Sharon Gross - Strategic Tax & Financial Guidance Backed by Experience You Can Trust

For accurate tax preparation, you should provide identification (photo ID and Social Security numbers for you and dependents), prior year's tax return, W-2s, 1099s, investment income statements, and records of other income such as rental property or self-employment. Also include documentation for deductions (mortgage interest, property taxes, charitable donations, medical expenses, education credits, etc.), business expenses if self-employed, and any notices from the IRS. Trusts or estates may require legal documents and income distributions (K-1s).

Legal tax minimization strategies include maximizing retirement contributions (401(k), IRA, SEP), using tax-advantaged accounts (HSAs, FSAs), tracking deductible expenses, and investing in tax efficient vehicles. Real estate investors may use depreciation and cost segregation. Business owners can benefit from entity structure optimization, expense categorization, and hiring family members. Tax-loss harvesting for investments and taking advantage of education and energy credits can also help. Working proactively with a CPA ensures you're not missing these opportunities throughout the year.

Common deductions include mortgage interest, state and local taxes (SALT), charitable donations, student loan interest, medical expenses (above a threshold), and self-employed business expenses. For credits, popular ones are the Child Tax Credit, Earned Income Tax Credit (EITC), American Opportunity and Lifetime Learning Credits, and energy-efficient home improvements. Credits directly reduce taxes owed, while deductions reduce taxable income. Your eligibility depends on your income level, filing status, and life events like having children or attending school.

Your structure impacts how profits are taxed. Sole proprietorships and LLCs offer simplicity and pass-through taxation, but may result in higher self-employment tax. S-Corps reduce self-employment tax by splitting income into salary and distributions, but have stricter rules. C-Corps are taxed at a flat rate but face double taxation unless profits are reinvested or carefully distributed. A CPA evaluates your revenue, growth plans, and personal tax situation to recommend the best structure, which may evolve as your business grows.

For individuals, the main deadline is April 15 (or the following Monday if it falls on a weekend). Quarterly estimated tax payments for self-employed individuals are due April 15, June 15, September 15, and January 15. Businesses may have different deadlines based on entity type-March 15 for S-Corps and partnerships, April 15 for C-Corps. Extensions are available but payment is still due on the original due date. Staying ahead with a tax calendar can help avoid penalties.

Good recordkeeping is key keep all receipts, logs, and documentation to support your income and deductions. Respond to audit letters promptly, remain calm, and contact a tax professional immediately. You may be asked to mail in documents (correspondence audit) or meet in person (field audit). Do not volunteer unnecessary information. A CPA can help organize your response, represent you, and reduce risk of penalties or expanded review. Preparation and professional support are your strongest defense.

When selling property, capital gains tax may apply on the profit, with exclusions available for primary residences (up to $250K single/$500K married if you meet the ownership/use tests). Depreciation recapture applies to rental properties. Buying a property may provide deductible mortgage interest and property taxes. Investment properties allow for 1031 exchanges to defer taxes. Real estate transactions should be reviewed by a CPA to account for timing, deductions, and potential planning strategies.

Start by contributing to tax-advantaged accounts like 401(k)s, IRAs, or Roth IRAs. Traditional accounts defer taxes now, while Roths offer tax-free withdrawals later. Diversify retirement savings across both for tax flexibility. Consider income timing, required minimum distributions (RMDs) at age 73, and Medicare-related tax impacts. Roth conversions and tax-efficient withdrawals can reduce your lifetime tax burden. Working with a CPA helps you build a retirement income strategy that aligns with your tax bracket and estate goals.

Investment income includes interest, dividends, and capital gains. Long-term capital gains (held over 1 year) are taxed at lower rates than short-term. Use tax-loss harvesting to offset gains. Qualified dividends are taxed more favorably. Tax-efficient mutual funds and municipal bonds can reduce liability. Keep accurate records of cost basis and holding periods. A CPA can help create a strategy to manage timing of gains, minimize taxes, and align investment income with your overall financial picture.

Wealth transfer planning includes using the annual gift tax exclusion ($18,000 per recipient in 2024), trusts, family limited partnerships, and lifetime exemption amounts. For larger estates, strategies such as irrevocable trusts, charitable giving, and asset freezing can reduce taxable estate value. Proper titling of assets and beneficiary designations are key. A CPA can coordinate with estate attorneys to create a plan that ensures assets pass efficiently and with minimal tax impact to heirs.

While tax software is affordable and convenient, it lacks the expertise and proactive planning a CPA provides. A CPA understands complex tax laws, changing regulations, and opportunities specific to your life or business. They can offer advice, review your situation in depth, and represent you before the IRS. CPAs catch red flags, uncover savings opportunities, and help you make strategic financial decisions year-round-not just file a return.

Begin with a cash flow forecast to understand your inflows and outflows. Identify slow-paying clients, seasonal trends, and unnecessary expenses. Use tools like budgeting software or CPA-prepared reports to monitor performance. Review pricing, payment terms, and financing options. A CPA offering interim CFO services can help you develop a strong budget, analyze profitability, and set financial goals to build a healthier, more predictable business cash position.

Employees require payroll tax withholding, W-2 reporting, and compliance with labor laws, while independent contractors receive 1099s and manage their own taxes. Misclassifying workers can lead to penalties. Employees increase overhead, but offer long-term value; contractors offer flexibility but come with less control. A CPA helps you navigate classification, set up payroll correctly, and assess tax implications based on your business model and growth goals.

Keep tax returns and supporting documentation for at least 3 years, or up to 7 if you file a claim for loss or underreport income. Retain W-2s, 1099s, receipts, bank statements, canceled checks, mileage logs, and records of large purchases. For real estate and investments, keep records for as long as you own the asset plus 3-7 years. Digital and organized storage systems make retrieval easier in case of audit or financial review.

Multi-state income often requires filing in more than one state, with credits to avoid double taxation. Each state has its own rules on residency and sourcing. For international income, you may need to report foreign bank accounts (FBAR), pay U.S. taxes on global income, and claim foreign tax credits or exclusions. Tax treaties and the Foreign Earned Income Exclusion can help. A CPA experienced in multi-jurisdictional filing is essential to stay compliant and avoid overpaying.

Consider your legal entity, licensing, startup costs, and accounting method. Many startup costs are deductible in the first year. Set up proper bookkeeping, estimate taxes quarterly, and understand your industry's regulations. Expansion may trigger nexus in other states, payroll complexity, and asset depreciation opportunities. A CPA helps you prepare budgets, assess financing options, and plan for scalable growth while staying tax compliant.

The IRS treats cryptocurrency as property, so each sale, trade, or conversion is a taxable event. You must track cost basis, holding period, and fair market value at the time of each transaction. Staking and mining rewards are also taxable. Failure to report can trigger penalties. Many investors use crypto tax software in tandem with a CPA to ensure full reporting and proper treatment on returns.

Don't ignore it-read the notice carefully and act promptly. Many are routine or request clarification. If it's a bill or audit, gather all documentation and contact a CPA before responding. A professional can verify if the claim is accurate, help you file an amended return if needed, or request penalty abatement. Timely response avoids further penalties or enforcement actions.

Tax laws evolve with inflation adjustments, legislation (like the Tax Cuts and Jobs Act), and temporary credits or relief measures. These affect standard deductions, income brackets, retirement contribution limits, and available credits. Staying informed through a CPA ensures you’re adapting your strategy-especially when planning for investments, business operations, or wealth transfers. Even small changes can have big implications on tax liability.

Plan early. Contribute to retirement and health savings accounts, time income and deductions strategically, keep detailed records, and consider tax-efficient investments. Evaluate your business structure annually, use quarterly estimates to avoid penalties, and explore charitable giving strategies. Proactive planning with a CPA throughout the year—rather than just at tax time can lead to substantial long-term savings and fewer surprises.