Returns Prepared by an Attorney-CPA Who Reviews Every Line for What It Means — Not Just What It Says

The federal individual income tax return covers all income sources wages, self-employment, pass-through business income, investment income, rental income, retirement distributions, and more along with the deductions, credits, and elections that reduce the resulting liability. For business owners, the individual return is the endpoint of a chain that runs through one or more entity-level returns and reflects decisions made throughout the year.

We prepare complex individual returns involving Schedule C (sole proprietorship), Schedule D (capital gains and losses), Schedule E (rental and pass-through income), self-employment tax, net investment income tax, alternative minimum tax analysis, and the interaction of multiple K-1s from S-Corps, partnerships, and trusts. Basis tracking, passive activity loss management, and at-risk limitation analysis are addressed as part of the preparation rather than left to the client to reconcile.

The S-Corp return reports entity-level income, deductions, credits, and separately stated items and generates Schedule K-1s for each shareholder allocating their pro-rata share. The return must track the accumulated adjustments account (AAA), other adjustments account, and each shareholder's stock and debt basis all of which affect the taxability of distributions and the deductibility of losses.

We prepare Form 1120-S in coordination with the shareholders' individual returns, ensuring that shareholder basis is tracked correctly, that reasonable compensation is properly reported, and that the return is consistent with the shareholders' K-1s. Separately stated items Section 179 deductions, charitable contributions, investment interest, and others are allocated correctly and reconciled to the individual returns.

The partnership return is among the most technically complex in the federal tax system. Partnerships can make special allocations of income, deductions, and credits among partners subject to the substantial economic effect requirements of §704(b). They involve outside basis and capital account tracking, §754 step-up elections, guaranteed payments, and potentially complex §704(c) and §743(b) adjustments when partners join or exit at values different from their inside basis.

We prepare partnership returns for multi-member LLCs, investment partnerships, real estate partnerships, family limited partnerships, and professional services partnerships with K-1s that correctly reflect each partner's allocable share of all income, loss, deduction, and credit items. Capital account reconciliation and outside basis tracking are maintained from year to year, not reconstructed annually.

C-corporations are taxed at the entity level currently at a flat 21% federal rate before any after-tax profits are distributed to shareholders as dividends. The C-Corp return tracks earnings and profits, net operating losses, dividends received deductions, and tax credits. For closely held C-Corps, accumulated earnings tax exposure, personal holding company status, and reasonable compensation for shareholder-employees are all considerations that affect return preparation.

We prepare Form 1120 for closely held and family-owned C-Corps, including the annual analysis of distributions to ensure they are not recharacterized as constructive dividends, and the coordination with shareholder W-2s to document reasonable compensation. For C-Corps that have recently converted from S-Corp status, we track built-in gains recognition and the S-Corp earnings and profits account.

Irrevocable trusts and estates that earn income must file Form 1041 for each tax year in which they have taxable income of $600 or more. Trusts are taxed at extremely compressed rates the highest federal bracket (37%) applies to income above just $15,200 in 2024 which makes the distribution deduction and the timing of distributions one of the most significant planning variables in trust administration.

The distribution deduction allows the trust to deduct income distributed to beneficiaries, shifting the tax liability from the trust (with its compressed rates) to the beneficiary (who is typically taxed at lower individual rates). But distributions must carry out distributable net income (DNI) in the correct order and character and the K-1s step-cardd to beneficiaries must accurately reflect the character of the income distributed. Errors in DNI calculation or K-1 preparation create problems at the beneficiary level that are difficult to correct after the fact.

The federal estate tax return (Form 706) is required for estates that exceed the applicable exclusion amount $13.61 million per individual in 2024 and is due nine months after the date of death with a six-month extension available. We also file Form 706 for qualifying estates below the threshold when a portability election is desired, preserving the deceased spouse's unused exemption for the surviving spouse's estate.

Form 709, the annual gift tax return, is required whenever taxable gifts exceed the annual exclusion amount, when gift-splitting is elected between spouses, or when gifts are made to irrevocable trusts or under certain other circumstances even if no tax is due. Consistent, accurate 709 filing across years maintains the running account of lifetime exemption used a record that matters when the estate tax return is eventually filed.

The Form 990 is an annual information return not an income tax return that reports the organization's income, expenses, programs, governance, compensation of officers and key employees, and transactions with related parties. It is filed publicly and is available to anyone who requests it. The narrative portions of the 990 program accomplishments, mission descriptions, and governance disclosures are as important as the financial schedules, and a poorly drafted 990 can undermine donor confidence even when the organization's finances are sound.

We prepare Form 990 (for organizations with gross receipts over $200,000 or total assets over $500,000), Form 990-EZ (for smaller organizations), and Form 990-PF (for private foundations). For organizations with unrelated business income, we prepare Form 990-T as well ensuring that UBIT is correctly identified, computed, and reported, and that the organization is not inadvertently converting exempt activities into taxable ones.