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By Bruce Kellogg

Dealing With Taxes

Most people, including investors, need to deal with income taxes. Many prepare their own returns manually or using purchased software programs. Others trundle down to franchise tax preparation offices with their brown bags of pay stubs and receipts. (Hah!)

Some have their own CPA or EA (Enrolled Agent) prepare their return for them. Everyone here tries to be frugal, to minimize their tax preparation expense.

What often is missing is “Tax Strategy”, which can vastly overshadow the supposed benefits of filing parsimony. For example, Tony Watson (EA), of Robert Hall & Associates, spoke at a recent investor meeting of 323 attendees regarding the features of the just-enacted CARES Act.

One feature will allow certain taxpayers to go back and amend prior returns to receive a tax refund. Will the tax software company, or the franchise tax preparer, or your CPA or EA, contact you to alert you to this taxation tactic that could produce thousand$? Right. Not hardly.

Meet Tony Watson, EA

Tony Watson is an Enrolled Agent who focuses on providing personalized financial guidance and tax preparation services to individuals and businesses. As a federally-licensed tax practitioner, Tony helps his clients make sound financial decisions, and works to ensure all eligible deductions are received when preparing taxes.

Should a client need assistance with audits, collections, or appeals, Tony is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service. In addition to his one-on-one client work, Tony Watson is the keynote speaker for Robert Hall & Associates.

He speaks on various tax-related topics at over 200 engagements throughout California each year. His dedication to his clients and expertise in the field of taxation led him to win the Glendale Readers’ Choice Award for Best Tax Preparer in 2016, and 2019. Tony loves tax work!

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Hiring a Tax Professional

Investors who view their property ownership as a business often create entities like Limited Liability Corporations (LLC’s), or partnerships or corporations of various kinds. Even with individual ownership there are good reasons to hire a tax professional. Here are several.

  1. Small errors that you make can result in large penalties.
  2. You could miss paying quarterly estimated tax payments, or underpay them, and owe additional tax. If you expect to owe $1,000 or more when you file your return, you should file for your estimated taxes, according to Tony Watson.
  3. If you have employees and practice withholding of employment taxes for federal, state, and local, including Social Security and Medicare, you need to timely file and pay both the employees’ and the business’ payments.
  4. Filing late has penalties.

A personal illustration is the author’s son. Age 36, he owns a consulting business that grosses $210,000. He pays his accountant $3,500, and says he saves four times that compared to filing his own tax return. The savings comes from the tax strategy that the accountant provides.

That’s where the high dollar benefits come from, strategy. That’s the big benefit from hiring a tax professional.

Following up

Interested readers can follow up by vising and setting up a complimentary initial consultation.

Bruce Kellogg

Bruce Kellogg has been a REALTOR® and investor for 38 years. He has transacted about 800 properties in twelve California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches.

Mr. Kellogg is a contributor and copy editor for two national real estate wealth-building magazines: Realty411, and REI Wealth Monthly. He is a recipient of an Albert Nelson Marquis Lifetime Achievement Award, listed in Who’s Who in America – 2019.

He is available for consulting with syndication, turnkey, joint-venture, and other property purchasers and note investors nationally, and other consulting assignments.