Category Archives: Tax Planning

Should I Hire a Professional to Do My Taxes, or File Myself?

Tax time could be a stressful time of year and one that means impending expenses to be paid, or it could be a breeze so much so that you wonder why everyone has a freak out around tax time. A way to potentially ease your tax-time stress is filing your taxes the right way—and no, we don’t mean jointly or separately.

The choice of choosing whether you want to hire a professional vs. handling it yourself can be likened to any job or project. Cost is a factor, as is time investment and skill. Let’s take a look at some advantages of both methods.

Filing Yourself

If you file yourself, you’ll usually save a good bundle of money. There are tons of services out there that let you file your taxes yourself—often, for little or no cost. If you’re looking for the budget-friendly option, filing yourself is probably it.

You can also save yourself a lot of time by filing separately if you don’t have very complex financial needs. If you aren’t itemizing and looking for every deduction, you can breeze through the process in no time at all by filing online. If you’ve got a more complex situation, this option may be best left by the wayside.

Hiring a Professional

By hiring a professional to do your taxes, you can add a personal element. Like a trusted family physician, an accountant can learn about your specific situation and what’s important to you. They can even make suggestions you’d never think of. Never underestimate the value of good advice.

Accountants also shine when it comes to complex situations. If you’ve got a lot of different deductions, or you may be managing a business or two plus a few rental properties, filing taxes can quickly become overwhelming. Having a knowledgeable resource to answer your questions and wade through the murky areas can be a lifesaver.

The Bottom Line

When everything is said and done, you need to consider your or your family’s personal situation. Are you looking for a budget-friendly, speedy and simplistic approach? Or, are you trying to find a knowledgeable expert to handle your complex financial needs? That will determine how best to proceed.

Do you have complex financial needs and would like to hire a professional? We can help.

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.
Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

At A Glance: Tax Cuts & Jobs Act

The Tax Cuts and Jobs Act, passed in December 2017, brought the biggest tax overhaul in 30 years and has probably left many people with questions. It’s important to understand how the elimination of deductions, compression of tax rates, and brand-new benefits for certain taxpayers could affect your strategy.

If you’re interested in a deep dive, we have an article with our key thoughts for you to check out and read more. If you’d like a broader overview, we’ve included a handy chart to help you identify exactly where and how you may be affected next tax season.

Click image to View PDF

Are you affected by the Tax Cuts & Jobs Act?
Do you need to re-evaluate your tax strategy?
Schedule a consultation today!

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

Key Thoughts on the Tax Cuts and Jobs Act

Debra Taylor, CPA/PFS, Esq

The Tax Cuts and Jobs Act has made major changes to the tax code. It’s important that you understand these changes to best plan your tax strategy going forward.

The Tax Cuts and Jobs Act has brought the biggest tax overhaul in 30 years and has left many with questions.It’s important that you understand how the elimination of deductions, compression of tax rates, and brand-new benefits for certain taxpayers will affect your tax strategy. According to the Tax Policy Center, four out of every five taxpayers can expect a reduction, but for many lower-income taxpayers, that tax cut will be so little it may hardly even be noticed. And if you live in a high-tax state or you rely heavily on deductions, you are likely to see a tax increase.

Every taxpayer will need to assess their individual situation. Here are some initial thoughts and areas tobe discussing with your financial advisor. Of course, any advice below is subject to your specific tax situation, with consideration to your state of residence and AMT, among other things.

Missing SALT

The SALT deduction previously allowed taxpayers to deduct state and local taxes to avoid being taxed on the same income twice. Reduction of the SALT deductions will be most acutely felt in the six states that accountfor half of the value of these deductions: California, Illinois, Maryland, Massachusetts, New Jersey, and New York, according to the Tax Foundation. If you live in one of these states, you should talk to your financial advisor about your overall financial plan, as the elimination could affect cash flow and the value of your home.

Previously, a typical couple with two homes in one of these high-tax states was able to lower their ultimate tax burden by 25%. Now, their tax burden has actually increased, and these folks may want to consider tax- friendly states such as Texas, Arizona, or Florida.

If you are committed to living in a high-tax state andare unable to move or declare residency anywhere else, there are a few tax-smart moves that could help your situation.Consider bunching deductions— take the standard deduction one year and itemize the next. By employing this tried-and-true strategy, you may be able to takethe most advantage of some of those lost itemized deductions. For instance, you may claim the standard deduction in one year, and then prepay your real estate taxes and mortgage payment and fund your charitable contributions the next year, which will enable you to take the full advantage of your deductions.

If you donate to charity

Charitable contributions are another area that will be impacted by the tax law changes. Due to the expansion of the standard deduction to $24,000 per couple, it is likely that fewer people will itemize deductions going forward. In the past, about 30% of taxpayers currently itemized, but it is estimated that fewer than 10% will itemize in the future as a result of the new Tax Act, particularly if you live in states with little to no income or real estate tax.

If you take the standard deduction rather than itemizing, you cannot take deductions for charitable contributions. What you can consider, however, is opening a donor-advised fund and prefunding it with several years of donations. Once you fund the account, you can then take one large up-front deduction, potentially itemize that year on your tax return, and then spread the distributions to the charities in future years when you are using the standard deduction. Essentially, it allows taxpayers to separate the act of donating from the actual year of deduction, which is
a newish concept but may make sense under the new law.

If you own a pass-through business entity (lucky you, I think)

Everyone who owns a small business and has pass- through income should be asking what they can do to take advantage of the new 20% deduction aimed at pass-through business owners. By taking advantage of the qualified business deduction, a couple with a small business that has less than $315,000 of income could pay almost $20,000 less in taxes. However, higher- earning doctors, lawyers, accountants and investment managers could have net tax increases despite lower tax rates, as they will lose most of their state and local tax deductions.

If you have large amounts of pass-through income, reconsider whether you should change your business entity to a C corporation to take advantage of the new 21% top tax rate. Service firms that are looking to expand or who have cash flow they don’t need to pay out should look hard at becoming a C corporation.

Careful with Roths (but we still love ’em)

Previously, if you made a Roth conversion you had the ability to undo the conversion by October 15th of the following year. This was done through a Roth recharacterization. The Tax Cuts and Jobs Act has eliminated the Roth recharacterization, meaning there will be no opportunity for a redo on Roth conversions going forward.

This means that if you perform conversions in the future, they will require additional thought. You should discuss a conversion with your financial advisor before
taking any action to make sure it is the best move.

Paying the tuition bills?

Beginning in 2019, the tax bill changes the treatment of alimony in one important way. Under the Tax Cuts and Jobs Act, alimony is no longer treated as deductible for the payor, nor is it treated as income for the payee. Due to this important change, divorcing spouses may consider property settlements over alimony in the future. In addition, the new Tax Act may decrease the transfer of payments or property from one spouse to another, if there is no income tax deduction available to the payor spouse. Obviously, the non-deductibility of alimony needs to be considered in all property settlements and divorce negotiations going forward..

Not so simple

Although the Tax Act was publicized as a way to simplify taxes, it will be anything but. You should talk with your financial advisor if any of the changes described above apply to your situation.


Debra Taylor, CPA/PFS, Esq., CDFA, writes on tax and retirement planning for Horsesmouth, an Independent organization provding unbiased insight into the critical issues facing financial advisors and their clients.

This article is an authorized reprint from Horsesmouth LLC. The opinions stated are strictly those of the author and are not to be considered a recommendation or advise of Larson Financial Group or Larson Financial Securities.

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

Strategies for Reducing Your Effective Tax Rate

As winter gives way to spring, many physicians are finding themselves in the familiar position of preparing their tax returns in advance of the April filing deadline. Compounding the stress is the complex tax code. Doctors tend to be among the busiest of professionals, making it a challenge to keep up with all the rules and nuances of tax code.

In short, tax planning is all about using legitimate and legal methods to pay as little in taxes as possible. An effective strategy will do one of the following:

  1. Reduce your taxable income
  2. Reduce your actual taxes owed
  3. Defer taxation to a future year

Reducing Taxable Income

Federal Income tax seems to hit high-income wage earners the hardest. Plus, it gets proportionately higher as income increases. Therefore, a major area of focus in strategic tax planning tends to be reducing taxable income. Unfortunately, many high-income wage earners, physicians included, do not take advantage of the deductions which can reduce taxable income which results in paying more Federal Income tax then necessary. Here is a partial list of items that tend to be available to most wage earners:

  • Charitable Contributions
  • Mortgage Interest
  • Property Taxes
  • State Income Taxes
  • Student Loan Interest
  • Retirement Plan Contributions
  • Miscellaneous Deductions: Such as Professional fees that exceed 2% of your adjusted gross income, including legal, accounting, investment, and financial planning fees.
  • Capital Losses
  • Travel expenses in connection with a job search are potentially deductible.
  • Continuing education expenses are potentially deductible.
  • Medical expenses above 10% of your adjusted gross income.
  • Long-Term Care Insurance Premiums
  • Pre-school or childcare expenses paid for your children so that both spouses can work.1

Physician Tax Deductions

For self-employed doctors and practice owners, travel related to the operation of your practice tends to be fully deductible. However, typical commuting expenses are not. Most business meals and entertainment expenses are only partially deductible. To account for these, you should keep a log noting the amount spent, date, time, place of expenditure and business purpose.2

Note: The preceding list of available tax deductions is only a partial representation. It is not comprehensive and varies from person to person. Please consult a tax professional with knowledge about your specific needs.

Reducing Actual Taxes Owed

In addition to tax deductions, physicians and other high-income wage earners should try to fully leverage all tax credits for which they are eligible. Because tax credits actually reduce your tax bill dollar for dollar, they are even more advantageous than a tax deduction. That said, quite a few tax credits have income caps that make it hard for physicians to qualify.

The following is a partial list of tax credits:

  • Higher education expenses
  • International or domestic adoptions
  • Energy-efficient home improvements (Ex. High-efficiency furnace, Solar power, etc.)
  • Each child that you have
  • Childcare so that you and your spouse can work

Delaying the Due Date

One final tax planning strategy is to delay the due date on taxes owed for as long as possible. Though this is sometimes appropriate, it can be risky for high-income professionals because they could potentially be delaying their taxes to an even higher bracket later on. Taking advantage of tax-deferred savings vehicles or utilizing 1031 exchanges in a real estate transaction are good examples of the deferral strategy.3


When seeking out a tax professional, it’s recommended to find one willing to meet with you throughout the year to help implement proactive strategies. If you wait until after the year is over to sit down with a professional and dissect your tax situation, your options for reducing your tax burden may be extremely limited.

Many doctors assume that reducing their tax burden can be achieved by finding the right accountant to prepare their taxes, when in reality it’s small changes in the way you live your financial life that can really move the needle. Rules are in place to promote home ownership, business ownership and support for charities to name a few examples. By understanding how the tax code works, you can keep more of what you earn, now and in the future.

Have Questions?


  1. Credits and Deductions for Individuals. Department of the Treasury, Internal Revenue Service. Washington, D.C. : Internal Revenue Service, (January 18, 2017)
  2. Ike Devji, JD, “Income Tax Deductions Commonly Overlooked By Doctors” (February 18, 2014). http://www.physicianspractice.com/blog/income-tax-deductions-commonly-overlooked-doctors
  3. Robert W. Wood, “Ten Things to Know About 1031 Exchanges” (January 26, 2010). https://www.forbes.com/2010/01/26/capital-gains-tax-1031-vacation-home-personal-finance-robert-wood.html

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Larson Financial Group, Larson Financial Securities, and their representatives do not provide legal or tax advice. Please consult the appropriate professional regarding your legal or tax planning needs.

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Avoiding the Growing Problem of Tax ID Theft Scams

Some taxpayers will have to wait longer than usual to receive their tax refunds due to increased measures by the IRS and state tax authorities to catch tax fraud. These organizations are also partnering with tax preparation companies to share information about suspicious tax returns so that they can detect the fraud as it happens. Some states have even requested that employers distribute their W2 forms earlier so data is available to verify the legitimacy of tax returns that were filed early.

These measures are designed to combat the growing issue of tax refund fraud. In 2013, the IRS mistakenly paid out $5.2 billion worth of refunds to identity thieves, and H&R Block estimates that the number of refunds stolen through fraudulent e-filing has roughly doubled since then.1 This past filing season, the IRS detected and stopped nearly 3 million fraudulent returns before they were processed, an increase of roughly 30% from the year before according to testimony given to the Senate Finance Committee.2 It is no surprise that tax-related identity theft is now the most common complaint filed to the Federal Trade Commission, making up roughly a third of all complaints submitted to the FTC according to the Arizona Republic.

Financial Management in Healthcare

Tax refunds are an easy target for thieves. All they need to file a false return is a name, Social Security number and date of birth. Since these scams often revolve around electronic filing, there is no paper trail leading back to the person committing the scam and it can be repeated over and over again at very little cost. Continue reading for suggestions on how to avoid being victimized by this scam, and how to detect whether a fraudulent tax return has been filed on your behalf.

Infographic: Protect Your Refund and Your Identity

Keeping Confidential Information Safe

The easiest way to avoid being a victim of refund fraud is to simply file your return as early as possible. Once the IRS processes a return with your social security number it will reject any duplicates. Other precautions such as receiving your tax forms via e-delivery and ensuring your wi-fi network is secure can greatly reduce your odds of falling prey to this kind of theft.

The IRS is also doing their part to verify taxpayer information and make it more difficult for thieves to steal refunds. They are now monitoring over 20 new data elements on each tax return to reduce fraudulent returns. The measures include reviewing the transmission of electronically-filed tax returns, including any improper or repetitive use of Internet Protocol numbers. The IRS will also be taking additional measures to verify email addresses, with tactics similar to the confirmation methods banks are currently using.

Taxpayers in Florida, Georgia and Washington, D.C. can participate in a pilot program where they establish a six-digit PIN to add an additional layer of protection to their account, even if they haven’t yet been a victim of identity theft. Other steps you can take to minimize risk include changing the password every year on the account you use to file, only giving personal information online to encrypted websites with an “https” address and using computer security software that includes an electronic firewall, virus protection and file encryption.

How to Detect and Report Phony Tax Returns

Typically, victims of taxpayer ID theft and refund fraud learn about their predicament when their tax return is rejected because ID theft criminals filed first. When the real taxpayers file, their refunds are not paid until the IRS resolves their individual case. Resolving this dispute can quickly become a paperwork nightmare for the legitimate filer. Other red flags include receiving a notice from the IRS or Department of Revenue stating that you received wages from an employer unknown to you, or if collection actions are being taken against you for a year which you did not file a tax return or owe money.

If you suspect you are a victim, it is important to respond immediately to any IRS notice and comply with their instructions. Next, you will want to file an FTC complaint and contact one of the three credit bureaus to place a fraud alert on your account. Be sure to close any financial accounts opened without your permission since your identity was compromised. Finally, you should complete IRS Form 14039, Identity Theft Affidavit to formally notify them about the theft as stated in the IRS Taxpayer Guide to Identity Theft.

Just recently, the IRS started letting taxpayers who have had fraudulent tax returns filed and accepted in their name request a copy of the fake return. Victims receive redacted copies of the forms, but the documents should still include enough details to help taxpayers figure out how much of their personal information was stolen. To receive a copy of the return, taxpayers need to write a letter to the IRS providing their name, address, social security number and proof of identity (such as a copy of a driver’s license). The IRS will acknowledge requests within 30 days and respond within 90 days.

Tax fraud attacks are constantly evolving to stay a step ahead of the fraud filters designed to identify and stop false returns. Government bodies and tax preparation companies have been working together to develop processes for sharing information that can be used to authenticate a taxpayer’s information. Even with these increased measures, most people can anticipate receiving their refunds in the typical three weeks or less time frame. Those who choose to file electronically and utilize direct deposit will likely receive their refund even sooner than that.

Have Questions?

This article is for informational purposes only and should not be construed as tax advice. Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide tax advice or services. Please consult the appropriate professional regarding your tax planning needs.
  1. Dan Kadlec “This Is the Best Way to Protect Against Soaring Tax Refund Fraud” (January 2016). http://time.com/money/4181191/protect-against-soaring-tax-refund-fraud/
  2. Kevin McCoy “IRS Seeks Taxpayer Help Battling Tax Refund Fraud” (November 2015). http://www.usatoday.com/story/money/2015/11/19/irs-awareness-campaign-identity-theft/76045778/