Category: Tax Planning
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Sample tax representation agreement
This page is outdated. A more recent version is available: Sample accounting services engagement agreement 2021 IF AFTER READING THIS YOU AGREE TO ALL THE TERMS, PLEASE RESPOND TO THIS EMAIL AND TYPE “AGREED“. PLEASE CALL WITH ANY QUESTIONS. SUMMARY OF THIS EMAIL Documents included: 1) Privacy policy, 2) Confidentiality Privilege Agreement, 3) Engagement Agreement,…
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Don’t replace common sense with technology
Tax filing is like grocery shopping Technology has transformed the annual tax filing ritual but far too many people are replacing good judgement with purely online mechanical tools. The result is a recent spike in errors leading to costly tax penalties and higher tax payments over the long-term. The most important part of the tax…
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Sample deferred compensation plan
Following is an annotated copy of the model truck language for a deferred compensation plan under Rev. Proc. 92-64. TRUST UNDER ____ PLAN OPTIONAL (a) THIS AGREEMENT MADE THIS ___ DAY OF ___, BY AND BETWEEN ____ (COMPANY) AND ____ (TRUSTEE); OPTIONAL (b) WHEREAS, COMPANY HAS ADOPTED THE NONQUALIFIED DEFERRED COMPENSATION PLAN(S) AS LISTED IN…
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What the heck is a 501(k) plan?
The financial services industry has a long history of creating new marketing terms to help sell its products. Certainly this is a productive and useful part of consumer financial service communications. The latest term gathering attention is a “501(k) plan”. The increased use of this term coincides with marketing of an already existing alternate tool…
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When should we file ‘Married Filing Separately’?
Only about 1 in 50 taxpayers chooses to file tax returns as “Married Filing Separately” so it has not been a popular option. For most married couples this would raise the total amount of tax due. There are exceptions. Those who do file separately typically save money doing so, and that’s why these choose it.…
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Questionnaire to determine the potential to save taxes
My business adviser, a data scientist, asked me to compile a list of questions necessary to determine the tax saving potential of an individual person. The intent is to keep the list as short as possible but allow us to calculate an estimate of the amount of tax savings that are possible through comprehensive financial…
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Four steps to cut income taxes
A successful tax reduction plan typically involves the same four steps for every person who tackles this aspect of financial planning. The rewards for taking on the financial goal of ending or reducing income taxes are substantial; wealth accumulates exponentially faster without the drag of taxes. Yet relatively few incorporate comprehensive tax planning into their…
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“from whatever source derived”
What exactly is tax planning? Internal Revenue code section 61 defines gross income broadly as coming “from whatever source derived”. However, the following code section 62 begins to differentiate the sources eligible for exclusion from taxable income. Volumes of tax authority follow behind this basic law defining these two concepts to further define the distinction…
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Five reasons to not extend your business tax return due date
As a tax planner and an advocate of automated accounting systems, I’ve said many times that preparation of the tax return is the least important and certainly least valuable service that I provide. I’ve used the phrasing, even over the objections of tax preparers, that the business tax return should almost effortlessly “fall out” of…
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Unreimbursed partnership expenses revisited
The Tax Cuts and Jobs Act triggers changes to the tax treatment of unreimbursed partnership expenses for 2018. Partnerships should revisit their policies to ensure that partners and employees maximize tax savings under the new law. Under former law a partner could deduct the expenses of the partnership on his or her individual income tax…