We have a “knowledge gap” between what people understand about their income tax compliance situation and what their CPA has to do with your tax compliance situation.

These are things that will increase your tax return price.

Understanding the K-1: “It’s Truly a Maze of Information”

Partnership and S-Corporation K-1s factor into this pricing. Think they’re just a few simple pages? Think again! These bad boys are the chameleons of the tax world – ever-changing, ever-complex. Have you got hedge funds or funds of funds? That’s not just a K-1; that’s a 4D puzzle waiting to explode in complexity.

Here are other factors to consider with your K-1s:

  • International Income and Deduction Allocations – you’ll want to look for terms like “8621”, “926,” “QEF,” Foreign Taxes, etc. on the K-1.
  • Royalties – oil and gas will typically come through as royalties with depletion that must be calculated separately.
  • PTPs (Publicly Traded Partnerships) are the gnats of the tax compliance world because they are tiny, super annoying, and can have substantial tax consequences. It is best to track the losses separately.
  • Passive Loss Limitations – if these are investments that kick out a lot of losses, then you must track those losses for each investment. Multiple investments increase complexity and time.
  • At-Risk Limitations – if these are investments that load up on nonrecourse debt but also kick out a lot of losses, then you must file a separate form called a 6198 to report.
  • QBI (Qualified Business Income) – now we’re getting K-1s with QBI broken out by activity because some activities might qualify for the deduction, and some might not.

The Investment Account 1099 – “There is More Than Just Numbers”

So, you’ve got a stack of 1099s? Each one is a story, a tiny piece of your financial journey. But here’s the twist – the more you have, your tax scenario spirals into a labyrinth of details. Are you feeling lost?

Things that increase the complexity of reporting 1099s:

  • You might only be working with one brokerage house, but they might split your money into four different accounts, all of which must be reported separately.
  • Complex interest/bond portfolios with taxable and non-taxable bonds and accretion and amortization.
  • High-volume trading portfolios don’t report all the activity to the IRS, so we must attach the activity and potentially file the return on paper due to the attachments.
  • A margin loan requires an investment interest limitation calculation, which must be tracked yearly due to carryovers.
  • All brokerage houses report their 1099s differently, and the tidiness usually goes downhill after the first tidy page.

Itemized Deductions: “The Treasure Hunt”

The complexity of itemized deductions has decreased quite a bit after 2% of miscellaneous deductions were shelved until after 2025.

However, there still are items that can increase the complexity on your Schedule A:

  • Multiple mortgages that exceed $750,000
  • Charitable donations over $250 without getting the contemporaneous written acknowledgment plus charitable contribution carryovers.
  • Medical expenses exceeding the AGI limit (nobody tracks these well unless they are in their 70s+)
  • State tax plus real estate tax plus… we get to the $10k cap quickly, but some calculations need to go into state tax refunds, and should this have been deducted on your business tax return?

Special Scenarios: “Navigating the Niche”

Have you got oil and gas royalties? Rental properties? Qualified business income? These aren’t just income streams but special chapters in your tax story. Each needs a master storyteller who can turn complex tax tales into simple, money-saving narratives. That’s where we come in!

  • Deductions that you’re entitled to as part of your Single Member LLC (remember to file your BOI reporting)
  • Retirement plan contributions – this one always takes time because it’s a weird back and forth of “if you put in this much, you pay this much in tax,” “Okay, but what if I put in THIS much? What does it do?”
  • Self-employed medical – this conversation often goes,

Me – “Can you send me your Form 1095-A?”

Client – “Oh, I didn’t receive one.”

Me – “Yes, you did. Please go online.”

Client – “Yes, I did. Here is an unreadable file.”

Me – “Please upload a PDF copy.”

Client – “I already sent that to you.”

Me – “UGH”

Time to Rethink the Professional Relationship

“The difference between death and taxes is death doesn’t get worse every time Congress meets.” – Will Rogers.

Most of you will spend more money on taxes than anything else in your lifetime.

Stop price shopping for a tax professional. The price of a product or service is just one factor to consider when evaluating its quality or the level of service provided.

Take the time to find a CPA Who Makes You Money and spends time with their clients – not just a “Numbers-in-a-Box-CPA.”

Value is better than a cheaper price point.

Are you tired of tax complexity? Ready for a change? Let’s rewrite your tax story. From K-1s to international income, from heaps of 1099s to those hidden deduction gems – we’re here to simplify it all.

Ready to save money and smile at tax time? Let’s have a conversation and make it happen!

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