Some taxpayers hire a tax adviser without experience serving the many unique complexities of individual taxpayers. This is especially true if your accountant comes from a Big 4 background as they most likely specialized in one area of tax or if you hire a seasonal tax preparer who may not have the qualifications of a CPA. This may lead to incorrect tax returns costing you thousands of dollars or even worse - it may cause you to receive audit notices from the IRS and state tax authorities.
Some individuals (such as real estate professionals, expatriate taxpayers working overseas, self-employed, professional service providers - doctors, dentists, lawyers, etc. ) have unique tax rules. I have served all types of individuals since my career my began. I have represented employees, entrepreneurs, real estate professionals, retirees, self-employed and Fortune 500 CEOs.
Keeping up with constantly changing laws that individuals face requires years of expertise dealing with complex tax issues. Experience matters. Richard Pon, CPA is here to help.
Individual Tax Services and Individual Tax Consulting and Personal Financial Planning
We offer tax preparation to individuals including:
Individual income tax return preparation
Nonresident alien income tax return preparation
Expatriate income tax return preparation for U.S. citizens and green card holders working overseas
Sole Proprietorship (including independent contractor) tax return preparation (as part of your Form 1040)
Multi-State and local tax return preparation
Trust income tax return preparation (including charitable remainder trusts)
Form 1099 Independent Contractor preparation and electronic filing.
Besides preparing your tax returns, we offer the following tax planning services:
Choice of business entity planning - Corporation, S-corporation, Partnership, limited liability company (LLC), sole proprietorship
Which is right for your business? In one success story, I advised on a business structure that avoided $10 million in capital gain income.
Cost Segregation studies to maximize depreciation deductions.
A cost segregation may be beneficial when buying a commercial property or making substantial leasehold improvements to your business location. A cost segregation allows a business to depreciate a portion of its property over 5-7 years rather than over 39 years; thereby, increasing your depreciation deductions. A cost segregation can be made several years after you bought the property or constructed your leasehold improvements. Depending on the size of your property, a cost segregation can lead to significant additional deductions. In many cases, I have seen cost segregation studies lead to deductions over $250,000.
20% Pass-through business deduction available to sole proprietors, independent contractors, partners and S-Corporation shareholders
Stock option and equity compensation planning (NQ, ISO, ESPP, RSU, RS - I know the ABC song as well)
Sales of Start-up stock: In one success story, I helped a company’s founder eliminate $10 million in capital gain income.
Qualified Opportunity Zone capital gains planning. Opportunity awaits you through 2026.
Real estate tax planning
1031 “like-kind” exchange planning for real estate sales
Passive income tax planning
Employee benefits tax planning
Multi-state tax planning for those who work in multiple states or reside in multiple states
Quarterly estimated income tax planning
Charitable giving tax planning
Gift tax planning
Tax planning for sales of collectibles
Besides tax preparation and tax planning, we offer the following individual consulting services:
Personal Financial Planning
Education Planning
Retirement Planning
Budgeting
Employee Benefits consulting (know what benefits you may negotiate for)
Small business management consulting
Individual Tax and Personal Finance Traps
Having served many individual clients in a myriad of professions, here are several issues that individuals may not be aware of:
Many landlords are aware that their rental real estate may produce tax losses due to depreciation. However, many are not aware that their may be no immediate tax benefit due to the “passive loss” rules.
Many employees with significant stock option exercises fail to plan for additional regular tax and alternative minimum tax implications of their stock option exercises. Withholding tax on exercise of employee stock options generally means your employer sold some shares. Employees should document their basis in the shares sold and watch out for a balance due with their tax return as withholding may not cover your actual tax liability.
U.S. and California residents are taxed on worldwide. Income earned outside the U.S. is fully taxable to U.S. and California residents.
Working as an independent contractor (including most gig economy workers) means you are self-employed. This means you are responsible for both the employer and employee portion of Social Security and Medicare tax. The 15.3% self-employment tax can be news to many taxpayers. on top of that, self-employed individuals are now subject to paying estimated taxes as there generally is no tax withholding on independent contractors.
Having a foreign bank or financial account may subject you to U.S. Treasury Foreign Bank Account Report (FBAR) and IRS reporting of your foreign assets. Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation—and each year you didn't file is a separate violation.
Employees who frequently travel on business may be subject to multi-state income taxation.
Employees living outside New York telecommuting for an employer located in New York may be subject to New York tax.
California partnership withholding rules differs on whether the partner is domestic (i.e. outside of California) or foreign (i.e. outside the United States). Therefore, your partnership withholding tax may not be sufficient to cover your California tax liabilities.
Many individuals are under-insured for their home and rental properties as they may have a set dollar limit instead of “replacement” value to protect their property from casualties such as fires or floods.
Many individuals with short-term disability insurance may not receive benefits since insurers will deem them to work in some capacity. To protect yourself, your short-term disability insurance should cover your “own occupation.”
