financial service providers.  She has installed Quickbooks and MYOB’s Account Edge systems in many client businesses and for individuals.  Her hourly fees are modest in the context of her expertise.

An important way to make sure your taxes are completely properly and that you are saving as much as possible is to complete my Instructions checklist and complete the pertinent sections of my 12-page Organizer Forms (obtained from Quickfinder). Click here for the page with this info for you to download and/or print, and then get to me by regular mail or email.

B. Tax planning services for individuals and small businesses:

When getting a new client, Fran Sisco often finds that certain matters are frequently overlooked by the prior tax preparers, such as the following:

(1) For businesses with losses, there should be related strategies to best use those losses. In the case of sole proprietorships, S Corporations and LLCs, it may be appropriate to use the losses by withdrawing funds from retirement accounts including IRAs, annuities, etc and/or doing Roth conversions. Too often this big tax planning opportunity is overlooked.

(2) S Corporation owners should draw sufficient salaries.  If they do not keep track of their profits during the year, sometimes they complete a year without drawing enough salaries that is necessary to maximize the amount to contribute to retirement plans and reduce taxes.

(3) Planning before 12/31 is essential to minimize taxes. Certain timing strategies can be quite effective in reducing taxes. (including AMT planning),

(4) For wealthier taxpayers, thoughtful gift planning can save later estate taxes.

(5) Sole proprietorships – Employing spouse and children to reduce taxes, Section 179 expensing, buying vs. leasing a vehicle, deducting business bad debts, business use of home. medical reimbursement plans

(6) Compensation – Incentive Stock Options (ISOs), Non qualified Stock Options (NQSOs)

(7) Stocks, Bonds, Mutual Funds, ETFs, etc.-

Planning for capital gains rates (e.g. gifts of low-basis investments to low-bracket people like children;

timing sales of securities to minimize taxes, taking advantage of stepped-up basis;

qualified dividends get lower tax rate, can elect to accrue interest on US. savings bond that could be beneficial in a low-tax year, swapping bonds to claim losses, Section 1244 small business stock permits investor to claim ordinary (rather than a capital) loss on disposition of eligible small business stock (maximum is $50,000 per year ($100,000 MFJ), Qualified Small Business Stock (QSBS) allows owners of QSBS (e.g. issued by a C corporation with total gross assets of $50 million or less at all times after 8/10/93) to (a) exclude all or part of the capital gain on the sale of QSBS (Section 1202) or (b) roll over the gain (Section 1045);

Wash sales rules can be avoided by reinvesting in stock in the same industry,

worthless securities can be claimed as capital losses,

investors vs. traders,

mark-to-market accounting for electing traders,

ways to maximize investment interest expense deduction,

(8) Real estate

Maximizing real property depreciation (e.g. cost segregation, land-to-building cost allocation, capital gains rates depend on time property is held, tax rate that would apply if no preferential rate, and recapture rules depending on what type of property; installment sales can spread tax and taxpayers can elect out if it is preferred to claim gain all in one year;

like-kind exchanges (Section 1031) avoid current taxation when one property is replaced with like-kind property;

a house that is rented to others and never used by the owner should qualify;

Cancellation of Debt (COD) income can be excluded in certain instances (e.g. borrower is insolvent or bankrupt),

abandonment of business or investment property can result in and ordinary loss (However, a voluntary transfer of property in lieu of foreclosure is not an abandonment, because it is treated as the exchange of property to satisfy a debt,; Despite rental real estate being a passive activity, an owner is allowed up to $25,000 in rental real estate losses that can offset nonpassive income such as wages or portfolio income,

(9) Children –