A. Shleifstein & Co. CPAs

Partner

Lubin & Associates

Tax Consultant

Roth and Company LLP

Senior Tax Associate

Schwartz, Lubin & Co. CPA

Tax Associate

CPA for Growing Businesses & Individuals | Ask me how we can handle ALL of your accounting needs

Let's be honest: Taxes stink, and the Tax Code is utterly confusing. You're trying to run a successful business, and you don't have the time or energy to focus on taxes. Even if you did, you still wouldn't want to do it.

That's where we come in. We take the burden off of your shoulders. Our services include entity formation, bookkeeping, tax planning and saving strategies, business and personal tax return preparation, and so much more. We have your back when it comes to Uncle Sam. You keep doing your thing, while we deal with all of the tax-related headaches.

Our initial consultation is absolutely free, so if you're unsure about anything, you have nothing to lose. Reach out today!

"As long as my CPA signs off on it, I'm in the clear."

No, you're not.

Many people believe that once their tax preparer signs their tax returns, the responsibility for those tax returns shifts to their accountant.

That's usually incorrect.

The IRS says that the taxpayer (and not the tax preparer) is legally responsible for the tax returns.

Yes, this means even if the CPA made a mistake, you will still be on the hook for any taxes + penalties/interest.

It's possible you may be able to sue the accountant for damages, but the IRS still generally holds the taxpayer directly responsible to them.

(The IRS may also discipline the tax preparer in certain situations.)

It may not be fair, but those are the rules.

My point?

Two-fold:

1) Be selective when choosing a tax preparer.

2) Make sure to review your tax returns.

You don't want to find out the hard way.

Aaron Shleifstein, CPA

Need assistance with your taxes? I can help | CPA for Growing Businesses & Individuals

People are sometimes curious what tax accountants do when we're not preparing tax returns.

Well, here's one example:

I have a client who recently relocated to a new home to be near their children.

Their new home is, well, not so new.

They need approximately $100K for renovations, and they want to withdraw that $100K from a (traditional) retirement account in early 2026.

After speaking with them, I advised them to withdraw half of the money in 2025 and the remaining half in 2026.

Why?

There were a few factors in play here, but mainly because they would be keeping their overall taxable income in lower brackets for 2025 and 2026 rather than being in a higher bracket for 2026.

This strategy would cause them to pay a lower percentage of tax on the entire $100K distribution.

Secondly, for Medicare purposes, adding the $100K to any one year would likely result in a Medicare surcharge, known as IRMAA.

Splitting it between two years would spare them from this surcharge.

Not sure if the average person finds this more or less interesting than preparing tax returns, but it's these kinds of "what-if" scenarios that help keep us busy during the year.

One of the first signs a new business owner may be in trouble:

The conversation usually goes something like this:

"Hey, I recently opened a new business, and I'm looking for a new accountant.

I have my income going into one bank account, but I have my business expenses coming out of various accounts, including personal bank accounts and credit cards."

This is a big no-no.

First, it becomes incredibly difficult to track the accurate amount of your income and expenses for income taxes.

Second, and just as important, you are setting yourself up for potential IRS headaches.

No reasonable IRS auditor is going to sift through all of your personal credit cards and trust you that the charges that you say are business-related are actually business expenses. (Yes, I know you are an honest guy.)

If you are looking for a final reason why this is a red flag, just Google "piercing the corporate veil."

I will warn you - it ain't pretty.

You don't want to go there.

If you are starting a new business, do it correctly. 

From the very beginning.

The most effective way I have found to use AI is by turning one model against another.

For example, I will pose the exact same question to Gemini and ChatGPT.

Once they each give their (usually different) answers, I'll give Gemini's answer to ChatGPT and ask it to critique it, and I'll do the reverse.

What ensues is an AI war.

I recently got this gem from Gemini in response to an answer that ChatGPT gave regarding a complex prepaid expense question: 

"This is a classic case where AI (ChatGPT) got 'too smart for its own good' by applying a general rule while missing the specific exception that governs this exact situation."

Aside from the entertainment factor, this also introduces nuances in the tax code and other areas that can be quite helpful.

This back and forth catches important items that a single model might miss.

At this stage of the AI game, it simply is not reliable enough.

But two "minds" are better than one.

One of the hardest parts of owning my own firm is the responsibility.

Ultimately, everything rests on my shoulders.

I can live with the fact that maybe I'm not the greatest salesman (I hate sales!) and won't get every potential client that comes my way.

I don't mind the extra long hours during the busy seasons, although it can get kind of stressful.

But knowing that a client is relying on me and that a potential error can make a big monetary difference?

That is a burden I take very seriously.

Every time before I efile a client's tax return, I stop for a second and feel the weight of that responsibility.

With that being said, the benefits of having your own firm far outweigh the challenges, in my opinion.

If you own your own business, it's perfectly OK for you to wait to pay your taxes until April 15th, right?

Na.

Not cool.

If you have a business or are earning income where taxes are not being withheld/submitted to the government, you can't just wait until April and hope for the best.

I'm talking to you, Ms. Freelancer, and to you Mr. Crypto Maven.

The IRS expects you to pay as you go through quarterly estimated payments.

If you miss these payments, you will possibly be hit with underpayment of estimated tax penalties (if you do not hit the safe harbor rule).

Unfortunately, I see these IRS notices each year, and trust me, they can be costly.

The IRS has a point.

People that are on salary from their employer have taxes withheld from each paycheck, so everyone is held to that standard.

My advice to such clients is they should be viewing their taxes as a quarterly issue, not just an April concern.

$10,000/week for life or a $10 million lump sum - which would you choose?

Yesterday, there was chatter on a number of chats I am on regarding someone that recently won a NY lottery scratch-off prize.

This got me thinking: Which of these prize options makes more sense?

1) Option A - $10K/week for life ($520K/year before taxes)

- Assuming the winner lives in NYC, the taxes on this could realistically be in the 40-43% range, leaving them with approximately $300K net per year.

- The NY Lottery guarantees to pay out at least $10 million (before taxes), which means even if a person dies, the $10K payments will continue for a total of approximately 20 years. 20 years = roughly $6 million after tax.

- If the person is relatively young and healthy and lives another 50 years, this could amount to $15 million after-tax dollars!

2) Option B - $10 million lump sum

- First things first, they're not giving you $10 million. "$10 million" means the present value of $10 million paid out over 20 years. (A dollar today is worth more than a dollar tomorrow.) So, even before taxes, the lump sum payment is more likely approximately $6.25 million.

- Assuming the same facts as earlier, the taxes on this one lump sum payment could realistically be in the 50% range, resulting in a lump sum of about $3.1 million after-tax dollars.

So, what makes more sense?

Would you rather have $3.1 million dollars today, or $10K/weekly guaranteed for 20 years, maybe 50 years? 

Before you answer, there's an important point to recognize: If you take the $3.1 million lump sum and invest it, say at a 6% return on your investment, the $3.1 million will grow to almost $10 million in twenty years, significantly more than the $6 million total from weekly payouts (which also can be invested, but in a staggered manner).

Would you choose the annuity or the lump sum?

I think most people would be satisfied with either 😉.

Did I miss anything?

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