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Services

Donald D. Wilson Jr., CPA, P.A. provides a wide range of services to individuals and businesses in a variety of industries. We strive to meet each client's specific needs in planning for the future and achieving their goals in an ever-changing financial and regulatory environment.

Our professional services include:


Accounting Services

We view our role in the financial reporting process as an opportunity to provide our clients with accurate financial information that is comparable to others in the same industry and to recommend constructive solutions for maximizing your profitability and efficiency. Our financial statement services go beyond checking your math. As your advisors, we become familiar with your business and the account principles and practices common to your industry, so that we can provide you with valuable information you can use in your daily management decisions. Our professional staff looks for significant trends and opportunities for profit improvements such as more efficient operations, strong financial structure and improved accounting and administrative controls.

Since accounting needs vary from business to business, we offer different levels of financial statement services, each with its own degree of assurance.

COMPILATION SERVICES

Depending on your needs, we will compile your financial statements on a monthly, quarterly or annual basis. Compilation involves preparing financial statements based on information provided by a company's management, and will often involve some adjustment to the accounting records. Sufficient for many small, private companies, a compilation provides no assurance that the materials submitted by the company are valid or were prepared in conformity with Generally Accepted Accounting Principles (GAAP). However, it does provide management with a set of trained eyes looking at your company's financial statements.

REVIEW SERVICES

Reviews are often needed for companies that must report their financial results to third parties such as creditors, regulatory agencies, or business owners who are not actively involved in the management of the company. During a review, we make inquiries concerning financial statement-related matters, interviewing company management and personnel as needed. We use analytical procedures designed to identify unusual items or trends in the financial statements that may require further analysis. A review provides limited assurance that material changes to the financial statements are not necessary.

AGREED-UPON PROCEDURES

An agreed-upon procedures engagement is designed to provide management and outside parties with insights into specific financial statement elements, without looking at all of the elements. Many of our clients have had us perform agreed-upon procedures to provide credibility to information they have presented to a third party, often a bank, regulatory agency, prospective investor or prospective purchaser. At the onset of an agreed-upon procedures engagement, we agree to the procedures all parties believe are appropriate to meet their needs. We then perform the agreed-upon procedures and issue a report of our findings.

Business Consulting and Planning Services

A key element of our firm is helping business owners with tasks such as selection of the proper business entity to operate their business, and formulating workable small business accounting systems. For a small number of businesses, We can even, in very special circumstances, function as the chief financial officer on a part-time basis. (Note: Such an engagement requires a two-day-a-month written retainer--time that must be in addition to any tax planning and preparation work performed.) If you need these types of general business consulting services, please call us. The following related topics outlines various factors to consider in the selection of the proper business entity, and which software best suites your needs.

Estate Planning

If you want to know exactly what will happen with your assets and possessions when your gone, and want know that your family will be taken care of, ask yourself the following questions before you develop an estate plan.

Planning does pay off!

  1. Who will provide for my surviving spouse and children?
  2. What will happen to the family business?
  3. Who will pay for my children's college education?
  4. How high will the taxes be on my estate?
  5. Who will pay for my burial expenses, estate settlement, taxes and other debts?
  6. Will my heirs be treated fairly in the distribution of my assets?
  7. Do I want to make gifts to my heirs during my lifetime?
  8. Do I want to provide for a favorite charity or other organization?
  9. Will my assets fall into the hands of undeserving heirs?
  10. Are there estate-planning strategies I can use to reduce my estate taxes?

The purpose of estate planning is to distribute your assets according to your wishes after your death. Successful estate planning transfers your assets to your beneficiaries quickly and with minimal tax consequences. The process of estate planning includes inventorying your assets and making a will or establishing a trust, with an emphasis on minimizing taxes. This pamphlet provides only a general overview of estate planning. You should consult an attorney, CPA or tax advisor for additional guidance.

Do I Need to Worry?

You may think estate planning is only for the wealthy. Actually, if you have assets worth more than $1,000,000 estate planning may benefit your heirs. That's because generally taxable estates worth in excess of $1,000,000 may be subject to federal taxes, which can be as high as 55% of the taxable estate.

Adding up your own assets can be an eye-opening experience. By the time you account for your home, investments, retirement savings and life insurance policies, you may find yourself in the over-$1,000,000 category.

Even in estates of less than $1,000,000 estate planning may be necessary to be sure your intentions for disposition of your assets are carried out.

Taking Stock

The first step in estate planning is to inventory everything you have and assign a value to each asset. Here's a list to get you started. You may need to delete some categories or add others.

  • Residence
  • Other real estate
  • Savings (bank accounts, CDs, money markets)
  • Investments (stocks, bonds, mutual funds)
  • 401(k), IRA, pension and other retirement accounts
  • Life insurance policies and annuities
  • Ownership interest in a business
  • Motor vehicles (cars, boats, planes)
  • Jewelry
  • Collectibles
  • Other personal property

Once you know the value of your estate, you're ready to do some planning. Keep in mind that estate planning is not a one-time job. There are a number of changes that may call for a review of your plan. Take a fresh look at your estate plan if:

  • The value of your assets changes significantly.
  • You divorce or remarry.
  • You have a child.
  • You move to a different state.
  • The executor of your will or the administrator of your trust dies or becomes incapacitated, or your relationship with that person changes significantly.
  • One of your heirs dies or has a permanent change in health.
  • The laws affecting your estate change.
  • How Estates Are Taxed

Federal gift and estate tax laws permits each taxpayer to transfer a certain amount of assets free from tax during his or her lifetime or at death. (In addtion, as discussed in the next section, certain gifts valued at $11,000 or less can be made that are not counted against this amount.)

The amount of money that can be shielded from federal estate or gift taxes is determined by the federal unified tax credit. The credit can be used during your lifetime when you make certain gifts, and the balance, if any, can be used by your estate after your death.

Keep in mind that while you can plan to minimize taxes, your estate may still have to pay some federal estate taxes. What's more, your estate may be subject to state estate or inheritance taxes, which are beyond the scope of this brochure. An estate planning professional can provide more information regarding state taxes.

Minimizing Estate Taxation

There are a number of estate planning methods that can be used to minimize federal taxes on your estate.

Giving assets during your lifetime. Federal tax law generally allows each individual to give up to $11,000 per year to anyone without paying gift taxes, subject to certain restrictions. That means you can transfer some of your wealth to your beneficiaries during your lifetime to reduce your taxable estate. For example, you could give $11,000 a year to each of your children, and your spouse could do likewise (for a total of $22,000 per year). You may make $11,000 annual gifts to as many people as you wish. You may also give your children or any other beneficiary more than $11,000 a year without incurring a gift tax, but the excess amount will count against your unified credit. For example, if you gave your favorite niece $33,000 a year for the last three years, you would reduce your unified credit by $66,000 (a $22,000 excess gift each year). Upon your death, youir unified credit of $540,000 remaining to shield your assets.

The marital deduction shields taxable property by shifting it to the surviving spouse. Federal tax law generally permits you to transfer assets to your spouse without incurring gift or estate taxes, regardless of the amount. This benefit is not, however, without its drawbacks. Marital deductions may increase the total combined federal estate tax liability of the spouses upon the death of the surviving spouse. When the surviving spouse dies, the beneficiaries must pay taxes on the combined estates. To avoid this problem, many couples choose to establish a bypass trust.

Bypass trusts or credit shelter trusts give a couple the advantages of the marital deduction while utilizing the unified credit to its fullest. Let's say, for example, that a married couple has a federal taxable estate worth $1.2 million (or $600,000 each). Using the marital deduction, the first spouse to die can leave the other the full amount without incurring taxes. However, when the second spouse dies and passes the full $1.2 million taxable estate on to their children, taxes will be levied on the excess over the $600,000 unified credit.

With a bypass or credit shelter trust, the first spouse to die leaves $600,000 in trust for the surviving spouse. Generally, the trust provides income to the surviving spouse for life, then upon the death of the surviving spouse the assets are distributed to the beneficiaries. This permits the spouse who dies first to utilize his or her $600,000 credit. If the trust document is drawn properly, the assets in the trust are not included in the surviving spouse's estate. Thus, the surviving spouse can transfer the remaining $600,000 of his or her estate tax free. Because both partners have made use of their unified credit, the couple is able to pass on a total of $1.2 million tax free to their beneficiaries. A bypass or credit shelter trust cannot eliminate taxation of an estate worth more than $1.2 million.

Charitable deductions are not taxed as long as the gift is made to an organization that operates for religious, charitable or educational purposes. Check to see if the organization you want to leave money to is an eligible charity in the eyes of the Internal Revenue Service.

Life insurance trusts can be designed to keep the proceeds of a life insurance policy out of your estate and give your estate the liquidity it needs. Generally, you can fund a life insurance trust either by transferring an existing life insurance policy or by having the trust purchase a new policy. Such trusts must be irrevocable-meaning that you cannot dissolve the trust if you change your mind later. With proper planning, proceeds from a life insurance trust may pass to your beneficiaries without income or estate taxes. This gives them the cash needed to pay for estate taxes or other expenses, such as debts or funeral costs.

Estate planning is very complex and is subject to changing laws. This brochure by no means covers all estate planning methods. Be sure to seek professional advice from a qualified attorney, CPA or estate planner. The money you spend now to plan your estate may mean more money for your beneficiaries in the long run.

Financial Planning

As you begin gathering the necessary data for us to prepare your tax returns, We have a suggestion. This year, why not go one step further and also get together a few additional items that will allow me to help you establish a financial game plan.

We have the expertise to provide you with a complete financial plan for the next 12 months. Our action plan will give you personally coordinated ideas to:

  • Clearly focus on where you are now, from a financial viewpoint.
  • Suggest ideas to reduce income taxes.
  • Suggest improvements on implementing a retirement plan.
  • Plan that is geared specifically to your needs.

In order to get started you need the following:

  • Your most recent financial statement (if available) or a current listing of your assets and debts.
  • All life and disability insurance policies (or a list of coverage amounts).
  • Current statements showing you retirement fund balances and any pension benefits.

Tax Preparation Services

Looking for tax preparation and planning? We prepare both federal and state tax returns for C and S-corporations (Scorps), partnerships, LLCs, sole proprietorships, and individuals. We also prepare estate and gift tax returns as well as estate and trust income tax returns.

Our fees for straightforward individual tax returns run from $250 to $400. If you've got a sole proprietorship, real estate investments, have been day-trading, or need state returns, tax preparation fees typically run from $500 to $1000.

Tax preparation fees for actively operated C and S-corporations (Scorp), LLCs and partnerships start at around $700 but can quickly rise in cost based on the complexity of the return and on the amount of year-end accounting that we need to do in order to get your accounting records in the condition needed to prepare your tax return. An involved C or S corporation federal return, for example, often runs somewhere between $ 1,500 and $ 3,000.

Tax preparation fees for estate and gift tax returns and for estate and trust income tax returns usually run from $500 to $1000 per return (depending on how much work the attorney does).

Federal Tax Preparation Services & Tax Help

A key part of our practice is providing federal tax preparation services and tax help. Specifically, we provide federal tax preparation services and tax help for C and S corporations, partnerships, trusts and estates, limited liability companies (LLCs), sole proprietorships, and individuals.

If you want us to prepare your partnership or corporate return, simply call us and we'll together figure out what we need to do your return. (For starters, you'll want to get us a complete set of financial statements for the year, the previous year's return, and your fixed assets records.)

If you want us to prepare your individual tax return, call use to make an appointment and then collect the information identified in the list that follows:

  1. Your federal and state income tax returns from last year.
  2. The names, social security numbers, and birthdays of any dependents you intend to claim on your return.
  3. Any W-2s or Form 1099s, together with records of any other compensation received during the year.
  4. Any Schedule K-1s you received from partnerships, S corporations, estates or trusts of which you are an investor or beneficiary.
  5. Business income and expenses from any unincorporated business you operated during the year (sole proprietorship).
  6. Details as to any investment property, including stocks, bonds and real estate, you sold during the year. In addition to the type of property sold, I will need the purchase date, number of units purchased, purchase price, sale date, number of units sold, and sales price.
  7. Details as to any other sources of income, such as income from rents, royalties, trusts and estates, farming, unemployment compensation, social security benefits, and any other income received during the year.
  8. The date and amount of contributions made to an Individual Retirement Account (IRA), Roth IRA, Simplified Employee Pension (SEP) or Keogh, the name of the institution maintaining the accounts of such plan, and your account number.
  9. The dates and amounts of any distributions you received from retirement-type plans during the year.
  10. Information about any alimony you either paid or received during the year, as well as any child support and medical expenses not reimbursed through insurance or otherwise.
  11. Significant medical, dental or medication expenses not reimbursed by your health insurance.
  12. Any other "non-income" taxes you paid during the year, including federal and state income tax, self-employment tax, real property tax, and personal property tax (such as on a boat or car).
  13. The statement (Form 1098) furnished by your mortgage interest lender. If you purchased a residence or refinanced a mortgage during the year, bring the settlement sheet, which will reflect any interest charges paid at settlement, including "points."
  14. If you sold a personal residence during the year, we will need the closing statement from the sale, and similar information about any replacement residence that you purchased.
  15. Any gifts to churches or other charities, in cash or property, the names of such charitable organizations, and any receipts for your contributions. Also, if you used your personal vehicle in performing services for charitable organizations, we will need records of your mileage.
  16. Any losses due to casualty or theft, together with any insurance reimbursements received.
  17. Employee business expenses incurred during the year which were not reimbursed by your employer, such as work-related entertainment, travel or educational expenses.
  18. Records relating to any other deductible expenses, such as moving expenses, professional dues, student loan interest payments, tax return fees, investment fees, and gambling losses.

Note - The above material is easier to collect that you might think. Most of the items come in an envelope marked "important tax document."

Delinquent or Non-Filed Tax Returns

We Can Get Those Delinquent Returns Filed!

Whether you have not filed last years return or are 10 years behind, we can bring you current in those non-filed returns.

If you do not have the records to file, we can also help you reconstruct your tax return, especially if you were self-employed and have misplaced the records.

We also prepare partnership, business and corporate returns.

If, after preparing the returns you owe taxes that you cannot pay, our firm can help you in negotiating with the IRS and the resolution of paying your back taxes. The IRS requires taxpayers to be current in all filings before a levy can be released. Once current, an offer in compromise can be submitted (if you qualify), or an installment agreement can be arranged. We offer full representation throughout the preparation and collection process.

If you have one year or ten years that have not been filed, contact us and allow us to be your full service tax professionals.

Practical Reasons for filing your Past Returns and Why People Fail to File

There are numerous practical reasons to file tax returns. Whether buying a home or financing a business, copies of filed returns must be submitted to the lending institution. Social Security retirement and disability benefits as well as Medicare are all computed based on a person's lifetime earnings reported to the IRS and the Social Security Administration. State benefits such as unemployment compensation and industrial insurance are also based on reported income.

Why do otherwise law-abiding, conscientious citizens suddenly stop filing federal income tax returns? IRS research has shown taxpayers first fail to file a return in a year when circumstances change. For either emotional or financial reasons (or a combination of both), they are unable to prepare and file a return. The reason might even be procrastination. Whatever the reason, failure to take corrective action only compounds the problem.

When the next year's return is due, the taxpayer faces a dilemma. Will filing call attention to them? What about the forms needed to prepare the earlier return? What about the financial burden of paying taxes due in previous years? What if they have lost some of the records needed to prepare the earlier return? There is also the stress of worrying about being discovered and audited by the IRS.

Substitute Returns can be prepared by the IRS

The IRS continues to improve its database of income transactions and has increased its ability to identify people who have a filing requirement but have failed to file a return. The law allows the IRS to file a substitute return for people who do not voluntarily file. A series of letters is first sent explaining the possible action and the recourse available. If no return or other indication of disagreement such as a request to exercise appeal rights is received, the IRS then assumes you are single with no dependents and uses the standard deduction for the relevant year in determining the outstanding tax due. This return is created using all the income sources reported to the IRS by employers, vendors and so on. Any sales of stocks, bonds, or mutual funds are treated entirely as a short-term capital gain (which is taxed at your ordinary marginal tax bracket), without any consideration or offset for the cost of those securities. Once the tax assessment is made, the IRS will start pursuing your assets through liens, levies and garnishments. This means your bank account can be frozen, massive percentages taken from your paycheck and so on. The point being that you do not want to let delinquent tax return problems grow. If the IRS has already filed a substitute return, we recommended that you still file your tax return to correct for any additional items, such as dependents, to select the correct filing status, home mortgage interest, real estate taxes and the cost basis for any securities which you may have sold. The IRS generally allows you to correct or amend the return(s) they filed for you.

You can lose your refund if you fail to file a return after three years.

Another reason to file is because the clock is running on any refunds due. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within the three years, the money becomes the property of the U.S. Treasury. After the expiration of the refund statute, not only does the law prevent the issuance of a refund check, it also prevents the application of any credits, including overpayments of estimated or withholding taxes, to other tax years that are underpaid.

Statutes of Limitation

On the other hand, the statute of limitations for IRS to assess and collect any outstanding balances does not start until a return has been filed. In other words, there is no statute of limitations for assessing and collecting the tax if no return has been filed.

IRS Shift in Philosophy to get taxpayers back into the system

Starting in the late 90's, the IRS underwent a complete shift in philosophy when it came to dealing with taxpayer issues. Essentially, the agency stopped spending hundreds of hours of manpower to collect a few thousand dollars in taxes. Instead, the IRS came to the conclusion it was better in the long run to simply get taxpayers back into the system. This philosophy applies to delinquent tax returns, to wit, the IRS is more interested in getting you back in the system than beating you into the ground.

If you haven't filed tax returns for a few years, the first step is to have returns prepared for those years. You may have excellent records for those years, but this is fairly unlikely. If you don't, we can request copies of W-2s and third party vendor statements from the IRS, which essentially totals the income the IRS has on record for you for a particular year. Using these figures, tax returns can be prepared and filed.

Once you've created tax returns for the missing years, you may realize you don't have the money to pay the taxes. The IRS acknowledges this situation occurs frequently and we can assist you in setting set up a payment plan for the repayment of overdue taxes.

Penalty and Interest Assessments by the IRS

Failing to pay your past due taxes is technically a misdemeanor, for which you can be fined up to $25,000 for each delinquent tax year and possibly sent to prison for a maximum of one year. But the IRS is much more interested in getting you to pay your taxes than sending you to prison. So the IRS doesn't prosecute anyone who comes forward voluntarily to remedy the problem, unless there are signs of blatant fraud or you're a public figure who's drawn attention to your tax delinquency.

The IRS will, however, charge you penalties and interest for any tax you may end up owing for previous years. The "good" news is that the IRS can't assess penalties higher than 25 percent of the tax due for a particular year. But interest continues to accrue on top of the penalties, and adds up pretty quickly, especially for taxes several years overdue.

With our help, we may be able to persuade the IRS to cut down on the penalties owed if we can prove you had "reasonable cause" for not filing your prior year's tax return(s). Circumstances the IRS has considered as "reasonable cause" include:

  • Death of a family member
  • Mental illness
  • Bad advice from your accountant (Not us, but your old accountant!)
  • Loss of records from Hurricanes or other natural disasters
  • Extended military service

We Can Get Those Delinquent Returns Filed!

So remember, whether you have not filed last years return, or are 10 years behind, we can bring you current in those non-filed returns.

We also prepare partnership, business and corporate returns.

If, after preparing the returns you owe taxes that you cannot pay, our firm can help you in negotiating with the IRS and the resolution of paying your back taxes. The IRS requires taxpayers to be current in all filings before a levy can be released. Once current, an offer in compromise can be submitted (if you qualify), or an installment agreement can be arranged. We offer full representation throughout the preparation and collection process.

If you have one year or ten years that have not been filed, contact us at 305-668-3099 and allow us to be your full service tax professionals.


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