Esther Phahla, CPA, announced July 26, 2018 that she is now a Certified Tax Strategist. This is the highest-level designation that started out as one of just under 700 tax professionals who has completed the American Institute for Certified Tax Planners training academy leading to the Certified Tax Coach designation. You start out as a Certified Tax Coach then you progress to other levels based on the tax planning engagements you have completed for your clients and additional course work throughout the years to keep up with changing tax laws.
“Taxpayers who really want to beat the IRS and take a proactive approach on their taxes can’t wait for their accountant to work magic with a stack of receipts on April 15,” says Phahla, “They need a plan for taking advantage of every deduction, credit, loophole, and strategy allowed.”
“Traditional tax professionals focus on putting the right numbers in the right boxes on the right forms,” says Dominique Molina, a San Diego-based CPA and Director of the American Institute for Certified Tax Planners. “Our program is different,” she continues. “We don’t just help our client’s record history. We help them write it, with a complete menu of advanced tax-planning concepts and strategies.”
The American Institute for Certified Tax Planners program focuses on court-tested, IRS-approved strategies for minimizing Alternative Minimum Tax, maximizing deductions from real estate and passive activities, maximizing retirement savings, and similarly powerful strategies. As taxes rise to cover increased government spending, this sort of proactive planning will become even more important in the future.
To earn the designation Esther Phahla completed an intense training program. She has also agreed to abide by the AICTP Code of Ethics and complete 24 hours of tax-planning continuing education each year. What led Esther Phahla to qualify for this highest designation is clients like Gwen and Philip. Gwen works as a medical doctor who was paid as an Independent Contractor by the hospital she is contracted to. Every year she filed her Schedule C and took all the available deductions and paid her hefty quarterly estimates and a huge tax bill until they met with Phahla to discuss missed opportunities based on the entity structure she was operating under. Phahla compared different entity structures looked at what’s available based on Gwen’s profession. Similar to Gwen’s medical profession, she diagnosed the problem, prescribed the solution and filled the prescription (Implementation of a better entity structure and deductions that would benefit Gwen not just one year but many years to come). This resulted in Gwen saving over $37,000 in tax liability and allowed Gwen and Philip to have some left-over cash to put down payment for their dream home.
With the passage of the tax reform Gwen came in again for her quarterly tax review to evaluate if the entity structure she chose a few years ago was still a better choice for her. As you all know starting in 2018 corporations can enjoy a flat 21% tax rate, while passthrough entities (sole proprietors, LLCs, S corporations, and partnerships) were afforded a special deduction of up to 20% qualified business income but it’s not a straight forward deduction as you have to follow a sequence of steps to check if the taxpayer does qualify. After deeper analysis, we realized that the there is additional work that needs to be done since Gwen falls under the personal service business definition (medical professionals, law, accounting, consulting). We made a few changes to make sure that Gwen still enjoys the tax savings and give her peace of mind to enjoy her profession and trusted us with her ongoing business needs.
Is it time to rethink your entity structure? The Tax Cuts and Jobs Act of 2017 has presented many new opportunities. You might be missing out if you don’t explore your options. Want to find out if you are in the optimal entity considering tax reform? Contact us for a complimentary 30-minute session.
Esther Phahla is a Certified Public Accountant and Certified Tax Strategist in Temecula. She also holds a Master’s of Science in Taxation. She is the Best-Selling Author of a Tax Planning book “Why Didn’t My CPA Tell Me That”. She is also the author of “10 Most Expensive Tax Mistakes That Cost Business Owners Thousands”. Esther is passionate about proactive tax planning being the key to reducing taxes. She has spent hundreds of hours of continuing education to ensure she provides the best solutions for her clients. Over the years Esther has helped hundreds of business owners save thousands in tax savings. She has given seminars on proactive tax planning as well as written a number of articles on the topic. She can be reached at (951) 514-2652 or visit www.estherphahlacpa.com.