Services Archive - Atherton & Associates, LLP

Tax Compliance and Tax Planning

Both compliance and planning are crucial steps in making sure that your tax returns have been filed correctly and efficiently—but what exactly do they both mean?

What is Tax Compliance?

Naturally, compliance takes place while returns are being filed to ensure that taxes have been filed in such a way that complies with local, state, and federal tax requirements.

What is Tax Planning?

Tax planning, on the other hand, starts before tax season and involves planned minimization of taxation.

What’s the Difference Between Tax Compliance and Tax Planning?

Compliance takes place around tax season—whereas tax planning typically takes place in the taxable year. It requires thinking ahead to maximize tax minimization by incorporating money-saving strategies into your overall tax plan. Also, whereas tax compliance is obviously required, tax planning is only recommended as something that can have an incredible impact on take-home income.

What Does a Tax Plan Consist Of?

A tax plan consists of legal ways to cut down on tax liabilities and necessitates having a good understanding of your tax situation and the tax laws you’re governed by. In addition, these plans also require projections for the next tax year that take business and personal tax liabilities into account.

An experienced CPA will know to take a look at your present and past tax situation and be able to form an accurate and valuable projection of your next tax year.

To ensure that your taxes are compliant—and that your tax plan maximizes
returns—contact Atherton & Associates, LLP.

Controversy & Dispute Resolution

Unfortunately, the tax process is not always smooth. Audits and disputes can sprout up from unanticipated errors or risks, and the results can be costly. Controversy and dispute resolution services exist to help you prepare for this in a number of ways—including following certain steps before your audit, navigating tax litigation, and more.

Pre-Audit Plans

Before an audit, there are a number of steps to ensure that you’re prepared. Firstly, make sure that your process includes strategies which can assist your operation in an audit. These include pre-filing rulings such as unilateral agreements and advance pricing agreements.

Keeping contact with the proper tax authorities is also integral to get insights into the tax process so you can be more certain that you’re protected against penalties. In addition, internal reviews of audit and controversy risks are crucial to making sure an audit doesn’t take your operation by surprise. Once risks are identified, incorporate risk management into your processes.

Dispute Resolution

Attaining resolutions to disputes can be an intricate process, requiring a tax official to properly guide businesses to the most efficient conclusion. An accountant can analyze your business’ tax risks to anticipate and manage controversies and disputes in order to save you time and potentially money.

There are two types of disputes and controversy to account for— federal and state and local. The IRS, in charge of federal taxation, have a wide array of areas in which they can analyze for audit purposes. The state and local taxes, on the other hand, are subject to an increasing bevy of regulations.

For more information or assistance with handling your controversy and dispute resolution needs, contact Atherton & Associates, LLP.

Credits & Incentives

Taxation isn’t all liabilities, and we believe our clients should be getting the most out of the credits and incentives that they are eligible for. Our team of experts actively seeks out credits and opportunities that provide our clients not only the information, but the full understanding of the benefits in addition to updates and attentive service. We’re able to work with you to find and secure federal, state, and local tax credits that are available to you.

What Tax Credits Are Available to Me?

There are a wide variety of credits and incentives. It mostly relies on a number of independent factors, but fortunately, our experts are able to asses credits opportunities based on each individual client’s situation.

Incentives by Location

We make sure to analyze the incentives available in a client’s area in order to guarantee that they’re able to take advantage of as many tax incentive opportunities as possible.

Ongoing Research

n order to ensure that you’re receiving the maximum amount of credits and incentives, we make it our goal to stay informed and aware of ongoing changes to programs that will be relevant to our clients. In so many cases, tax saving opportunities can be missed if information is overlooked—but our experts conduct the proper research to provide you with the maximum refunds.

Work Opportunity Tax Credit (WOTC)

For companies who employ workers who experience barriers to employment, the WOTC offers a reduction in federal income tax liability. We’re able to provide information from our knowledge and research that can effectively be integrated into your new hire process and allow you to attain more tax credit opportunities.

This is just a small sample of the credits and incentives that you might be able to claim. At Atherton & Associates, LLP, we strive to find all credits and incentives to benefit your business. Contact us today to find out what you’re eligible for.

International Tax

Taxes are an intricate business—one that only grows more complicated over time. International tax regulations, in specific, require a specialized knowledge to fully understand the opportunities available.

For every multinational corporation within a country, the country itself taxes their income—and the United States is no different. In fact, the United States also requires a minimum tax on multinational income that’s used in low-tax countries—whereas other countries exempt foreign-source income.

What is Foreign-Source Income?

Ever since the TCJA in 2017, the federal government has an established set of rules for the separate categories of income earned by US resident multinational firms. Those physical assets which represent only 10 percent per year on physical assets, deemed a “normal return, are exempt from US corporate income tax. However, all above the 10 percent return—referred to as the Global Intangible Low Tax Income—is subject to an annual tax at a rate of 21 percent on domestic income.

To make things more confusing, GILTI does mean the corporation is subject to an 80 percent tax credit of their foreign income taxes page. This 80 percent credit can wholly eliminate the GILTI tax for US corporations whose income foreign countries tax isn’t less than 13.125 percent. Although beneficial to many US-based multinational countries, it still makes the matter of international taxation a complicated situation to address—and it’s a process that prioritizes earning income in high-tax countries.

Most countries will utilize a system that exempts the majority of “active” foreign income from taxation—and others still employ hybrid systems that can exempt those systems which are similar to the home country’s tax system. This exemption gives an incentive to earn income in low-tax countries, unlike the established US tax system, because this foreign source-income does not require a minimum tax.

The international tax system in the US can seem intimidating—but our experts at Atherton & Associates, LLP are here to provide assistance for even your international tax needs.

State & Local Tax

The State and Local Tax (SALT) deduction is one that has gone through considerable changes in the last few years. It stands as one of the largest federal tax expenditures, although the estimated cost will plummet after the Tax Cut and Jobs Act (TCJA) increased deduction amounts, capping the SALT deduction at $10,000.

But what does this mean for the taxpayer? The TCJA limits the SALT, meaning that taxpayers cannot deduct more than 10,000 of total state and local taxes. It is a provision set to expire after 2025, but for now has reduced the amount of taxpayers who will itemize deductions.

With the tax system constantly evolving, it’s good to know where you stand—and our experts at Atherton & Associates, LLP can help advise you on what’s best for the largest return.

Tax Structuring

The tax process often includes meticulous planning and careful execution. Some higher-income ventures might start accounting for their tax liabilities and deductions the year before. Tax structuring is yet another way in which direct and indirect tax costs can be reduced—this time with the use of efficient structure and trading arrangements.

What Does Tax Structuring Involve?

Tax structuring is focused on efficiency, and as such, focuses on the following specialized fields: international tax planning, value chain transformation, group tax-planning programs, and more. The entire goal of tax structuring is to find and utilize tax-efficient methods of obtaining profits from investments.

In fact, tax structuring should be one of the first steps in a tax-planning process for any business, publicly-traded corporation, or multinational enterprise. Through tax structuring, you can attain structural tax improvements, increase shareholder value, and be able to account for future changes in your business.

Why Consult a Specialist?

Our specialists offer close analysis of tax structuring plans for our clients, consulting and identifying problems and solutions to mitigate taxes. Tax structuring takes place in such a crucial time in the process and is a complicated but essential step.

At Atherton & Associates, LLP, with the help of our team of experts, we can help construct a plan and tax structure that’s best for your business.

R&D Tax Credit

The Research & Experimentation (R&D) Tax Credit has a storied history that began in 1981 as the Economic Recovery Tax Act. It was made to ease the tax burdens of companies that were doing research, and has been so integral to our system that it was factored permanently into the government spending bill in 2015.

This tax credit has proven invaluable for a plethora of businesses throughout the years, saving companies hundreds or thousands of dollars as they perform research and experimentation that takes place anywhere from life science laboratories to the production floor.

Do I Qualify for the R&D Tax Credit?

There are countless companies that don’t utilize the R&D tax credit, just because they’re not certain if they qualify for it. In order to determine if you are eligible for the R&D tax credit, you must determine:

- Does what you’re doing qualify as research?

- How would you utilize the credit?

- Do you have documentation that supports your research?

Answering these questions will provide insight into whether or not you qualify, and get you much closer to claiming an integral credit that can ease tax liabilities. Eligibility is simpler than businesses tend to think, as a company must only meet two requirements: a) they must have less than five million dollars in gross receipts and b) they must have no more than five years of gross receipts.

But My Company Doesn’t Specialize in R&D

When some companies hear “R&D,” they assume they must be in the sciences—but you don’t have to have a research laboratory in order to qualify for the R&D tax credit. Companies that run field research or manage test kitchens—or even utilize wineries and distilleries—can claim the R&D tax credit. It is an open definition that includes all manner of experimentation.

Do you want to find out if you qualify? Contact our experts at Atherton & Associates, LLP for more information.

Preparing an Estate Plan

Preparing an estate plan can be difficult, and each step of the process can be complicated in its own way. Getting an estate plan ready is a multi-step process that involves not only information gathering, but reviewing and analyzing.

Calculate Your Net Worth

First things first, you need to determine your net worth by adding up the rough estimates of all of your assets. This includes personal property such as collectables and vehicles, retirement plans (401ks and IRAs), business interests, real estate, etc. You take this number and subtract it from your liabilities—a.k.a, your debts, loans, and mortgages. Finally, you must determine if your estate is liable for federal estate taxes and the full scope of what that might look like.

Establish the Need for an Estate Plan

There’s a good likelihood that your estate won’t be valued near federal estate tax limits, but there are still other fees—even if you’re not beholden to the estate tax it can still be an expensive process. Probate, for example, can be arduous and costly. There’s also the matter of handling significant assets: you’ll want to be certain that your property is in good hands and is distributed according to your wishes. Therefore, it’s crucial to find an expert to lend a hand.

Find a Good Professional

It’s crucial to have someone with experience to guide you through the estate planning process. It has a myriad of moving parts and those preparing plans are faced with many choices that can be very important to their loved ones.

A will is a contract, and any contract—if written incorrectly—can have consequences. Poor phrasing can invalidate an estate plan, and every aspect of a will carries with it formalities which must be observed.

Not to mention, there are many steps in the process of estate planning—even after hiring an attorney. These include determining if you need a will or revocable living trust, what to do if you become mentally incapacitated, forming a plan for what happens after your passing, wisely choosing fiduciaries, and more.

At Atherton & Associates, LLP, we strive to prepare you with the best information and advice for the hard questions.

Fiduciary Accounting

Fiduciary accounting is, in short, a comprehensive report that analyzes a time period in the life of a
trust, estate, or conservatorship. It can also reference the process wherein a fiduciary, such as a
trustee, keeps principals up-to-date with transactions and investment policies.

Although some bookkeeping can be done independently, fiduciary accounting can be carefully
scrutinized by the IRS or the courts—so any fiduciary accounting must be conducted very
precisely. A specific and specialized knowledge of accounting and protocol is crucial to handling a
fund that requires accounting of this kind.

What Does Fiduciary Accounting Involve?

Typically, fiduciary accounting requires a high level of transparency between principals and those
who are handling the accounts. With this in mind, a careful summary should be prepared that
clearly states the purpose and content of the account. Following that, the account should
represent information that is integral and important to the principals.

The account will also reflect the value of assets at acquisition, current values, gains, losses, and
significant transactions.

Do I Need to Hire an Accountant?

Absolutely. Again, because fiduciary accounting is such a specialized field, it should only be
conducted by an experienced accountant. Our accountants at Atherton & Associates, LLP are
equipped to assist you with our extensive institutional knowledge about fiduciaries and fiduciary
accounting.

For more information about Fiduciary Accounting, contact Atherton & Associates, LLP.

Estate & Trust Administration

Estate and trust administration involves the management of trust property in accordance with the terms laid out in the trust document. There are a number of steps involved in the process, to ensure that beneficiaries are properly benefited after the death of the settlor. The best practice is to hire an attorney to help you through the process.

What is Trust Administration

The process starts with a notice to beneficiaries, after which they have an allotted amount of days to file a trust contest. If there are no contests, the beneficiary surrenders their ability to file.

What is Involved

If there is real property in the trust, then the title must be bestowed to the successor. This is to make certain that the settlor’s wishes are observed in regards to the property. After this, the trustee must take account of other trust assets (investment accounts, etc.) and transfer the title of those, as well.

In addition, the trustee must oversee the trust and keep a careful eye on trust activity. This can include using trust funds to cover the decedent’s affairs and reviewing documentation to decide what accounting for the fund should look like. Before even starting the administration process, it is strongly advised that trustees seek out an attorney so that they can know how much they are obligated to perform.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leoOnly once assets have been collected and distributed and the taxes filed can the trustee distribute the remaining assets. That’s where the trust document comes is, as it will decide how the remaining assets are distributed.

For more information or assistance with your estate and trust administration, contact Atherton & Associates, LLP.