Tax Planning & Consulting

Tax Planning

Tax planning typically takes two forms:

I. Project your year-end tax liability based on expected annual income and deductions or on “what if” scenarios for income and deductions. Using this information, we can advise you how to adjust, if necessary, your estimated income tax payments or your wage withholdings.

II. Advise you about the taxability or deductibility of transactions you may be considering but have not yet completed. For example, the purchase or sale of investments, a home, a business, or tangible property has tax implications. We can advise you about the taxability of these matters so you can make informed decisions.

Tax planning is important to all individuals and organizations. Since tax planning is most beneficial during the year, a great time to consider planning for the current year is when you are having your annual tax return completed, while related issues may still be fresh in your mind.

Multi-State Taxation

We can assist you in analyzing the state and local tax (SALT) exposure you have based on the activities you are performing in a state. We can assist in proactively planning for SALT taxes, including deductions and credits that are available to you to help minimize your tax liability.

Cost Segregation Studies

Cost segregation studies are a valuable tool when purchasing real estate and can help identify immediate tax savings for the purchaser. Generally, real property is depreciated over 39 years for commercial property and 27.5 years for residential. As part of a cost segregation study, we will identify separate components of the building that qualify for accelerated depreciation lives, including those that may qualify for full bonus depreciation. This can significantly increase available tax deductions in the year of purchase.

Business Valuations

We can assist you with a business valuation to establish the value of a partial or entire interest in a closely held business or professional practice. Factors taken into account include quantitative and qualitative measures, as well as tangible and intangible factors related to the business being valued.

Who needs valuation services?

• Individuals who want to start or purchase a business
• Retirement-minded business owners who are considering gifts to their children
• Business partners where the relationship has deteriorated
• Various other businesses

Reasons for valuations:

• Gift and estate taxes
• Buy/sell agreements
• Mergers and acquisitions
• Litigation support
• Estate planning
• ESOPs
• Dissenting shareholder actions
• Partner disputes
• Divorces

IRS and State Agency Notice/Audit Representation

An IRS examination may be a desk review (when the agent requests additional information or documentation) or a field review (when the agent examines significantly more information). An examination starts with a written IRS request. Our service can include helping you assemble any needed information, acting as your representative before the IRS agent, researching technical issues, responding to IRS inquiries, and advising you about pertinent matters that may arise during the examination.

M&A and Succession Planning

Whether selling or purchasing a business, detailed information is required. We can assist in the due diligence process. The extent of our service can be tailored to your needs and can range from valuation assistance and assessment of underlying records to a determination of tax consequences.

Succession planning is the process of identifying and developing a strategy for transitioning your business to the next generation, key employees, or a third party. This may include preparing family members or key employees for new roles through mentoring, training, and job rotation. It also generally includes assistance with transaction planning and deal structure to accomplish goals of tax minimization, wealth transfer, and business continuity. Effective succession planning can take several years to develop and implement. It is important to include your business advisors in the process so they can help you effectively meet your goals.

The development of a plan to gradually transfer management of a business from a retiring owner (usually a parent) to others (often children) can be complicated. A well-organized plan can help the transition go smoothly and anticipate areas of potential difficulty.

Other Tax Planning & Consulting Services

We can provide a variety of other individual tax planning and consulting services, including:

Charitable Giving Strategies

We can look for opportunities to maximize deductions for large charitable gifts. This can include reviewing the timing of gifts and also considering long-term strategies, including donor-advised funds, private foundations, and other charitable trusts.

Retirement Planning

We can help review the tax impact of Required Minimum Distributions (RMDs). We can also review other tax planning strategies, including taking taxable Roth Conversions in years with lower taxable income to take advantage of lower tax brackets

Timing of Income

We can assist with other strategies to manage income to best utilize the current individual tax bracket. This can include a multi-year projection of income.

State of Residency

We can help review the tax implications of a change in residency. We can also advise on practical considerations and requirements for changing state or residency.

Investing in or Purchasing Tax Credits

Whether purchasing the credits directly or investing in a pass-through entity, we can review the tax impact and other practical considerations when investing in these credits. This includes consideration of passive or non-passive investments.

Investment in Pass-Through Entities

We can review the current year tax impact and planning strategies related to investments in pass-through entities. This includes the impact of passive and non-passive investments.

Investment in Rental Real Estate

We can review the tax impact of investments in rental real estate, including the impact of passive loss limitations. We can also review the tax impact and requirements for making the qualified real estate professional election.

Converting a Principal Residence to a Rental

We can review tax planning strategies related to converting a residence into a rental property. This includes building out a fixed asset schedule for the rental property and other components.

Choice of Entity

For new businesses, we can review the tax consequences and other practical considerations for electing to be taxed as a partnership, S-Corporation, C-Corporation, or Sole Proprietorship

Fixed Asset Review

We can review current fixed asset schedules for accuracy and for any additional tax-saving opportunities

Investing in or Purchasing Tax Credits

Whether purchasing the credits directly or investing in a pass-through entity, we can review the tax impact and other practical considerations when investing in these credits.

Partnership 754 Elections

For entities taxed as a partnership that are going through an ownership change, including interests transferred by sale or inheritance, we can review the tax impact and practical considerations in making a 754 election. For some partnerships, making a 754 election can provide immediate and long-term tax savings for any new partners.