(upbeat music) - Hey guys, this is "Forum 360" on Western Reserve PBS, where we have a global outlook from a local view.

Every year around June and July, it's a great time to focus on midyear tax considerations.

I know it feels like you just filed your 2022 tax return and setting aside time for midyear tax planning can help you save on your 2023 tax bill and eliminate surprises when it comes to time to file next year.

Our guest today is Antonio Golston, a certified public accountant, also known as a CPA, with Apple Growth Partners.

Antonio will share with us midyear tax planning tips for individuals and small businesses.

Hey, Antonio.

- Hey, what's going on AShira?

How you doing?

- I'm doing well, how are you?

- I'm doing okay, doing okay for a Monday.

- How's the CPA world treating you?

- You know, CPA world is treating me amazing.

- Pretty busy?

- Absolutely, super busy.

As a matter of fact, - Yeah.

- You know, as a matter of fact, second quarter estimated tax payments are rolling around.

- Oh my God, yes.

- Yeah, so that's keeping my busy.

- That's coming fast.

- Absolutely, 100%.

- Yes, June 15th.

- Absolutely.

- When this airs, it'll actually be after the deadline.

So I hope they're working on that.

- Most definitely, most definitely, AShira.

- They can take some tax planning tips for the midyear out of this conversation, so.

- Absolutely.

- So tell me a little bit about yourself.

- Well, first and foremost, AShira, I just wanna say thank you for sharing your platform with me and giving me the opportunity to come on here.

I just wanna say that you are, you know, you're doing your thing.

You are doing amazing things in the financial world.

- Thank you.

- So that's first and foremost.

I just wanted to give you your kudos and give you your flowers when it comes to that.

- I appreciate that.

- No problem at all.

As you said, I'm Antonio Golston.

I grew up in the city of Cleveland.

Graduated from Cleveland Central Catholic High School.

From Cleveland Central Catholic, went to John Carroll where I got my bachelor in accountancy.

- I did not know you went to John Carroll.

- Yeah, I'm Blue Streak.

- That's so awesome.

- I'm a Blue Streak.

- Okay, okay.

- And then from there I got my Master of Business Administration with a concentration in taxation from John Carroll University.

- [AShira] That's amazing.

- And then I got my CPA and I've been doing that for a little over 10 years now.

- [AShira] Very nice.

- Yeah.

- That's awesome.

- Thank you, appreciate it.

- So what made you choose accounting?

- What made me choose accounting?

So I always loved math.

- Okay.

- I always loved math.

I did well in my math classes in college.

And the professors and the administrators at John Carroll, they just pushed me into the profession and I'm loving it ever since.

- [AShira] Very nice.

- For sure.

- Very nice.

I love hearing the backstory before we kind of jump into the business, so.

- All good, most definitely.

- Helps us to connect with our guests a little more.

- [Antonio] For sure, for sure.

- So let's talk about midyear tax planning.

So what exactly is tax planning?

- So to me, tax planning is being able to implement different tax strategies, all the while considering the tax code.

- Okay.

- I mean, because, you know, we all want the same thing as tax professionals.

We wanna limit the tax liability as much as we absolutely can for our clients.

- Get that tax bill down.

- Absolutely, get that tax bill down 100%.

And, you know, it can be in the form of deductions, in the form of different types of tax credits, you know.

We just always want to have that open line of communication with our clients and just be transparent with everything and honest.

- Yeah, that's very nice.

I mean, just to talk about a little bit the keeping an open line and transparency with your clients.

You've been preparing taxes or just in the profession for 10 years.

- Absolutely, it's crazy, right?

- Yeah.

So is that one of the key things that you try to work on with your clients, it's just having a good line of communication?

- Absolutely, 100%.

And me personally, I love to talk to people.

I love to interact with people, with different types of people.

So it's nothing for me to just pick up the phone or, you know, send out a quick email regarding, hey, how are you doing today?

- Okay.

- Is there anything that I could help with?

You mind sending over your quarter two, quarter one financial statements so just we could, you know, just look at anything just to see if anything jumps out?

Any crazy expenditure, any crazy revenue number.

- Yeah.

- So, yeah.

- 'Cause clients sometimes don't know how often they should bug their professionals.

- Absolutely, 100%.

- Like their accountants, their financial planners, - I agree.

- their lawyers, so.

- I agree.

- Do you feel like most of the time you're starting that communication or do you see your clients kind of sending over those emails?

- You know what, most of the time I feel as if I'm starting the communication, - Okay, which is good, yeah.

- which is fine, which is fine, which is fine.

- 'Cause they don't know.

- Exactly.

- They don't know how often they should be communicating, - I agree.

- so that's great.

- Agreed, 100%.

- Yeah.

So why is it so important to be proactive with tax planning?

- It's important to be proactive when it comes to tax planning because you don't wanna miss anything.

You wanna provide your client with the absolute best service that you can provide them with.

You don't wanna miss anything, you wanna have time to be able to analyze anything that you absolutely necessarily need to analyze for your client.

As a matter of fact, case in point, one of my real estate clients in 2021, they were thinking about doing a capital expenditure for 2022.

And after we looked over everything, it was a non-residential building.

- Okay.

- And after we looked over everything, the expenditure, it qualified as improvement property.

- [AShira] Oh.

- Meaning that it qualifies for bonus depreciation.

- Okay.

- Now, they were thinking, you know, whether or not if they should do this expenditure in 2022 or in 2023.

And reason being is because there was, you know, there was a potential cashflow issue.

So I told him like, hey, you know, if you do it in 2022, the bonus depreciation rules are still gonna be 100%.

- Yes.

- If you do it in 2023, that's the first year where it goes down to 80%.

Meaning that, you know, 20% of that deduction or that expenditure, you're gonna have to capitalize it and take that over 39 years, which is no fun.

- Right.

- So, yeah.

So he went back to his partners, he went back to the management team and, you know, they decided that, you know, hey, we're gonna go ahead and just knock it out for 2022.

- Very nice.

- And, you know, that's all about just being proactive and having those open lines of communications with your client.

- Yeah, very nice.

Any other conversations recently you had to have with clients similar to that with the changes?

You know, 2023, no, '22 was different as it relates to taxes.

- Right.

- A lot of the pandemic relief credits went away.

I mean, we had the child tax credit went back to $2,000.

- You got it.

- We had so many different things that just changed.

So did you have to have conversations with clients?

And just in your industry, 'cause things are different based off of your clients.

- For sure.

- But did you have to have any, in 2023, any like, conversations with clients about pandemic credits, like kind of going away?

- Most definitely.

You know, like we said earlier, we just wanna keep those lines of communication open.

- Okay.

- And I feel like it's important to me to, you know, let them know like, hey, you know, this is not gonna be here next year.

- Yes.

- So, you know, we need to take advantage of it right now.

- Absolutely.

- It's just stuff like that.

So yes, 100%.

- And then having the conversation in June or July to give them time to process.

- Absolutely, 100%.

- How important is that?

- No surprises.

- Yeah.

- It's very important 'cause, you know, no surprises.

- Right.

- We wanna give them the absolute best service that we could possibly give them.

- Yeah, and if you give them enough time to process, take it back to their management team and, like the example you gave, they can make an effective decision.

- I 100% agree with you, AShira.

- I like that, I like that.

So what is the difference from tax planning and tax preparation?

- Okay, so tax preparation is pretty much gathering all the necessary documentation.

- Okay.

- You know, W-2s, K-1s, any 1099s, any schedules that your client may give you.

- Okay.

- Gathering all that necessary information and formulating it into a product that you and I know as a tax return.

- Definitely.

- Now, tax planning on the other hand, is taking that same methodology, but it's taking it a bit further.

You know, it's saying, hey, client, what can I do?

What can we do in order to get your tax liability down or get your cash flow as high as we can possibly get it?

'Cause want you to, you know, pay as less tax that you are 100% required to pay.

- I like that, okay.

That makes sense, that makes sense.

And when it comes to tax preparation- - Yes ma'am.

- that occurs annually, right?

- Absolutely.

- And tax planning, how often should that happen?

- Well, honestly, you know, like we said prior, it's all about just having those lines of communication open.

- Okay.

- You know, for some bigger clients, you know, maybe you need to see those quarterly financial statements, you know?

- Oh, okay.

- So, you know, you can see if they did something maybe out of the ordinary.

And if they did something out of the ordinary, maybe you can ask them like, hey, what does this expenditure relate to?

Hey, revenues have been X during Q1 and Q2.

Why are they so much higher in Q3?

- [AShira] Okay.

- And that way you can, you know, with the tax planning aspect of it, you could, you know, really, really hunker down and just, you know, figure out a way that within the confines of the tax code that you could get their tax liability down.

- Okay, I like that.

That makes sense, yeah.

So tax planning is continuous.

- Yes, always, absolutely.

- The conversation, it never stops.

- You got it.

- You're constantly wanting to keep the conversation, that line of communication open.

- I like that.

- Where tax planning can just happen annually.

- You got it, yep.

- Okay, okay.

- Absolutely.

- Just to make sure our audience really know, because I mean, a lot of people don't know.

I mean, hiring a CPA is a huge part of the business process.

- [Antonio] Absolutely.

- It's not easy, a lot of people don't even know kind of where to start.

- Agreed, I agree.

- So just letting them know these differences I think is very important.

- I agree, I agree.

- Thank you for that.

- For sure, for sure.

- So what are some events that can trigger a tax consequence?

- So honestly, AShira, honestly, a lot of our day-to-day decisions can, you know, trigger tax consequences.

- [AShira] Okay.

- You know, if we wanna get a new job, if you wanna get married, if you wanna have children, if you want to, you know, retire.

If you do retire, you know, are you required to take required minimum distributions at a certain age?

If you are, you know, maybe I should have some tax withheld from it because, you know, I don't know what my tax situation is gonna be.

- Okay, now let's stop 'cause that's very good.

- Okay.

- So if someone is going to retire, they have to step back and think about this is a new type of income that you've been saving up and contributing to this account basically your whole career.

- Exactly, exactly.

- But they have to stop, maybe talk to their CPA - Exactly.

- about withholding.

- Yep.

- You have to like plan for this new thing.

- Absolutely.

- So many different considerations that can go into it.

- Absolutely, which is why, like you said, tax planning should be proactive and it's continuous and it's very, very, very important.

- I like that.

- I 100% agree with you.

- Okay, so a young couple getting married, they also need to do- - Absolutely.

- tax planning or stop and consider it.

- Absolutely, they need to do the necessary tax planning and talking to the CPA too because, you know, once you get married, you know, the standard deduction, if you're taking the standard deduction, it changes, you know, once you're married filing joint or married filing separate, whatever the case may be.

Or, you know, if you're gonna buy a house and you don't necessarily meet the SALT cap, the $10,000 SALT cap.

- Yeah, okay.

- You're gonna have to pay real estate taxes.

And those real estate taxes, you know, they're part of the itemized deductions on Schedule A.

So, you know, we just really, really, really wanna keep the lines of communication open and be proactive and just, you know, just put all the cards on the table.

- Yeah.

- And just make sure that we're making sure that our clients are in the absolute best possible position that we can get them in.

- Okay, so staying on line with the triggering tax consequences.

- Okay.

- Buying or selling a business.

- Yep.

- That can do it too.

- Absolutely.

- You need to stop, talk to your- - Absolutely - accountant about different factors that goes into it.

- [Antonio] Absolutely.

- Okay.

- You're 100% correct, 'cause, you know, there are all different types of gains and you know, under, not to get too, too, too technical, but business gains are considered 1231 gains.

and under that it's 1245 property and 1250 property.

And with that comes unrecaptured depreciation analysis and all that kind of stuff like that.

So yeah, 100%.

- Okay.

- All that stuff that you're saying is very, very, very important and what you need to, or the client needs to, you know, discuss with their CPA and, you know, just so we don't miss anything.

- Okay.

So why put off until tax time what you can handle today?

- [Antonio] Exactly.

- As we approach midyear, it's never too early to consider tax planning strategies for the year that may help lower your tax bill.

CPA Antonio is here to share with us midyear tax planning tips.

So what are some basic tax planning strategies for individuals?

- Retirement.

- Okay.

- Maybe contributing to a Roth IRA or a traditional IRA or, you know, just keeping that line of communication open with their client.

You know, what kind of health plan are you in?

Are you in a high deductible plan?

Because if you are, you know, maybe you can contribute to an SHA.

- Okay, so what is it?

HSA.

- An HSA is a health savings account and you can put money into it if you're in a high deductible tax.

- Okay.

- If you're in a high deductible health plan, you could put money into it and you can take the deduction on your tax return.

- Very nice, okay.

What are some other strategies that individuals can take?

- If you have, you know, any types of dependents.

Do you have kids, do you have younger folk that you take care of?

You know, maybe consider an Ohio 529 plan.

- [AShira] Ooh, I like that.

- Absolutely, maybe consider- - Yeah, I have a daughter, well, I have two daughters.

- Absolutely, absolutely.

- [AShira] Start very young - Absolutely 100%.

- Open up their 529 plan.

- Agreed.

- So we can take a deduction on our Ohio return.

- Agreed, agreed.

- Okay.

- Just for saving for your child's future.

- Very nice, I mean.

- Right, right.

- Win-win.

- It's a no-brainer, right?

- I'm building my child's future while earning a tax deduction.

- There you go, there very go.

- Very nice, okay.

- Which is why it's proactive like we talked about, which is why it's proactive.

- [AShira] Keeping that lines of communication.

- You got it, agreed.

- And then, thinking about what's triggering a tax consequence.

Right there, having a child.

- Exactly, exactly.

- Very nice, okay.

- I like that, I like that.

- You're really talking strategies, and I mean, these are everyday things that people don't necessarily think about- - Exactly, AShira.

- that could have a tax effect.

- I 100% agree with you.

- But having that communication with a CPA, an accountant, is very helpful.

- Agreed.

- Okay, so when it comes to taking that 529 deduction for your child- - Okay.

- On your Ohio return, so is that like per child?

How much can I do in Ohio?

- Yes, so it's per child.

- Okay.

- And excuse me if I'm butchering this.

I can't remember the exact amount every year.

- I think it's about 4,000.

- You know what?

I think you're right.

I think you're right, I think it's around 4,000 every year.

But yeah, and then let's say you contribute 10,000.

- Yeah, okay.

- You know, that additional money that you contributed this year, it carries forward and it becomes a deduction of the subsequent year - Very nice.

- or subsequent years.

- So you're telling me that the $10,000 I possibly contribute in 2023- - Okay.

- 4,000 is deductible in 2023.

- Right.

- But I can roll over the additional $6,000?

- 100%.

- And pick it up in the future?

- And pick it up in the future year.

- See, this is why tax planning is so important.

- Agree, 100% agree.

- Very nice.

Okay, thanks for that.

- Sure.

- What are some other ways I can like reduce my income, like as an individual?

Like what other deductions could I possibly take?

- You know, maybe you can contribute to your favorite charity.

- Okay.

- I mean, 'cause that's a win-win.

- Yeah.

- You know, you're being philanthropic, all the while reducing your tax bill.

- Okay.

- If you can itemize.

- Yes, itemized deduction because you can take the standard deduction or the itemized deduction.

- You got it.

- Okay, so what are some other itemized deductions that people can take if they go that route?

- Right, absolutely.

If you buy a home, you know, we talked about buying a home prior.

The interest, the home mortgage interest.

that's an itemized deduction that you can take on Schedule A.

Medical expenses.

Medical expenses, as long as they're over 7.5% of your adjusted gross income, your AGI.

- [AShira] Okay, so going to the doctor.

- Going to the doctor.

- [AShira] Paying out of pocket.

- Going to the doctor, paying out of pocket.

- Those expenses, deduct on my Schedule A.

- That could potentially be a tax deduction.

So go to the doctor (laughs).

- Get that checkup.

- Get that checkup.

- Don't avoid it.

- Don't avoid it.

- So what about, I mean, medical doctor, the dentist.

- Yep, medical doctor, dentist.

- Okay.

- Yep.

- Very nice.

- As long as it's qualified health professionals.

- [AShira] Okay.

- 100%, absolutely.

- Okay, what are some other maybe itemized deductions?

You mentioned earlier SALT.

- [Antonio] Yes ma'am.

- What is that?

- So SALT is state and local tax.

- Okay, okay.

- So if you're a W-2 employee, and of course if you live in the state of Ohio, we have so many municipalities.

As a matter of fact, who doesn't love RITA, right?

- Oh my God.

(Antonio laughs) So you're talking, we got our federal tax with IRS, we got we our state taxes with Ohio if you're an Ohio resident, then we have our local tax- - Exactly.

- Where you can pay taxes to the municipality that you live in.

- Exactly.

- Okay.

- And with the state taxes and the municipality taxes, you know, how much your employer is withholding, that could potentially be a deduction on Schedule A.

- Okay.

- But the SALT cap right now is $10,000.

- $10,000, so if I pay taxes towards my state taxes, my city taxes, my real estate taxes, they're all, no matter what it is, - No matter what it is.

- the cap is at 10,000.

- The cap is at $10,000.

- Okay, okay.

- [Antonio] The cap is at $10,000.

- Now, do they roll over anything or it's just?

- Unfortunately, that one doesn't roll over.

- Okay, darn.

I figured I should try, I should try.

- Unfortunately that one is year to year.

- Okay, okay, thanks for that.

- For sure, absolutely.

- Okay.

- Absolutely.

- What about education?

Sending your kids off to school?

- Yeah.

- Like college, I should say.

- Absolutely.

When it comes to that, there are different tax credits.

You have the lifetime learning credit.

- Okay.

- You know what?

I'm drawing the blank on the other one, but also if you have a student loan interest and if your income- - Oh, okay.

- And if your income levels are at a certain level, you can take that student loan interest as a tax deduction.

- Very nice tip, 'cause student loans are on pause right now.

They should be removing the pause soon.

I'm seeing a lot of different news outlet talks about that.

- [Antonio] For sure, for sure.

- So people will start paying on their student loans again and able to deduct these student loan interests on their taxes.

- You got it, absolutely.

- And that's on the Schedule A.

No no, no, that is not on the Schedule A.

- Right, that's on Schedule 1 now.

- Right, 'cause we were talking about Schedule A, so just moving over to- - You got it, 100%.

- Okay, awesome.

- It's an above the line deduction.

- Yes, I like that.

Just distinguishing the two 'cause you have so many different credits, you have so many deductions.

But initially we're talking about itemized deductions, Schedule A.

Now we just moved over a little bit.

- You got it, 100% - Okay.

I like that.

Let's see.

So switching over to tax planning for investments.

- Okay.

- So you can have interests, investments, you can invest in different things.

- Absolutely.

- You can invest in, like real estate.

- Absolutely.

- Invest in the stock market.

- [Antonio] Absolutely.

- People invest in crypto now.

It's just so many different things, so what kind of things should we be thinking about if we're investing in investment or doing tax planning for investing?

- Right, so we should most definitely think of, you know, short-term investments are taxed differently than long-term investments.

- [AShira] Okay, let's talk about that.

- You get a more favorable rate if you have long-term investments.

- Okay.

- You know, let's say we bought a share of whatever type of security.

- Okay.

- And whatever type of stock.

And let's say that we held it for over a year.

If we hold it for over a year, then it's deemed to be a long term investment.

- Okay, so all I need to do is hold it for 366 days.

- Exactly, there you go.

There you go, there you go.

- Okay and that changes to a long term.

- And it's gonna be taxed at a more favorable rate.

As a matter of fact, you know, I believe the highest capital gain rate is 20%, which is much lower than the highest individual income tax rate, you know what I mean?

- Okay, okay.

- Yeah, for sure.

So all that is, you know, super, super, super important.

- Any the other things we should consider when tax planning for our investments?

- Yeah.

You know, maybe tax loss harvesting.

- Okay.

- Maybe you share or maybe you sell a share of your favorite security.

You know, maybe your broker tells you that, hey, hey, AShira, this security, this stock, this is as good as it gonna get.

- [AShira] Yeah.

- Let's just go ahead and sell.

Let's just go ahead and sell it, let's take these gains.

We had it for over year, we had it for over the 365 (laughs).

It's gonna be taxed at a capital gain rate, which is more favorable.

- Okay.

- And he also says, you know what?

This security right here, this one is not doing so well and I don't foresee this one, you know, rising up any more.

So let's just, let's cut the losses and let's just offset the capital gain with the one security with the capital loss of the other security.

- And that's key is you offset.

- Absolutely.

- Your losses offsets your gains.

- Your losses offset your gains, you got it.

- Very nice, okay.

Okay, so mutual funds.

Mutual funds, people can invest in different mutual funds.

Mutual funds.

Some mutual funds can produce tax exempt interest, correct?

- Absolutely.

- Meaning that you're not taxed at the federal level.

- Absolutely, absolutely.

- Okay, okay.

Just thinking about the different investments I'm doing.

- Yeah, no, no, no.

For sure, for sure.

- There's so many.

- There's so many, - Yeah, yeah.

- Right, there's so many.

- So let's switch gears a little.

So tax planning strategies for small businesses.

- Tax planning strategies for small businesses.

As we talked about prior with the client who I, you know, with the capital expenditure.

- Yes.

- Any fixed assets?

Are you gonna buy a fixed asset?

Are you thinking about buying that piece of machinery, that piece of equipment?

- Yeah, what are the different fixed assets that they can purchase for their business, or what's considered a fixed asset?

- A fixed asset is an asset that you're gonna use in your trade or business.

- Okay.

- So if you're a restaurant, you know, and you need that new stove, that new stove could be, that new stove is a fixed asset.

If you're a real estate professional, that strip mall, that building, that's a fixed asset.

- Okay.

- If you're gonna do any types of improvements to it, you know, those are fixed assets.

- Very nice, okay.

So we can purchase fixed assets at the business level.

What about with our income?

What kind of things can I do to kind of plan for, like different income strategies?

- Different income strategies.

- For businesses?

Like, should I pick it up this year?

Should I like, kind of defer it?

Like, what options do I have?

- Right, right, for sure.

And, you know, that's one of the reasons why you and I were saying that, you know, the lines of communication needs to be open with you and your tax professional.

Because, yeah, like you said, you know, with some types of income you can actually defer it.

- Okay.

- You could actually defer it into the next year.

Same thing with expenses, just based on the revenue recognition rules.

And the same thing with expenses.

Another example, one of my clients, they were having a really, really, really down year and he was thinking about, you know, taking a certain type of expenditure.

And he was anticipating that the next year, the subsequent year was gonna be better.

So we just talked and I said, you know what?

Maybe you should hold off if we're anticipating that the next year is gonna be better than this year.

Let's hold that expense and let's take it the next year, so it's gonna, you know, reduce your taxable income next year since you're anticipating to have- - Having that conversation.

- Absolutely, absolutely.

- Looking at your client's financial statements, seeing where cash is, seeing what your revenue is.

- I agree with you, AShira.

- If you already have a loss, why pick up additional expenditures?

- I agree with you, AShira 100%.

- Kind moving that to next year.

- Yep, 100%.

- Okay, I like that.

- I agree with you.

- Okay.

So any other, like, tax planning advice you have as we wrap things up?

- Yeah.

You know, I don't wanna sound like a broken record, I don't wanna sound redundant, but keep those lines of communication open.

Be as transparent with your tax professional as you can possibly can be.

You know, find a reputable CPA.

You know, AShira, myself.

Find a reputable CPA.

One that knows what they're doing.

And just keep those lines of communication open.

- Okay, so should we make sure we, like, file on time?

Making those estimated payments, you talked about estimated payments.

- Absolutely.

Absolutely.

- Okay.

- Right, make sure you make the requisite estimated tax payments.

You know, like you said, you know.

- [AShira] Yeah.

- You wanna file on time , and not only do you wanna file on time, you wanna give your tax professional all your necessary documentation within a reasonable time because you wanna give, her or him the necessary time to do their tax analysis and get you in the best position that they could possibly get you in.

- Okay, well thank you, Anthony.

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