FAQ Q: What does this CPA practice specialize in? A: Taxation, mostly. This includes individual, corporate, partnership, estate and everything in between. We do a large number of individual tax returns each year and a fairly large number of corporations. Most of the corporations we represent are closely-held corporations, meaning that their stock is held by ten shareholders or less. Q: What is your philosophy regarding taxpayer compliance and their dealings with the IRS? A: First of all, there is the matter of compliance. Simply stated, this means for you to file your tax returns on time and to do so with complete records that will stand audit if necessary. Bear in mind that 60% of the issues that constitute "taxpayer non-compliance" are simply lack of documentation. That means that the taxpayer is not doing anything wrong – it simply means that the taxpayer’s records are not good enough, accurate enough or legible enough to back up their position. If you neglect something, it will be resolved to your disadvantage. The best tax idea in the world is a bust if it can’t stand audit. Q: How does the average taxpayer take advantage of available tax breaks? A: Concentrate on the things that make a difference. You will need a roof over your head, so consider home ownership as a means of wealth building and tax advantage. Consider tax-sheltered pension plans or trusts to defer income to future years. Some of these, like 401(k) plans and IRAs, are shake-and-bake plans that can be set up easily and inexpensively. Check these out first to see if they will benefit you. Forget about insignificant gimmickry like the home office deduction. This is a waste of time for both the taxpayer and the CPA. Q: How do you know whether something is a good idea or a bad idea? A: Find out how much tax advantage is possible by the activity, and find out the cost of the activity. Don’t stand on your head to create a tax advantage, because tax savings in and of themselves do not create wealth. If the underlying activity does not make economic sense, it’s a bad deal that cannot be made good by the tax advantage of losing money. Many taxpayers let themselves be led into this type of situation by tax shelter promoters and other hustlers, who convince taxpayers they can improve themselves by throwing their money away. Q: What do you mean by "tax structuring"? A: Planning your business and personal activities to create maximum wealth while minimizing your tax bite through tax reduction, tax deferral, income splitting or any other legal means. It often requires establishing non-typical qualified plans or closely held corporations, partnerships or trusts which are taxed differently. It means pursuing the same kind of income-producing activities, but changing form and structure to something more advantageous, tax-wise. These options don’t just drop out of the sky automatically. They involve more record-keeping, more tax returns and more choices. There is also more expense operating this way, so there must be enough tax savings to overcome the additional cost of doing business that way. Q: What does your Small Business Service consist of? A: This is for the small business that needs accounting support, but does not need a full-time Accountant. It is meant to keep you legal and to position you for the best possible tax structure. A small business has a far different reporting structure than a wage-earning individual. A wage-earning individual's entire record-keeping for a year may consist of a W-2 and a mortgage interest statement. For a small business, every single transaction must be reported. Also, you need to keep a handle on whether or not you are making money. You don’t go to work for an employer and tell him to pay you whatever is left over at the end of the year. You don’t operate your own business that way, either. Q: How much will the Small Business Service cost me? A: It depends upon the business structure, reporting requirements and number of transactions. Fill out the next page with the details of your business and submit it to us at neilthexcpa@yahoo.com [Home][FAQ][Estimate] 3627 East Indian School Road, Suite 209 Phoenix, AZ 85018 Tel: (602) 957-0096 Fax: (602) 381-3130