Our Top 10 Personal Tax Tips

Every year, Congress makes changes in the tax laws, so it’s wise to consider how your tax planning will be affected. Here are our Top 10 individual tax planning tips for this year.

  1. The Tax Advantages of Remaining Unmarried. Because of the ongoing same-sex marriage debate, the tax ramifications of marriage have recently been much discussed. Not all tax rules that apply uniquely to married persons are more favorable than those that apply to single persons.
  2. Tax Treatment of Legal Fees. Generally, legal expenses are non-deductible personal expenses. However, there are 7 specific instances in which deductions for legal expenses paid by an individual may be permitted.
  3. All Income Is Taxable Unless…While it is true that most everything of value received by an individual must be reported as income for federal income tax purposes, there are more than two-dozen specific exclusions.
  4. Earn College Credits and Tax Credits at the Same Time. The Hope Scholarship Credit, Lifetime Learning Credit, and other key considerations need not be a mystery.
  5. Application Of “Intermediate Sanctions” To Certain Not-For-Profit Organizations. IRS regulations governing intermediate sanctions in the non-profit field impose monetary penalties when “excess benefit transactions” with a “disqualified person” occur.
  6. Sharing Your Stock Market Losses With Uncle Sam. If you’ve lost money in the stock market, you should be aware of the tax breaks that capital losses can generate and how to avoid the tricky Wash Sale trap.
  7. To Roth or Not To Roth? That is the IRA Question! For many taxpayers, the Roth IRA is one of the best tax-advantaged retirement plans around. Are you eligible to harvest the grapes of Roth? Is a Roth IRA or a traditional IRA right for you?
  8. Two-year Requirement for Excluding Gain on Sale of Your Principal Residence. How do you measure periods of occupancy for the two-year-out-of-five test when you have two homes and live in both during the testing period? Much more is involved than simply counting nights.
  9. Partial Exclusion of Gain – Early Sale of Residence. Can you exclude any part of the gain from sale of your principal residence if you don’t live in it for at least two years? Yes, and here is a summary of special rules that apply to shortened periods of occupancy.
  10. Lump Sum Rollovers Gaining Momentum. If you’re leaving your job, you should be aware of the growing trend of rolling over your retirement savings to a new plan.

Overview of Personal Tax Services

Tax Preparation and Planning
Prepare individual federal and state tax returns (including states other than Illinois) and have very competitive rates which are based on the complexity of the returns. eFile and direct deposit of refunds are popular options that we offer. We encourage you to visit our Tax Center page to print out a Tax Organizer prior to visiting us for your tax preparation needs, and visit our FAQ page for information on what we will need in order to prepare your return. In addition to tax preparation for individuals, we also prepare other types of tax returns, such as Trusts and Gift Taxes. We regularly offer tax saving advice and periodically send you literature regarding the latest tax law changes and how they affect you. If you are anticipating any changes that may affect your tax liability, such as changes in income or filing status, we can prepare a tax plan for you so you will be ready as these changes occur.

Retirement Planning
It is never too early to start planning for retirement. If you want to live the same lifestyle–or an even better one–than you do now, you need to start planning for retirement…NOW. We specialize in long-term wealth building and management, and as a CPA Firm we know how your investment transactions can affect your tax liabilities. We can offer you the advantage of being able to use this information to incorporate investment strategies with tax saving strategies for your overall financial benefit. Contact us if you are interested in a portfolio review to be sure you are on the right track to reaching your retirement goals.

 

Pension & Profit Sharing Plans
We can help you decide which retirement plan is best for you, and then we will help you fill out all the paperwork necessary to implement it. For example, if you own a small business, we can show you how the new SIMPLE Retirement Plan can save you three to six times more money than an IRA, and how it’s cheaper to maintain and easier to understand than a 401K and other retirement plans.

Debt & Financial Services
We offer complete debt and financial counseling services, including installment debt consolidation, refinancing, and repackaging. Our mortgage originator license allows us to help you get a mortgage or to refinance your existing mortgage. We can also assist you with creating personal budgets and forecasts, tracking your daily transactions in order to analyze and fine-tune your spending and savings habits, and help you with your planning to reach financial goals like saving for a big purchase or vacation, starting a business, or buying a house.

Overview of Payroll Services

We use the latest technology to offer a new “Payroll Solution” for your business

  • Would you like to process your own payrolls with guidance from our accounting firm?
  • Do you want to run your own payrolls anytime, anywhere?
  • Do you need to run your own payroll from mobile devices?
  • Are you looking for a full-service payroll service that’s competitively priced?

  

Flexible, Customized Payroll Services

While many payroll companies offer a take-it-or-leave-it, cookie cutter approach, we tailor our services to meet the needs of each individual client…and our personalized payroll service is more cost-effective than ever before.

Our payroll solution is accessible 24×7 on the Internet, ready for you to use anytime, anywhere, from any device.

 

What does our Payroll Solution offer?

  • Completely automated payroll processing – you simply enter payroll data over a secure Internet connection and the solution does the rest.
  • Most importantly, the unmatched benefit of our personal service and our trusted, professional relationship with you.

 

Benefits of Personalized Payroll

  • You and your staff can concentrate on growing your business, rather than spending valuable resources on payroll compliance and reporting.
  • You no longer have to worry about payroll and taxes or complex reporting requirements and changing tax laws…our Payroll Solution handles it all.

Overview of Accounting Services

We provide you with a monthly or quarterly income statement and balance sheet which compile your financial transactions for the period. These financial statements are custom designed for your type of business. They may include reports which give you comparisons of actual results with budgeted, or current year results with prior year results. These statements include a general ledger, payroll journal and bank reconciliation. We will show you how to use these “tools” to run your business successfully.

 

Compilation and Review Services

Our firm provides professional compilation and review services to businesses of all sizes. We prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP) or other basis of accounting for use by banks, investors, and other third parties.

 

Financial Forecast and Projections

We can work with you each year to develop a monthly budget for the upcoming year. Coupled with the financial statements we give you, these reports will be your tools that tell you how your business did versus what you planned.

 

Tax Services

We prepare all your taxes – payroll, sales, and income taxes – promptly. We regularly offer tax saving advice and periodically send you literature regarding the latest tax law changes and how they affect you. If you’re new in business, we can help you decide if you should incorporate and if you should elect S corporation status.

 

IRS and State/Local Representation

Our firm knows the tax laws, and we are knowledgeable of current tax practices. We can provide you complete representation services before the IRS as well as state and local taxing authorities. We are also experienced in negotiating Offers in Compromise with the IRS.

 

Business Valuations

Our firm provides cost-effective business valuation services, quickly and efficiently.

 

Computer Consulting

We can show you how using a computer (and the right software) to perform your daily accounting tasks can save you time. Tasks such as billing your customers on the computer and knowing quickly how much they owe you, writing checks on the computer and knowing your cash balance at any time. If you have some accounting knowlege or the proper staff, we can help you set up the chart of accounts to properly keep track of your general ledger in-house, with us periodically perusing these financial statements but not compiling or auditing them.

 

Retirement Planning

It is never too early to start planning for retirement. If you want to live the same lifestyle–or an even better one–than you do now, you need to start planning for retirement…NOW. We can analyze your projected income and expenses and suggest investment funding techniques to help you make sure that your golden years 10, 20, and even 50 years from now live up to your expectations. We can even help you decide on the specific investments to make.

 

Pension & Profit Sharing Plans

We can help you decide which retirement plan is best for you, and then we will help you fill out all the paperwork necessary to implement it. For example, if you own a small business, we can show you how the new SIMPLE Retirement Plan can save you three to six times more money than an IRA, and how it’s cheaper to maintain and easier to understand than a 401K and other retirement plans.

 

Investment Review

Our firm will perform a custom portfolio analysis and review the risks and returns of specific investments including stocks, bonds, REITs, and limited partnerships. We will also determine an optimal asset allocation for you by taking your unique personal and financial goals and resources into account.

 

Payroll Services

Our firm offers complete payroll preparation and payroll tax reporting services. We prepare all federal and state returns and offer full magnetic media and electronic filing capabilities.

 

Debt & Financial Services

We offer complete debt and financial counseling services, including installment debt consolidation, refinancing, and repackaging.

 

Benefit Plan Services

Our firm can help your firm weigh the complex benefits and costs posed by todays qualified and nonqualified pension and profit sharing plans, including 401(k), SEP, SEP IRA, Keogh, life insurance and health insurance plans.

Overview of Bookkeeping Services

Provide your business with detailed bookkeeping services, including Accounts Payable, Accounts Receivable, and Payroll processing to help you record and manage your daily business transactions. Our services include check writing, bill paying, customer invoicing, receiving and recording deposits, receivables and payables tracking and analysis, bank statement and credit card reconciliation, depreciation, sales and inventory tracking, paying your employees and subcontractors, and making tax deposits. We can customize our services to meet the needs of your business, whether you need assistance in one or two of these areas, or need a full range of bookkeeping services provided in order to allow you to concentrate on other aspects of managing your business.

 

Payroll Services
Our firm offers complete payroll processing and payroll tax reporting services. We prepare all federal and state returns and offer electronic filing capabilities. We offer you and your employees many personalized options such as Direct Deposit, with the capability to deposit into multiple accounts. We do what ADP and Paychex do, but with a personal touch. For more information, see our separate Payroll Services page, or contact us.

 

Pension & Profit Sharing Plans
If you own a small business, we can show you how the SIMPLE Retirement Plan can save you three to six times more money than an IRA, and how it’s cheaper to maintain and easier to understand than a 401K and other retirement plans. We can help you decide which retirement plan is best for you.

 

Accounting Services
We provide you with a monthly or quarterly income statement and balance sheet that compile your financial transactions for the period. These financial statements are custom designed for your type of business. They may include reports that give you comparisons of actual results with budgeted, or current year results with prior year results. Other financial statements we provide include a general ledger, payroll journal and bank reconciliation. We will show you how to use these “tools” to run your business successfully.

 

Compilation and Review Services
Our firm provides professional compilation and review services to businesses of all sizes. We prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP) or other basis of accounting for use by banks, investors, and other third parties.

 

Tax Services
We prepare all of your tax returns – payroll taxes, sales taxes, and annual corporate income taxes – promptly. We regularly offer tax saving advice and periodically send you literature regarding the latest tax law changes and how they affect you.

 

IRS and State/Local Representation
Our firm knows the tax laws, and we are knowledgeable of current tax practices. We can provide you complete representation services before the IRS as well as state and local taxing authorities. We are also experienced in negotiating Offers in Compromise with the IRS.

 

Financial Forecasts and Projections
We can work with you each year to develop a monthly budget for the upcoming year. Coupled with the financial statements we give you, these reports will be the tools that tell you how your business is doing versus what you planned.

 

Business Consulting, Incorporation, and Valuations
If you’re new in business, we can help you decide if you should incorporate and if you should elect S corporation status. If you would benefit from incorporating, we can facilitate the process and help you accomplish that for your business. Our firm also provides cost-effective business valuation services, quickly and efficiently.

 

Tax Services
We prepare all your taxes – payroll, sales, and income taxes – promptly. We regularly offer tax saving advice and periodically send you literature regarding the latest tax law changes and how they affect you. If you’re new in business, we can help you decide if you should incorporate and if you should elect S corporation status.

 

Computer Consulting
We can show you how using a computer (and the right software) to perform your daily accounting tasks can save you time and money, whether you are a beginner or a more advanced user. We can teach you how to perform tasks like billing your customers on the computer so you’ll always be able to quickly know how much they owe you or how much they’ve paid you, or writing checks using the computer to track your expenses and know your correct cash balance at any time. We can incorporate these records into the accounting work we can do for you, or if you have some accounting knowledge or the proper staff, we can help you set up your chart of accounts to properly keep track of your daily transactions in-house, with us periodically reviewing your general ledger and financial statements for you, but not compiling or auditing them. Our consultants are available to assist you in choosing which version of the program is best suited to your needs before you make a purchase, and we can then also help you with installation, proper setup, one-on-one or group training, and file maintenance and review.

Is CPA Software a Good Choice?

Choosing to become a CPA is an investment in your future; obtaining the necessary certification nearly guarantees financial wellbeing regardless of the way you choose to apply it. So, when it comes to CPA software, does the same idea apply? In our opinion, CPA software is an excellent investment. Whether you work for a firm or independently, finding the perfect software tool can help you maintain control over client data, complete and file tax and wage reports, and keep pace with the world of accounting.

 

New data management software
The technology of bookkeeping tools is consistently changing, and accountants are getting in on the progress. Software is now available to streamline nearly all responsibilities accountants have in a variety of positions. However, the type of software you choose to utilize depends on your specific function as a CPA. Do you take on individual client tax reporting, or are you employed in-house at a business? Though these functions are similar, the ways in which you deploy accounting knowledge are inherently different. To help you out, we’ve figured out the best software for each scenario.

 

Payroll accounting software
If you work as an accountant for a specific business, your work is tied, necessarily, to payroll. As a result, we recommend purchasing a software compatible with typical payroll functions—everything from processing to withholding tax recording. In choosing a software with this function, you gain access to the data necessary for monthly, quarterly, and end-of-year reporting. The software need not only apply to payroll. In fact, it should have a form filing feature. To get the most out of your product, we suggest purchasing a semi-automated and modular software, which will allow you to choose the functions you need most.

 

Cloud-based software
If you work on individual clients, your software should look slightly different. You will not need a payroll background or foundation but will instead need to collect data and complete relevant forms. If this most closely describes your experience, look for cloud-based form filing software. Data hosting should be your top priority—taking on clients means collecting and storing data, potentially for years. In selecting a cloud-based storage system, you ensure the data is available regardless of your location. Then, filing the necessary forms becomes significantly easier.

Firing a Client: What They Didn’t Ask You on the CPA Exam

Though letting clients go is not specific to CPA professions, it occurs more in this industry than in any other. Learning to cut ties with clients is a difficult task, but—when done correctly—you can save your name and maintain some semblance of a professional relationship. “Firing” a client can happen for several reasons; they may consistently make late payments, or they may not be able to pay off their invoices at all. Perhaps other parts of your business are suffering because a client takes up too much time, or maybe your client is rude, complaining about your prices and threatening to take business elsewhere. All of the above scenarios can result in letting a customer go. Here’s how to do it gracefully.

 

If your client needs too much handholding, consider bringing in a trusted employee. These clients require too much hands-on support. Before firing the client, try bringing on another employee to help with their business. The client may get more comfortable with this new CPA, and you may eventually be able to transfer their business to this new employee. If the client insists on working with you, be frank about your professional needs. If your business is growing, you’ll have a difficult time providing a client with the personal attention they deserve. Try suggesting other accountants you know have the time and bandwidth to handle these types of accounts.

 

If your client doesn’t pay, keep documents and be frank. If your client has difficulty paying your fees, talk honestly with them about their financial situation, suggesting ways they can get back on track. If your client agrees to pay in advance, set up a monthly retainer, or try creating a payment plan that works for both of you. If, however, the client avoids calls and ignores other forms of communication, let them know immediately that your professional relationship is terminated. Be sure to include specific reasoning. Then, save all correspondence from the relationship—if you are owed money, you will need proof that payment is warranted.

 

If your prices have grown out of what they can afford, provide plenty of notice and suggest alternatives. CPA businesses can grow fast, and you may feel comfortable raising your prices. If you choose to do this, provide clients with plenty of notice. You may be able to negotiate fewer services for the same price. The client may also leave on their own. It is always a nice gesture to recommend other, more affordable accountants to soften the blow.

 

Expanding CPA Jobs Beyond Tax Preparation

CPAs enter the workforce with a variety of essential skills. However, most CPAs get into the business to focus on tasks like tax advisement and funds management. Though these services are absolutely essential, becoming a CPA doesn’t necessarily mean an individual has to take these jobs. In fact, CPA skills are highly marketable in dozens of other fields. If you’re looking for a change of pace or a creative way to apply the skills gained in your certification, see below for a few strategies and suggestions.

 

Property development

When working on new or existing property, developers and investors need accountants to “run the numbers” on how profitable a type of building might be once completed. “Running the numbers,” as it turns out, can be a full-time job. Earning a position as a type of assessor for a development company or city government is an excellent way to apply your skills in a unique setting. CPAs have tools to assess profitability of retail, residential, and general commercial spaces. Put those skills to the test.

 

Government accountants/auditors

Accountants are utilized by federal, state, and local government for a variety of reasons. They’ll audit businesses and individuals and keep tabs on government agency spending. Federal government accountants may work for the IRS, or they may be responsible for auditing branches of government organizations to ensure that financial objectives are met.

 

Forensic accounting

A combination of CPA and criminal investigator, this type of service or position puts CPAs to work uncovering financial fraud. Companies lose billions each year to fraud, making this an incredibly fast-growing sector. This type of position is often offered within large companies or as part of government law enforcement agencies.

 

While the above jobs may not be what you have in mind as a CPA, it helps to cast a wide net when looking for positions. If you already work at an established accounting firm, consider expanding your services to include these types of offerings. You’ll draw in new business, add marketability to yourself and your company, and earn a profit.

 

5 Traits that Make an Accountant Indispensable

Every CPA is instilled with a set of skills when they earn their title. Certain traits, however, must be intuited, learned on the job, or part of a professional’s personality. These qualities are what separate good accountants from indispensable accountants; rather than viewing your CPA as a person who provides a service, you should see them as a person with whom you have an essential relationship. Below, we have isolated five traits that mark a great accountant.

 

Creativity

A great CPA needs to be creative. No, this doesn’t need he or she should have an artistic hobby. It means your accountant should have the capacity to think outside the box. A creative mind can see and present a situation in a new and interesting way, generating unique solutions to even the toughest of accounting problems. Most client problems aren’t textbook cases, and they require special attention, personalization, and a lot of creativity.

 

Commitment to the industry

An accountant should be passionate about doing the math and helping clients. For a CPA to be truly indispensable, they need to be passionate about their career and the service they provide; it should not just be a way to make money. This is essential for the level and quality of work output and for employment turnover. If a person loves what they do, they’re likely to stick around for a while.

 

Trustworthiness

CPAs handle a lot of sensitive material; some joke that they know their clients better than most family members. Most forms and figures that pass through an accountant’s hands are confidential, and CPAs must be vigilant in their commitment to privacy. This should extend beyond the workplace; if an accountant spends their free time gossiping about co-workers and clients, they’re likely not a good fit for a position.

 

Interest in technology and development

Accounting work hasn’t changed much, but the ways accountants work shift with every round of software releases. According to Daniel Hood, the Editor-in-Chief of Accounting Today, an invaluable CPA should have an interest in and willingness to experiment with new and developing technology. Flexibility and the ability to adapt and learn on the job are essential for good accounting.

 

Focus on personal and partner development

Michael Platt, Principal of the Platt Group, has said that pushing for firm, partner, and personal development is one of the most essential characteristics for a CPA. This might mean earning a concomitant degree, or perhaps taking on certain projects just for the experience. This might mean providing guidance to younger or lower-level CPAs in a firm, or perhaps providing constructive suggestions in meetings. Whatever the case, your CPA should not be content with quality of work; they should always strive to do better.

 

 

Qualities to Look for Before Hiring a CPA

With over 650,000 actively licensed CPAs in the United States, you shouldn’t have a problem, you shouldn’t have a problem finding an individual to fill a position or fill a personal accounting need. However, certain traits allow CPAs to stand apart from the crowd. While interviewing and reviewing applications, keep the following qualities in mind. These characteristics make for a competent and efficient CPA.

 

Attention to detail

Accounting work can be a tricky business. All calculations need to be exact; every figure needs to be accurate. A good CPA will have a strategy for keeping track of details—whether that means reviewing forms two to three times before submitting or keeping diligent notes during work and meetings.

 

Excellent organization

This trait is important for every industry worker, but it is especially essential for CPAs. Accountants often juggle dozens of clients at a time, and those clients often require different services and support. A CPA needs to maintain an organizational system in order to keep up with figures, data, and paperwork they accumulate on the job. Great organization leads to maximum productivity.

 

Communication

This is one of the most important skills for any client-facing professional. A good CPA should be able to clearly and articulately explain their process and figures to clients, peers, and higher-ups. If there is any confusion about a specific task, they should feel comfortable in asking for clarification and direction. Communication goes hand-in-hand with trustworthiness and accuracy, all of which are essential in a good accountant.

 

Time management

This skill is in line with attention to detail and communication, but it merits its own mention. Time-management is imperative to efficient accounting work. If you’re trying to find a good CPA, ask about their time management strategies; if nothing comes to mind, they likely haven’t developed an efficiency system. If they already have a tried and true strategy for tackling several problems at once, they know how to prioritize needs and skills.

 

Well-rounded

You want a CPA who has broad financial experience, whether that means financial planning, tax law, or auditing history. Though accountants often specialize in a specific service, finding a professional with a range of experience and interests guarantees their ability to work beyond their professional niche when necessary. They can also provide invaluable insight and problem-solving skills in tough situations.