Discussion:Wealthy Clients

- neither are self employed nor do they own any businesses - they own their primary resident and a vacation home - they have no kids - they make large charitable contributions - they max out on their 401K or 403B plans - mileage or equipment does not apply

In summary, they do all they can to minimize their tax burden, but their effective tax rate still puts them on the top of their income level.

Anybody have any other out of the box suggestions on what else this (I would not call them wealthy as they live in NY) well off couple can do that they are not doing already?

Any other places or people who can help could be helpful as well. Thanks.

Review Sec 6694(b).

Seriously, CrowCPA is right; sources of income can mean everything, but from your description, it sounds like they are classic 'dinks' and the one thing you do not mention is if they live in the City. Makes a big difference in taxes, but depending where the work is, commuting costs can eat up the tax savings. Gazoo makes a good point too in that they are employed. They could be like one married dink couple I know where wife worked for Bear Stearns!

when they earn income in that level, on a W2 mainly, there is very little you can do without risk. AMT, passive loss limits all kick in.

I try to counsel them in tax efficient funds, understand their liability and how it works, etc...

Foe most, a CRT is not appealing.

I bet their tax return is quite simple so all this talk about "get a good tax pro" is self serving. I mean NO disrespect to anyone but the sense is this return has 6 or 7 input doc's.

I bet their situation could be a question on a college tax exam. Not all that difficult.

Wasn't Madoff's Tax Man near NYC?

His Auditors for Madoff Investment Securities, Inc. (Liebowitz and Horowitz CPAs) are located in a strip center store front

25-miles outside of NYC near White Plains, NY. The former namesake is long time retired to Florida, Horowitz is a New York Licensed CPA - he was issuing the "Audit Opinion" for Madoff Investments Securities, Inc. - and denying to the AICPA that he his firm was doing any audits. The firm was not a member of the Public Companies Oversight Accounting Board, PCOAB - that board qualifies CPAs who have sufficient credentials to practice before the SEC, their website has a list of Members.

Incidentally, many on that list are sole proprietors - I know several skilled SEC CPAs who practice alone. The size of the firm, in my view, is irrelevant - just look at Arthur Andersen (my old firm) how many they had before Enron took them down.

I respectfully disagree. I worked at PW from 85 to 90 and audited banks and fund companies. Many private funds. The complexity of reporting today is well beyond the expertise of even a 10 person firm.

The collars, straddles, off balance sheet risk is so complex, even SEC specialists can't figure it out many times.

Imagine doing a 941 on Monday and an SEC audit the rest of the week? I personally don't ssee it.

The firm mentioned, in my view, was given a FS to sign. That is all they did. They audited nothing. It is the utmost in fraud. They wouldn't know how to audit a broker dealer, review focus reports, test unlisted securities for value etc.. compute unrealized gains,losses, understand concentrations of risk on global securities etc... look at the disclosure pages alone, incredible.

At a top ten firm, in my view, that audit would be done by at least 10 people for at least a month and cost over a $million. Would absolutely be reviewed by 2 partners as well.