Tax Services

S-Corp election typically becomes beneficial when your business profit exceeds $60K-80K annually, as it can reduce self-employment taxes on distributions above reasonable salary requirements. However, timing is crucial – you must make the election by March 15th (or within 75 days of formation) for current-year treatment. We analyze your projected income, cash flow needs, and state tax implications to determine optimal timing. The election requires maintaining payroll, corporate formalities, and careful documentation of salary vs. distribution allocations.

Strategic tax planning involves balancing current tax savings with future exit value. We often recommend qualified small business stock (QSBS) structures that can provide up to $10 million in federal tax-free gains upon sale. Additionally, proper expense timing, R&D credit utilization, and state tax nexus planning can reduce current liability while maintaining attractive financial statements for investors. Entity structure decisions made early can save hundreds of thousands in taxes at exit.

Legitimate business expenses must be ordinary, necessary, and directly related to your business operations. Common deductions include office rent, equipment, professional services, travel, and meals (50% limitation). Red flags include excessive travel/entertainment, personal use of business assets, or disproportionate expenses relative to income. We maintain detailed documentation requirements and provide quarterly expense reviews to ensure compliance while maximizing legitimate deductions.

High earners benefit from sophisticated strategies including backdoor Roth conversions, mega backdoor Roth contributions, tax-loss harvesting, and charitable remainder trusts. We often implement defined benefit pension plans for business owners, which can allow contributions exceeding $200K annually. Additionally, strategic timing of stock option exercises, installment sales for large transactions, and geographic tax planning (considering state residency) can generate substantial savings for high-income individuals.

Multi-state taxation requires careful planning to avoid double taxation while ensuring compliance in all jurisdictions. We analyze state residency requirements (183-day rules, domicile factors), income sourcing rules, and available tax credits. For high earners considering relocation, timing the move around income recognition events and establishing clear residency documentation can save tens of thousands annually. Some clients benefit from establishing residency in tax-friendly states like Texas, Florida, or Nevada before significant income events.

Recent legislation has created both challenges and opportunities across all client types. The gradual phase-out of bonus depreciation affects equipment purchasing decisions, while R&D capitalization requirements impact tech companies and startups. High earners face continued SALT deduction limitations but may benefit from expanded clean energy credits. Small business owners should evaluate Section 199A deduction optimization before potential changes in 2026. We stay current on all legislative developments and proactively adjust client strategies to maximize benefits under evolving tax laws

Residential rental properties depreciate over 27.5 years using straight-line method, creating annual deductions that reduce taxable income. However, depreciation is “recaptured” upon sale at a maximum 25% federal rate, plus ordinary income rates on any excess. Strategic planning includes cost segregation studies to accelerate depreciation on components like flooring and fixtures, and 1031 exchanges to defer all taxes when reinvesting proceeds into similar properties.

Section 1031 exchanges allow real estate investors to defer capital gains and depreciation recapture taxes by reinvesting sale proceeds into “like-kind” properties within specific timeframes. You have 45 days to identify replacement properties and 180 days to close. There’s no limit on how many times you can execute exchanges, allowing unlimited wealth building with deferred taxation until eventual sale. We coordinate with qualified intermediaries and ensure compliance with strict timing and identification requirements.

Section 1031 exchanges allow real estate investors to defer capital gains and depreciation recapture taxes by reinvesting sale proceeds into “like-kind” properties within specific timeframes. You have 45 days to identify replacement properties and 180 days to close. There’s no limit on how many times you can execute exchanges, allowing unlimited wealth building with deferred taxation until eventual sale. We coordinate with qualified intermediaries and ensure compliance with strict timing and identification requirements.

Cryptocurrency is treated as property for tax purposes. Short-term gains (held less than one year) are taxed as ordinary income at rates up to 37%, while long-term gains benefit from preferential capital gains rates (0%, 15%, or 20% depending on income). Every transaction – trading, selling, using crypto for purchases – creates a taxable event. Strategic planning includes tax-loss harvesting, holding periods optimization, and timing transactions across tax years to manage rate brackets.

Crypto trader status requires substantial, regular, and continuous trading activity with intent to profit from short-term price movements rather than long-term investment. Benefits include ordinary loss treatment (not limited to $3K annually), mark-to-market accounting elections, and business expense deductions for trading-related costs. However, gains are taxed as ordinary income rather than capital gains rates. We analyze your trading frequency, volume, and time commitment to determine qualification and optimal tax treatment.

DeFi activities create complex tax implications often requiring specialized expertise. Staking rewards are generally taxable as ordinary income when received, establishing basis for future sales. Yield farming and liquidity provision may trigger taxable events upon deposit, and impermanent loss calculations affect gain/loss recognition. We track protocol-specific mechanics, automate transaction reporting, and ensure compliance with evolving IRS guidance while optimizing tax efficiency for DeFi strategies.