Planning on Using Turbo-Tax This Year? Think Again.

November 26th, 2016


Due to the anticipated tax reductions from a Trump Administration  and Republican Congress, year end planning and 2016 tax return preparation  will provide significant tax savings opportunities.  Therefore self-preparing your 2016 returns may end up costing you more than you think.



         When should you hire a tax pro?


Published: Apr 18, 2016 8:02 a.m. ET

More than 50 million Americans prepare their own taxes, but that doesn’t mean you should

Bill Pugliano
You probably won’t find this guy entering numbers into Turbo Tax.



Personal finance reporter

Of the nearly 151 million individual U.S. income tax returns filed in 2015 for the 2014 tax year, more than 50 million were prepared by individuals — and not tax professionals — a jump of more than 5% over 2014, the IRS says

And that trend appears to be continuing in 2016. So far through April 1 of this year, the IRS says that self-prepared returns are up 3.5% over the same period in 2015, with returns filed by tax professionals falling 3.7%. And many people filing on their own use online tax-prep software.

If you go with a certified public accountant (CPA) or other tax professional, the cost of the return could jump to over $1,000. (A registered tax preparer can do your return but only has limited ability to represent a taxpayer if complications come up, and while CPAs can represent you before the IRS, only the highest tax experts, Enrolled Agents, can actually represent you in tax court. EA’s that aren’t lawyers though have to pass a test administered by the court before they can do so.)

With that in mind, here’s a list of the scenarios when you might be better off seeking a professional:

1. You’re rich: If you’re single and making more than $250,000 — or married and making more than $300,000 jointly — it’s probably time to bring in a tax pro. “Many deductions, credits and exemptions begin phasing out near these levels and tax planning can yield significant results,” says Blake Christian, partner and CPA with the accounting firm of Holthouse, Carlin & Van Trigt LLP in Long Beach, Calif. In addition, beginning in the 2014 tax year, high-income taxpayers may also have to pay a 0.9% additional Medicare tax on wages over $200,000 ($250,000 for joint filers), says Perlman of H&R Block’s Tax Institute.

2. You’re retired: If you’re within a few years of retirement, it’s worth consulting a CPA or a tax professional to maximize retirement funding and evaluate how long your retirement and other funds will last. Retirement to another state or to a foreign country needs to be looked at carefully since there are often numerous state and federal issues, such as mandatory minimum distributions taxability of pensions and other qualified plans, taxability of a home sale, and cost of living and medical issues, says Christian.

3. You’re Elon Musk: Checking with a tax pro when you plan to buy or sell a business often ensures that the company being sold is tidied up and the business can be sold in a tax-efficient manner. A CPA or other tax guru can recommend the most efficient tax structure for the sale of a business or the formation of a business, when assets may need to be removed, when it’s necessary to cut costs, and when employee contracts should be reviewed and updated. If you manufacture or process items in the U.S. — The Domestic Production Activity Deduction can offer significant federal tax savings, Christian said.

4. You’re moving: Whether it involves an intra-state or inter-state move, you’ll probably need the help of an accountant to take advantage of every tax break. “Hundreds of special tax incentive zones, local and federal tax incentives for hiring and investing in specific regions can be secured with proper planning,” says Christian. In addition to filing other states’ returns, you may have to file some type of annual report on business ownership and activities and pay a fee, says Perlman. “Most states have income-allocation rules based on factors such as receipts, payroll, and real estate,” she says. Taxpayers can also generally claim credits in their state of residence for taxes paid in other states, Christian adds.

5. You do business in foreign countries: “Foreign business structures may be taxed differently in the U.S. than you might expect,” says Perlman. “For instance, a foreign corporation may be taxed as a partnership in the U.S.,” she says. In addition, if you are a U.S. citizen or resident, you must report all of your foreign income, even if you’re allowed to exclude all or most of your foreign earned income or you would qualify for a foreign tax credit, she says. Earned income, as well as investment income, have many complex federal and state treatments and planning opportunities, says Christian, including deducting or claiming a credit for taxes paid in other countries.

Even if you only operate in the U.S., but export U.S. manufactured products, you can reap valuable benefits by establishing an Interest-Charge Domestic International Sales Corporation, says Christian.

6. You bought a yacht — or a plane: Big ticket item purchases such as your personal residence, a vacation home, a boat, a high-end car, or a plane should involve a CPA as there are methods for minimizing costs, including sales and use tax, says Christian. Check with a CPA too if life insurance, annuities, or investments are going to be purchased or sold off.

7. You’re planning your estate: Even if you’re under the federal $5.45 million exemption (2016) for estate taxes, it’s worth talking to a tax professional to help with asset protection, since many states have different thresholds and other fees of settling the estate. (probate fees)

“Reviewing how assets will be distributed and may be revalued for tax purposes upon the death of the decedents is critically important with estate taxes lower than combined income tax rates to beneficiaries in certain states,” Christian said in an e-mail. Also, Christian notes that there are annual gift tax exclusions of $14,000 per donor or beneficiary which can allow tax-free transfers without using up your lifetime estate exemption.

8. You’re an Internet millionaire (or on paper): Can you explain the Black-Scholes method of determining the value of your stock options, if you’re lucky enough to get them? If not, check with a tax professional. “Whenever a taxpayer exercises or even holds any company stock options or is getting compensated from an employer with equity or assets other than cash, a CPA should be consulted,” says Christian. “They will never get this right on their own.”

9. You’re Lord of the Manor: Even a simple residential rental property requires extensive record keeping and proper reporting of income and expenses, says H&R Block’s Perlman. “You need to be mindful of special rules involving passive losses, renting of your personal residence or vacation home, and new depreciation rules,” she says. Other issues, such as bonus depreciation, repairs and maintenance rules could also trip you up, says Christian. In addition, if you’re a homeowner, there are dozens of tax breaks available that a tax professional may know about that you don’t.

10. You don’t know the new laws: Did you get an invite to the NIIT? A new (2014) assessment called the net investment income tax (NIIT) of 3.8% may apply to income from dividends, interest, capital gains, and even rental activities. “It’s important to understand when the tax applies (and when it doesn’t) and what strategies may be appropriate to minimize it,” says Perlman. And as the Supreme Court has recognized same-sex marriage and as states comply, couples may file federal tax returns using a married filing status.


How Will Trump’s Presidency Impact The Economy?

November 26th, 2016


Blake Christian, CPA/ MBT, Holthouse Carlin & Van Trigt LLP

President-elect Trump has made it clear that he will be focusing on infrastructure projects during his first 100 days, so hopefully some of the long overdue projects in Long Beach, such as the 710 Freeway, will get some funds.


If Mr. Trump takes a hard line and directs the Secretary of the Treasury to label China a “currency manipulator,” we might see a short-term trade embargo from the Chinese side, which would negatively impact the port traffic, and also impact U.S. exporters – and possibly manufacturers using imported raw materials.


Tax reform is also at the top of his list and, since he will have cooperation of the House and Senate, we will likely see some quick tax reform, including a decrease in personal (maximum 33%) and business tax (15%) rates, as well as a promised favorable 10% rate on foreign earnings that are brought back onshore. Congress will undoubtedly challenge the new president with respect to the trillions of dollars of deficit increase these tax cuts will cause. Therefore, the ultimate tax changes will likely not be as dramatic as Mr. Trump has proposed.


From a public safety standpoint, President Trump will be pushing to pass the Restoring Community Safety Act, which is focused on reducing surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increase resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars. While Long Beach crime is down in most areas, this bill, if passed, may offset some of the negative impact anticipated from the recent passage of Proposition 57.


One final thought. Trump’s focus on improving the Veteran’s Administration should benefit our local VA hospital and possibly Fisher House also. He mentions both fairly regularly.


Presidential Tax Promises vs. Reality. What Will Trump Do?

November 26th, 2016

Trump’s Likely Tax Reductions in 2017 Will Change Your 2016 Year End Tax Planning Strategies

November 26th, 2016

Updated: November 22, 2016


CONTACT: Blake Christian, CPA/ MBT Tax Partner

Holthouse Carlin & Van Trigt LLP, CPA’s

(435) 200-9262 Office

(562) 305-8050 Cell







President-Elect Trump’s Tax Platform and Year-End Planning Steps

By: Blake Christian, CPA/MBT and Paige Pribble



In light of the recent election results there are many opinions on how President-Elect Donald Trump’s presidency will impact the United States, as well as the world.  The central question for the business community is:  “How will President Trump’s economic and tax policies impact jobs, the stock markets and the federal deficit?


During the campaign, Trump continuously claimed to be an advocate for the working class and one of the pillars of his political  platform was major personal and business tax reform, probably the most extensive we will have seen since the Reagan Administration.  The main questions we are left with is: How is President Trump  going to pay for these massive tax cuts, as well as other new and expanded federal programs?


The economic ramifications resulting from Trump’s tax cuts could take an already dire situation and make it worse.  As of November 15, 2016 the national deficit was in the neighborhood of $19,821,226,000,000 (that is nearly $20 TRILLION!) with annual Federal Tax Revenue coming in around $3,294,188,700,000 – far short of annual expenditures.  When Obama took office in 2009 the national debt was sitting at $10,626,877,048,913.  It is fairly obvious we are not headed in the right direction when it comes to the national debt but will Trump’s tax and economic plan really get us headed in the right direction?  Trump’s economic stimulus plan relies on creating jobs through rebuilding infrastructure somewhat similar to the “New Deal” in the Great Depression-era and bringing manufacturing jobs back to the United States.  How this economic stimulus plan will be paid for is yet to be seen. Trump claims that the increase in jobs and overall economic growth with be more than enough to make up for the spending and tax cuts.


While we can anticipate some federal funds being freed up as a result of the Trump Administration identifying and correcting the oft-mentioned “waste, fraud and abuse”, other pools of funds may include taxes related to overall increases in business and personal profits, new or increased duties and custom fees, as well as fees associated with new immigration policies.


It is very possible that some of the credits and deductions we have come to know and love might see their final on December 31, 2016, but we will need to wait and see which sacred cows Congress decides to save.  For now, we can only assume that Trump will be able to accomplish a fair amount with the Republicans in control of both the House and Senate. However, we suspect that deficit control/ reduction may “trump” getting the full tax reductions implemented and Congress will water down certain aspects of the Trump tax proposals.


In summary, Donald Trump is proposing a massive tax reduction package that is estimated to reduce federal revenue by $7 to $10 trillion in the first decade, followed by an additional $15 trillion reduction in years 11 – 20.  The majority of the tax reductions would flow to individual taxpayers, but approximately a third would benefit businesses.  Concerns about the Trump plan involve the impact on the national debt as a result of the lower tax collections.  Dramatic government cuts would likely be needed to avoid a ballooning federal debt; however, economic stimulus via the tax reductions (please refer to economist Art Laffer, the Laffer Curve and Reagan-era “Supply Side Economics”) could increase overall tax collections even with the lower rates.


For Individual taxpayers, Trump would reduce the current seven individual rate brackets – ranging from 10% to 39.6% down to three brackets of 12%, 25% and 33% (which would kick in at $225,000 of taxable income for joint filers).  He would increase the standard deduction to $25,000 for single filers and 50,000 for joint filers (thereby exempting tens of millions of lower-income taxpayers from filing), and would scale back the itemized deductions for wealthy taxpayers.  He would repeal the individual and business AMT and the 3.8% Obamacare Net Investment Income Tax, as well as the federal estate and gift taxes.  He plans on eliminating personal exemptions and the “Head-of-Household” filing status.  He also plans on phasing out certain itemized deductions, other than home mortgage interest and charitable contributions, for higher income taxpayers.  He would allow taxpayers to take a deduction for childcare relating to children under the age of 13, limited to 4 children per taxpayer, as well as for dependent eldercare. The child/ eldercare exclusion will be available for taxpayers that have total income under $500,000 for joint filers and $250,000 for single filers.


On the business side, he plans on eliminating most corporate incentives and credits  with the exception of research and development, and reducing the corporate tax rate to 15% from the current 35/36% rates, and also will limit individual taxes on flow-thru income from S corps., LLC’s/partnerships to 15% – thereby benefiting small business owners.  He would also offer an attractive 10% tax for international companies that bring foreign profits back onshore to the U.S.


Donald Trump’s proposal, with the much lower rates, larger standard deductions and personal exemption amounts would reduce taxes (and filing requirements) on lower income taxpayers and result in only an estimated 14% of taxpayers itemizing their deductions on Schedule A after the aforementioned changes.


As a result of the inevitable 2017 tax changes, year-end tax planning will be critically important this year for both business and personal taxpayers.  With Trump’s broad tax cuts, savvy taxpayers should consider accelerating deductions into 2016 and delaying income until 2017 in order to take advantage of the lower rates.


Some examples of year-end strategies include:


  1. A.    Income Deferral


-       Since 2017 business income will likely be taxed at lower rates – 15% to 20% (rather than 35% to 43.4%) – deferring business income into 2017 will likely lower overall federal  taxes.


-       Delaying the sale of appreciated stocks, real estate and other investments until 2017 when long term capital gains rates may drop from 23.8% to 16.5%.


-       Entering into Section 1031 gain deferral and other statutory deferral transactions if a taxpayer is selling appreciated real estate or other business/ investment assets at a gain and planning to immediately re-invest the proceeds.


-       Manufacturers and distributors of larger ticket items such as machinery and equipment may want to include language in their year-end invoices that the buyer is entitled inspect and return the items within a short period after year-end, in which case the profit can generally be deferred.


  1. B.   Expense Acceleration


-       Consider accelerating various personal and business deductions into 2016, since Trump is considering eliminating or scaling back the deductibility of certain items – particularly itemized deductions for high income (greater than $200,000) taxpayers. However, if you might be subject to AMT in 2016, care must be taken to ensure that the accelerated item will actually produce a benefit.


-       Purchasing depreciable assets prior to year-end in order to accelerate depreciation.  New assets are eligible for 50% “Bonus Depreciation” plus the normal statutory depreciation in the year placed in service.  Section 179 “expensing” on up to $500,000 of new or used equipment is also allowed up to the remaining taxable income of the taxpayer.  Note that the limitations may increase in 2017.


-       Purchasing a new SUV weighing 6,000 or more pounds (i.e. Gross Vehicle Weight) for business purposes can yield a first year write-off of approximately 70% of the total cost, regardless of your down payment during 2016.


-       Commercial real estate owners should evaluate securing a Cost Segregation Study in order to accelerate depreciation on certain components of the building – e.g. special electrical, plumbing, ventilation, flooring, loading docks, hardscape and landscape – all of which have depreciable lives ranging from 3 years to 15 years vs. the normal 27.5 to 39 year life for residential rental and other buildings, respectively.


-       Write-off wholly or partially worthless bad debts that are uncollectible.


-       Write-down inventory items that are worth less than your tax cost in those cases where you have offered them for sale at a lesser price within 30 days of year-end (before or after).


-       Pay employee bonuses prior to year-end if you are a cash basis business, or by March 15th, 2017, if you use the accrual method of tax reporting.


  1. C.   Other Planning Issues


-       If you are involved in a business that has hired employees and/ or acquired assets during the year, you should discuss with your tax preparer possible credits and other incentives you may be entitled to. 

-       The aforementioned changes will also generally necessitate taxpayers updating their wills, trusts and other estate planning documents.


-       Lower tax rates on ordinary, capital gain and other types of income will also impact the relative attractiveness, or unattractiveness of certain types of investments, such as municipal bonds, real estate and domestic vs. foreign income. 



-       Therefore, a careful look at investors’ entire holdings will be necessary as the specifics on the tax bill get finalized next year.


Of course taxpayers should not let the tax tail wag the dog and must make rational short and long-term decisions based on economics, rather than just the tax implications of certain decisions.


Blake is a Tax Partner and Paige Pribble is an intern in the Park City, Utah office of HCVT, a top 40 national CPA firm with deep expertise in personal and business tax planning.  HCVT has offices in California, Utah and Texas. For more information on HCVT, including career opportunities, please log on to

How Will Clinton and Trump Impact Your Personal and Business Taxes?

November 4th, 2016

Hillary vs. Trump – Tax Policy Platforms

November 4th, 2016

Hillary and Donald have dramatically different tax and economic plans.

Know their positions before you vote.

Federal Taxation of U.S. Olympic Medalists

August 29th, 2016

U. S. Taxation of Olympic Medalists – You Cannot Outrun the IRS


Both the Olympic medals and cash received from the US Olympic Committee generate tax liabilities for the Rio athletes.   Congress has attempted to exempt these earnings and awards, but has been unsuccessful thus far.


Clinton vs. Trump 2016 Presidential Tax Platforms

August 29th, 2016

Take a guess who is proposing to raise income tax rates up to 47.6% for ordinary income and capital gains on assets held less than 2 years.  Of course, if you make less than $5 million of AGI, your rates drop to a bargain of 43.6% under a Hillary Clinton presidency.   Donald Trump would remove the 3.8% Obamacare tax, eliminate estate and gift tax, eliminate the personal and corporate Alternative Minimum Tax (AMT) – resulting in top rates of 33% for individuals, 20% for long term capital gains and qualified dividends, and 15% for corporate and flow-thru S Corps and LLCs.

Green Party Candidate, Gary Johnson, would eliminate the personal and business taxes and eliminate the IRS – but don’t get too excited, he would replace these taxes with a whopping 23%+ National Consumption/ Sales Tax – which would be on top of your state sales tax.

For more info, check out all our firms’s articles and tax alerts at:







New Go-Biz California Competes Tax Credit Application Deadline is April 14th

March 27th, 2014

Last year the Governor and the California Legislature took action to wind down the California Enterprise Zone Program beginning in 2014.  EZ Credits can still be claimed on 2013 and amended in the four prior years, and employers can continue to claim hiring credits through 2018 on qualified employees hired priro to 2014.

As a replacement for the EZ program, various incentives, including the California Competes Credit Program  (“CC Credit”) has been initiated.   The CC Credit requires taxpayers to subit detailed information to Scaramento for evalauation and consideration for a pool of credits (discussed below).  25% of the credits will be earmarked for Small Businesses – defined as those with less than $2M of gross revenues.

The The California Governor’s Office of Business and Economic Development (GO-Biz) has been conducting educational sessions concerning the California Competes Tax Credit throughout Southern California this week.  Many local businesses and practitioners have attended the meetings. .  The ideal taxpayer profiles are as follows:


  • Planning to add headcount in California any time between 2014 through 2018 in excess of 2013 FTEs and/or
  • Planning to make capital expenditures in California any time between 2014 – 2018


About the Credit


The CC Credit is a negotiated income tax credit available to businesses that want to stay and grow or want to come to California.  Tax credit agreements will be negotiated by GO-Biz and approved by a newly created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, one appointee from the Senate, and one appointee of the Assembly. Credits have a carry-forward provision of 6 years.


Amount of Credits Available


California has a fiscal year that runs from July 1 – June 30.  The amount of CC credits by fiscal year budgeted by the Governor  under the Go-Biz program are as follows:


  • Fiscal Year 2013/2014 – $30M
  • Fiscal Year 2014/2015 – $150M
  • Fiscal Year 2015/2016 – $200M
  • Fiscal Year 2016/2017 – $200M
  • Fiscal Year 2017 /2018 – $200M


What To Do?


  • Apply immediatley for the current round of tax incentives
  • Evalaute other existing state and federal incentives
  • Discuss and understand your growth plans between now and 2018.


Why Now?


  • You want clients to hear from you rather than our competitors
  • Application for fiscal year 2013/2014 closes on April 14.  It may be strategically better to submit application for the fiscal year 2014/2015.  The application period for 2014/2015 should open after July 1, 2014.

HCVT has significant experience in identifying and documenting various federal, state and local tax incentives and we have deep connections within the economic development community.


We can assist you in presenting your project to maximize your probability of securing some of the avaialble tax incentives.


Please contact us today:  (562) 590-9535.    Ray Dagarag, Blake Christian or Victor Gonzales


California Governor Reinstates 50% Gain Exclusion on Certain C Corp Stock Sales

October 9th, 2013

Although somewhat limited in it’s application, the California gain exlusion for Qualified Small Business Stock (QSBS) has been retroactively reinstated back to 2008.  See IRC Section 1202 for details regardinng QSBS eligibility.


See for additional planning ideas or call (562) 216-1800.