Waiting for your regular appointment to discuss current tax-related issues can create problems or cause you to miss out on beneficial options that need to be timely exercised before year-end. Generally, you should contact us any time you have a substantial change in taxable income or deductions. By doing so, we can advise you about how to optimize your tax liability, avoid or minimize penalties, estimate and pre-pay required taxes, document deductions, and examine and explore tax options. You should contact us if you or your spouse:

• Receive a large employee bonus or award
• Become unemployed
• Change employment
• Take an unplanned withdrawal from an IRA or other pension plan
• Retire or are contemplating retirement

• Exercise an employee stock option
• Have significant stock gains or losses
• Get married
• Separate from or divorce your spouse
• Sell or exchange a property or business
• Experience the death of a spouse during the year
• Turn 70½ during the year
• Increase your family size through birth or adoption of a child
• Start a business or acquire a rental property
• Receive a substantial lawsuit settlement or award
• Get lucky at a casino, lotto, or game show and receive a W-2G
• Plan to donate property worth $5,000 ($500 if a vehicle) or more to a charity
• Plan to gift more than $13,000 to any one individual during the year

In addition, you should contact us whenever you receive a notice from the government related to your tax return. You should never respond to a notice without first checking with your tax professional.

Sunday night, the Academy of Motion Picture Arts and Sciences put “Oscar” on a diet, cutting out live performances for “Best Original Song” nominees and trimming the traditionally bloated and self-indulgent awards program to just over three hours. Movies about movies were the big winners. “Hugo,” Martin Scorsese’s homage to French director Georges Melies, took five awards early in the evening. And “The Actor,” a black-and-white silent film celebrating Hollywood history, took home five more, including the coveted “Best Picture.”

Host Billy Crystal managed to sneak in a joke about about taxes during the broadcast — he remarked that the “Harry Potter” movies had grossed over seven billion dollars in worldwide receipts but paid just 14% in taxes! (Apparently that “taxium minimoso” spell is a real winner! It also helps if you can keep your bank records in disappearing ink.) But while the tax man rarely gets a star turn on stage, he still manages to clean up at awards time.

For starters, you know how nominees walk away with fat “swag bags” filled with goodies and bling? Those bags are taxable, of course. This year’s bag is valued at $62,023.26 (down a bit from last year’s $75,000). It includes little “party favors” like a $135 bottle of Purell hand sanitizer (bagged in a gold and crystal studded carrying case), $120 worth of “earthpawz” environmentally-friendly pet accessories (Dirty Dog Floor Cleaner & Mud Remover, Doggie Slobber Window & Glass Cleaner, Doggie Grime All Purpose Cleaner, Smelly Dog Odor Eliminator and Eco-Tabs Stain & Odor Remover), and a $178.99 “thermarobe” wireless heated robe.

The swag bag also includes bigger-ticket gifts like a $15,580 four-night safari — on elephant back, no less — in Botswana, a $15,000 cocktail party for up to 100 guests sponsored by liqueur maker DiSaronno, and a $3,350 stay in an oceanview suite in Punta de Mita on the Mexican Riviera. Some nominees actually refuse the bags to avoid the tax hit, while others — including A-lister George Clooney — have donated the contents to be auctioned for charity.

Oscar nominations and Oscar victories give films a famed “Oscar bounce” — and that means taxable income for everyone involved. “Best Picture” nominees earn an average of $17.7 million after their nomination and another $4 million after the show. Best Picture winners earn $27.5 million after their nomination and $15.4 million after the show. (In fact, some Hollywood insiders watch box-office receipts between the nomination and the show, to divine who will take home the statuette.) Those millions ripple throughout the film economy: theatres pay tax on ticket sales and concessions; studios pay tax on their own receipts; writers, directors, actors and others with “points” pay tax on back-end profits; and even the kids who serve popcorn and soda pay tax on their meager paychecks.

Oscar nods also boost performers’ future paychecks. That means serious tax planning if the lucky winners don’t want 35% of the difference winding up in Uncle Sam’s pocket. Of course, you don’t have to be a movie star to cut your taxes. It just means you need a plan of your own — one that takes advantage of every legal deduction, credit, loophole, and strategy. We’re here to help you star in that plan!

America’s economy continues to sputter. But stocks are picking up steam and flirting with four-year highs. We’re even seeing new “dot-coms” hitting the market. Last May, the social networking site LinkedIn went public at $45 per share, then leaped to $94.25 in its first day of trading. Internet coupon vendor Groupon opened in November at $20 per share, then jumped 31% on its first day of trading. And earlier this month, Facebook filed registration papers with the Securities and Exchange Commission for what may be the hottest IPO since Google.

Companies typically go public to raise money to expand. But Facebook doesn’t really need cash from an IPO. The company made nearly $4 billion in advertising revenue in 2011. So why go public?

Well, companies also go public to let founders and early investors cash out. Mark Zuckerberg, Facebook’s 27-year-old founder, is already a “paper” billionaire, ranked #14 on the Forbes 400 list of richest Americans. (Not many entreprenuers find themselves richer than Scrooge McDuck while still at an age that they watch Scrooge McDuck.) But Facebook’s IPO will give Zuckerberg and fellow early investors liquidity, converting paper wealth into cash for the houses, charitable gifts, and other spending that new dot-com millionaires historically indulge in.

The IPO will also stick Zuckerberg with a historically large tax bill. (You knew that was coming, right?) In fact, one of the big reasons the company is going public in the first place is give Zuckerberg a way to pay taxes when he exercises options to buy even more stock.

Here’s how it works. For tax purposes, the value of most stock options is treated as compensation and fixed the day you exercise them — whether you actually sell them or not. Let’s say you pay $5 to exercise a share of your employer’s stock, on a day when that stock is worth $25. Your company gets a deduction for that $20 per share, even though there’s no cash outlay. That’s great for the company. But at the same time, you’ll owe immediate tax on $20 of income, even if you hold the stock in hope of future appreciation. (If the stock tanks before you actually sell, you still owe tax on that gain.) That may not be so great for you!

Zuckerberg currently owns 414 million shares of Facebook. He also has options to buy another 120 million shares for — get this — just six cents each. Zuckerberg has announced plans to exercise those options and sell enough shares to cover his taxes. We don’t know yet what Facebook shares will trade for. However, private-market trades have valued shares at $40 each. If Zuckerberg exercises all 120 million options when shares are valued at that price, his taxable gain will be nearly $5 billion. He’ll owe 35% to the IRS, plus 10.3% to the state of California, for a total tax bill of over $2 billion. That’s right, billion with a “b.” Can you imagine signing a return with a billion-dollar tax bill? How about signing a check for that much — payable to the IRS!

The important thing to realize here is that Zuckerberg’s tax bill came as no surprise. It’s actually the result of careful planning. Remember, Zuckerberg’s pain is Facebook’s gain. The strategy will probably give Facebook enough deductions to wipe out the entire tax on its 2011 profit, plus refunds from 2009 and 2010, plus even more to carry forward.

Think about that the next time you click the “Like” button on your computer. And remember, we’re here to bring the same sort of smart tax planning to your business.

A decade or more ago, the Super Bowl had become a bit of a joke. Fans looked forward to watching the commercials, sure. But the actual game itself had become a dreary series of lopsided blowouts. Super Bowl XXIV was perhaps the worst offender, with the San Francisco 49ers pounding the Denver Broncos, 55-10, in a game that wasn’t nearly as close as that score suggested!

More recently, the game has been more competitive and more entertaining. The NFC champion New York Giants reached this year’s “big dance” by defeating the 49ers, 20-17, in a game that came down to the final play — in a Cinderella playoff run that followed a middling regular season. The AFC champion New England Patriots made it by beating the Baltimore Ravens, 23-20, in a game that came down to the final play. That set up Sunday’s contest, when the Giants defeated the Patriots, 21-17, in yet another game that came down to the final play.

Sunday’s game proved the truth of the old cliche that “offense sells tickets, but defense wins games.” Patriots coach Bill Belichick gambled by actually letting Giants running back Ahmad Bradshaw score in the final minute in hopes of keeping precious time on the clock. That gamble succeeded in giving quarterback Tom Brady 57 seconds to engineer a last-minute drive — but ultimately failed when Brady’s desperate final heave to tight end Rob Gronkowski fell harmlessly to the ground.

That same cliche about defense winning games applies to your finances as well — especially when it comes to tax planning. If you want to put real money in your pocket, you’ve got two choices:

•    Financial offense means making more money. (As Charlie Sheen would say, “duh.”) But that’s not always easy, especially in a tough economy like today’s. You can invest all sorts of time efforts into growing your business or your income, only to see them sail wide right like a missed field goal.
•    Financial defense means spending less money. That’s often easier than making more. And when it comes to spending less, it makes sense to focus on the big expenses. For most affluent Americans, that means taxes, rushing you like the Giants’ backfield. Maybe you can save 15% or more on car insurance by switching to GEICO. But in the long run, how much can that really do for you?

Financial defense is important enough that some financial moves which look like offense are actually defense in disguise. Wall Street is buzzing about Facebook’s upcoming initial public offering, wondering if the company can really be worth $100 billion. But the company is raising “only” $10 billion in cash. And Facebook doesn’t need the money. They’re “engineering a liquidity event,” in large part so founder Mark Zuckerberg can pay his own taxes! (We’ll talk more about this as we get closer to the actual offering.)

It’s easy to think of us as just “tax people” and focus on the forms we file for that April 15 deadline (April 17 this year, for you procrastinators).  But focusing on just compliance misses the value you get from proactive tax planning, and misses the total value we offer as your financial “defensive coordinator.” So call us when you’re ready to “call an audible” and play real financial defense. We promise not to let the IRS just walk the ball across the goal line!