Frank P. Skinner, CPA, specializes in preparing income tax returns for individuals and small businesses. Based in Encinitas, California, he serves a diverse clientele located primarily in the greater San Diego area. He also provides tax services for clients located in other states, as well as ones in Canada
Frank began his CPA practice, located in Encinitas, in 2001. Since then, he has worked with hundreds of clients, specializing in helping them with their business and personal taxes. His clients come from many different walks of life, and are engaged in a wide variety of occupations. These include doctors, lawyers, small business owners, real estate agents, investors, contractors, nurses, and many others. Frank prides himself on working with his clients to produce the lowest tax liability legally possible when preparing their tax returns.
Every taxpayer is unique. Frank endeavors to establish a personal relationship with each client, which enables him to provide an appropriate level of service. He takes pride in his work; while not losing sight of the big picture, he takes care to see that none of the details are overlooked.
The IRS requires that all income must be reported and taxed. The good news is that there are many deductions and credits available that may be utilized to help reduce the amount of a taxpayer’s liability. Frank will look for every tax break that might be available to help a client keep more of his own money.
Frank’s fees are reasonable and competitive. His charge for preparing a tax return is based strictly and solely upon the amount of work required. He never charges a higher fee to a client “because he can afford it.” His basic fee for preparing a personal tax return is $500 – it goes up from there only if more work is involved. He is happy to discuss his fees with any prospective client at any time, and can provide an estimate before preparing a return if a client so desires. In addition, he is happy to provide an initial consultation, either by telephone or by setting up an in-person appointment.
Appointments are available throughout the main tax filing season (January - April). If more time is needed to gather all of the information, Frank can file an extension with the IRS, allowing more time for the return to be prepared and filed. In some cases, it is more convenient for clients to deal with him by email or "snail mail," particularly if they are from outside the greater San Diego area. Frank has the flexibility to work with these clients on this basis. Consultations are also available for clients who would like to consider using his services, or who have a particular issue to discuss. This may be done in person or over the phone.
Frank P. Skinner has been a CPA since 1979. He received his Bachelor of Science degree in Business Administration (Accounting) in 1976 from California State University, Sacramento. That same year, he passed the entire CPA exam the first time he took it. He went on to obtain his Master of Science degree in Business Administration (Accounting) from Sacramento State in 1980.
Frank has a wide variety of work experience, having worked in public accounting and in private industry. His career has taken him from California to Washington State, and to British Columbia. In 2001 he returned to California, where he established his own accounting practice in Encinitas, north of San Diego.
Frank P. Skinner also has experience in dealing with Canadian income taxes for individuals in all provinces except Quebec. He lived and worked in Vancouver for twenty years, where he became familiar with taxes north of the border. His specialty was dealing with clients who were required to file taxes in both the United States and Canada; thus, he has the expertise to deal with various situations in which citizens and residents of one country are required to file and pay taxes in the other one.
Frank enjoys a variety of personal interests outside of the office. He loves music, and is a big fan of the Beatles. Whenever a new client comes into his office for the first time, he likes to play their song “Taxman.” He also enjoys writing, traveling, coin collecting, science fiction, and history and politics. He has written a book called "Setting the Record Straight: A Complete History of the Alternate States of America", which is a satirical look at US history. The book has been accepted for publication, and Frank expects it to be available later in 2019.
If you have a small business, it may pay for you to incorporate. Doing business as an S Corporation allows a business owner more flexibility with regard to claiming expenses, and provides opportunities to minimize his tax liability. Ask Frank about how incorporating your business might save you money on your taxes.
If you are older than 50, you may be able to make an additional contribution to your retirement plan. The additional amount that you may put into a Traditional or Roth IRA is $1,000. Additional amounts may also be contributed to 401K and similar plans.
If you plan to continue working, you may want to forego taking Social Security benefits before reaching your full retirement age. If you take your benefits before reaching this age, you may be penalized for any earned income you receive in excess of a certain amount.
If you and your spouse are separated, but not divorced, you may be able to file your tax return using the Head of Household filing status, which is more advantageous than filing as Married and Separate. You must be providing a home for a dependant for more than half the year in order to do so.
If you take an early withdrawal from a retirement plan, you may be able to avoid the early withdrawal penalty, depending upon what you do with the funds withdrawn. Ask Frank about what qualifies for this before you make the withdrawal.
Purchasing, holding, and renting out real estate is the one instance in which forming a Limited Liability Company is better than incorporating. An LLC provides more flexibility in transferring property in and out without tax consequences than does a corporation.
If you plan to sell investment real estate that has greatly appreciated in value since you purchased it and plan to turn around and buy another investment property, you may want to structure it as a Section 1031 Exchange. As long as you put at least 100% of the proceeds from the sale of the old property into the new one, the tax on the capital gain will be deferred.
If you purchase a vehicle or other machinery and equipment for your business, it may be to your advantage to write off the entire cost under Section 179 in lieu of taking depreciation over a number of years. This applies to corporations, partnerships, and LLCs, as well as sole proprietorships.
If you own any bank accounts or other financial assets located outside the United States, you may be subject to additional filing requirements under the Foreign Account Tax Compliance Act (FATCA). Penalties for failing to do so can be quite severe, so you may want to ask Frank if this might apply to your situation.
If you are planning to make a large charitable donation and need to sell an appreciated capital asset to raise the funds to do so, you might be better off donating the asset itself. By doing so, you would avoid paying tax on the gain while getting a deduction for the full appreciated value of the property donated.
The Tax Cuts and Jobs Act, which went into effect for 2018, eliminated previously-available deductions for moving expenses (except for active duty military personnel) and employee business expenses. However, California still allows these deductions for state tax purposes (and your state may still do so as well). Thus, it would still be advisable for you to keep track of these expenses.
The Tax Cuts and Jobs Act reduced the amount of mortgage debit for which interest may be deducted as an itemized deduction from $1 million to $750,000. However, previously-existing mortgages have been grandfathered in, so that the $1 million ceiling still applies to these cases. Please be aware, however, that interest paid on home equity lines of credit may no longer be deducted at all, unless the money was borrowed to substantially improve your home.
1. I’ve always done my own tax return in the past. Why should I hire a CPA to do it for me?
Tax law is constantly changing. Every time Congress acts to “simplify” tax law, it becomes more complex. A CPA can help you sort through it all and find deductions you might have missed doing your own return. In addition, he can offer advice to help you plan your finances in such a way as to reduce your tax liability.
2. How much do you charge?
My fees are based on the amount of work that goes into preparing your tax return. The basic fee for an individual return is $550, and $750 for a business return (partnership, LLC, or corporate). If your return is unusually complex, or an inordinate amount of time is needed to prepare it, your fee will be somewhat more. At no time do I ever charge a client based on the amount of their income or the size of their refund or balance owing.
3. I live in Idaho…or Arkansas…or South Carolina. Can you help me with my taxes?
Yes, I can. Although I am naturally most familiar with California, I have the resources available to help me prepare out of state returns. I can also help clients who need to file in more than one state.
4. Do you do bookkeeping?
Yes, I do. In most cases, I can easily do your bookkeeping for you in-house. Of course, some clients already have their own bookkeepers, and I can work with them as well.
5. Do you do payroll taxes?
Not in-house. I refer all payroll work to a payroll service, as they tend to be more geared toward efficiently and affordably providing this specialized service. I have a contact person I can refer you to for this service.
6. When do I have to pay for your services?
When your tax return has been completed, I will include a bill for my services with your tax return package. It is due and payable upon delivery of your return. I generally expect to be paid within thirty days of delivery.
7. What should I do if I can’t pay what I owe in taxes?
File your return anyway. The IRS imposes a stiff penalty for late filing, so don’t put off doing so. If you can’t pay, the IRS will be willing to work with you to set up a payment plan.
8. I haven’t filed a tax return for several years. What do I do?
File all past returns as soon as possible. I am able to assist clients in preparing past years’ tax returns, as well as the current year.
9. I can buy a copy of Turbotax for less than $50. Why should I pay you $500?
No matter how good it is, no tax software is able to effectively ascertain a taxpayer’s unique situation. If a client doesn’t even know that a deduction exists, he won’t be able to enter the information into any tax program, no matter how sophisticated it might be. In addition, the software won’t be able to advise you what to do when you receive a letter from the IRS.
10. Can I get away without paying my taxes?
The short answer is No. If you refuse to file your return and pay what you owe, you run the risk of being penalized, or even criminally prosecuted.
11. What do I do if I get audited?
If you are my client, I will assist you in preparing for the audit, and will represent you if you so desire. I do charge an extra fee for this service.
12. What happens if I live in California, but have income from another state?
Usually, the income is first taxable to the state where it originates. In most cases, your home state will allow an “other state” tax credit for tax you pay there to alleviate the double taxation that would otherwise apply.
13. What types of income are tax free?
Welfare benefits, worker’s compensation payments, state and local government bond interest, certain disability pensions, and combat pay for military personnel. At least fifteen percent of your Social Security benefit is also free of tax. In addition, only investment income is taxed - you are not taxed on the portion of your proceeds that represents your initial investment.
14. What types of income are taxable?
Pretty much any type of compensation you receive for performing services or selling products. In addition, you are required to report earnings from almost any type of investment. You should be aware that different states have different definitions of what constitutes taxable income.
15. My home just got foreclosed. Are there any income tax consequences?
A foreclosure is considered a disposition of property, and the normal rules for selling a personal residence apply. If you qualify, up to $250,000 of capital gain ($500,000 for married couples filing jointly) is excluded. A loss from selling a personal residence is not deductible. If all or any portion of the mortgage is forgiven, it would normally constitute taxable income, but if it is your personal residence, the tax may be waived.
16. I am a citizen of the United States working and living in a foreign country. Do I need to file a return?
Yes. U.S. citizens and lawful permanent residents living overseas must file, even if they have no income from U.S. sources. They must report their worldwide income using the same rules as for domestic source earnings. You may elect to exclude all or a portion of your foreign EARNED income from U.S. tax if you meet the criteria for doing so. This election must be made on a properly filed return – it is not automatic.
17. What is the difference between a traditional and a Roth IRA?
You get to deduct your traditional IRA contributions when you make them, but all distributions become taxable when taken, even when you retire. A Roth IRA is just the opposite – you don’t deduct your contributions, but when you retire and start drawing on it, all distributions are tax-free.
18. Where is my refund?
You can go to the IRS website (www.irs.gov) and find out by clicking the “Check on Your Refund” link on their home page. Be ready to provide your Social Security number, filing status, and exact dollar amount of your refund. You will need to wait 72 hours after your return is electronically filed and received, or four weeks after you mailed in a paper return to utilize this service.
19. Why don’t you do taxes for people in Quebec?
Residents of most provinces and territories of Canada file their federal and provincial taxes together on the same form, attaching a schedule for their particular province of residence. Quebec has its own provincial tax system, which I am not familiar with. Also, Canadian taxpayers file their returns for the province where they are resident on December 31, as if they had lived there for the entire year. Thus, if you lived in Quebec at the beginning of the year, but established residence in another province before December 31, I will be able to help you with your taxes.
20. Somebody told me I should incorporate in Nevada (or Delaware) so that I won’t have to pay tax to California (or some other high-tax state). It sounds too good to be true.
It is. A foreign (i.e., out of state) corporation doing business in, say, California, is required to register with the Secretary of State and file a California return. It will still be subject to any filing requirement in the state of incorporation as well. You might as well keep it simple by just incorporating in the state where you live. The only exception to this is if you are doing business exclusively in another state from the one where you live, or if you are forming an entity to hold and lease real estate located in the other state.
21. I own my own business. Should I incorporate?
It depends on your situation. There are definite tax savings to be had from running your business as a corporation if it makes more than a nominal profit. If you are or become a client, I can provide a consultation to discuss your particular situation.
22. I read somewhere that the notorious Al Capone went to prison for, of all things, tax evasion. How did that happen?
As it turns out, the Feds were never able to convict Capone of racketeering, bootlegging, or murder. The only crime they were able to make stick was income tax evasion. Capone’s biggest mistake was to not report and pay tax on all of the income he made from his activities. Income earned illegally is still considered to be income by the IRS, and is fully taxable.
23. I keep hearing people claim that income tax is actually illegal, and that the government has no authority to impose it, or that it is really voluntary, or that the sixteenth amendment was not properly ratified, etc. Some practitioners claim that they can get you out of having to pay. Is this true?
No! People have been trying for years to file frivolous claims about this, and the courts have consistently shut them down. The federal income tax has been legal and constitutional since 1913. The sixteenth amendment was properly passed and ratified; therefore, Congress is fully empowered to impose tax on income.
24. What is the difference between tax evasion and tax avoidance?
Tax Avoidance is defined as the practice of using every LEGAL means to reduce or eliminate your income tax liability. As your CPA, I can help you to do this. Tax Evasion, on the other hand, is defined as going beyond this and refusing to pay tax that you are legally obligated to pay. This includes such practices as omitting or underreporting your income, taking phony deductions or exemptions, and simply refusing to file a return. Tax evasion is a federal crime; committing it may land you in prison, so I don’t recommend it.
937 South Coast Hwy. 101, STE 202.
Encinitas, CA 92024