WELCOME TO DAVID K. RAYE, CPA, P.C.

davidraye-charlotte-cpa

The accounting firm of David K. Raye, CPA, P.C. is dedicated to excellent client service.  Founded in October, 1996, we have consistently provided exceptional assistance and advice in our client’s tax, financial and business affairs.  We have many loyal clients and would like to have the opportunity to serve your tax and accounting needs.

We want you to get the best financial and tax help possible. Explore our web site to discover the many ways we can serve you. If you have a question that is not addressed here, please contact us via the contact form located at the bottom of this page or by phone at (704) 887-5298

You’ll find that we can take much of the worry and stress out of your financial life. We are ready to assist you in —

  • keeping your taxes as low as the law allows
  • building your personal wealth through sound tax and financial planning
  • designing recordkeeping and accounting systems that help your business function efficiently and profitably
  • helping you solve your business problems
  • preserving your estate for your intended heirs

SERVICES

Professional Tax Return Preparation

Today’s tax laws are so complicated that unless your financial affairs are extremely simple, chances are you will benefit from at least occasional help from a tax professional. It is too easy to overlook deductions and credits to which you are entitled if you prepare only one return a year. Even the use of computer software is no substitute for the assistance of a seasoned tax preparer.

We can prepare returns for a wide range of entities including individuals, corporations, partnerships, LLC’s, estates, trusts and non-profit organizations.

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Business Solutions

Business problems and their solutions are as varied as the kinds of businesses in existence. There are some issues, however, that every business faces. Whatever your business concerns, we can provide the help you need.

Whether you are starting a business or operating an on-going concern, we can help you select the proper organizational structure and help you secure adequate financing. We will work with you and your banker, lawyer, insurance agent, and other advisers to solve your business problems.

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Accounting Services

We can help you design an accounting system that is right for your business so that you will always have current and relevant financial information at your fingertips.

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TAX RESOURCES

 

Tax Organizer

Organize your tax information with our free Tax Organizer.
After you schedule your tax appointment, please print and fill out the organizer. Bring the completed organizer with you to your appointment.

OPEN TAX ORGANIZER NOW

Download Adobe Reader

You will need the free Adobe Reader to view and print the Tax Organizer. If you do not have Adobe Reader installed on your computer, you may download it without charge from the Adobe website.

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Calculators

You can get rough answers to your financial questions by using the following calculators and making a few estimates on your part. If we can be of assistance or answer questions for you, please call us.

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Track Your Tax Refund


TESTIMONIALS

  • I’ve worked with David since 2000. Over the last 16 years, he’s taken care of all my business tax needs and personal tax returns. He helped me during the growth and sale of my firm and is taking care of my newest business ventures. I appreciate the extra care he gives his clients and his ability to make complex tax issues simpler for me. I’d recommend him to anyone needing help with their taxes

    – Linda Bready

    Client
  • David has been our CPA for both our business and personal accounts for 19 years.  David is always detail oriented in his work and always delivers the finished product as promised.  Over the past 19 years of working with us, I am constantly impressed with his work ethic and expertise in preparing our different types of tax returns.  I would highly recommend David to any business or individual who is looking for a CPA.

    – J. Dean Lackey, RPh, MBA, Med Data Research, Inc.

    Client

TAX BLOG

A trust is a legal entity in which someone acting as a fiduciary holds property for the benefit of another.  Trusts are used extensively in the areas of financial and wealth management.  Most people think of trusts as something only used by the “super rich” but individuals and families of modest means would find them useful in their planning.  This post will explore some of the practical uses of trusts and discuss the taxation of trusts.

Purpose of trusts

Trusts can be used for various purposes including the following:

  • Protect property for beneficiaries
  • Provide income for minor children or others incapable of handling money
  • Control the distribution of assets after the grantor’s death
  • Save on estate taxes by removing appreciating assets from the grantor’s estate
  • Charitable purposes

Taxation of trusts

A trust is taxed much like an individual.  Trust income such as interest, dividends and capital gains must be reported on an income tax return (Form 1041).  However, there are some important differences in the taxation of trusts as compared to an individual.

  • Trusts do not get a standard deduction and their exemption amounts are much lower than individuals.
  • The rate brackets of a trust are compressed so that a trust may pay higher taxes than an individual. For example, the top individual tax rate of 39.6% starts at an income of only $12,500 for trusts vs. $ 415,050 for a single individual or $ 466,950 for a married couple.

The high rate of taxation caused by the compressed tax rate brackets can be avoided by distributing income to the beneficiaries.  In that case, the income would be taxed to the individual beneficiaries instead of to the trust.  This income would be reported to the beneficiaries on a Schedule K-1.

As you can see, it is usually not wise to accumulate income within a trust because of the high tax rates on retained income.  This income should instead be distributed to individuals who will usually be in lower brackets.  This distribution can be a good method to shift income to minor children who will typically be taxed at lower rates but watch out for the kiddie tax rules which can limit this technique (more about the kiddie tax rules in a future post!).

David K. Raye, CPA, P.C.

704-887-5298

www.davidrayecpa.com

*The information in this blog post is general in nature and not intended as specific advice.  Please consult a tax advisor to see how this information applies to your specific situation. 

A monumental transfer of funds totaling hundreds of billions of dollars is now underway

according to a recent article in the Wall Street Journal (Jan. 17, 2017 by Vipal Monga and Sarah Krouse).  The IRS requires that taxpayers must begin withdrawing funds from IRA and other tax sheltered accounts when they reach age 70 ½.  The first wave of Boomers, generally defined as those born between 1946 and 1964, turned 70 ½ last summer and must therefore begin required minimum distributions (RMD) starting in 2017.

The article states that “Boomers hold roughly $ 10 trillion in tax-deferred savings accounts, according to an estimate by Edward Shane, a managing director at Bank of New York Mellon Corp.”  These funds will be taxable in the year withdrawn resulting in billions of dollars of tax revenue to the U.S. Treasury for the next several years.

The first distribution must take place by April 1 of the year following the year the taxpayer reaches age 70 ½.  They must be taken by December 31 each year thereafter.  The RMD is calculated based on the individual’s life expectancy determined from IRS tables.   The penalty for not taking RMDs is 50% of the funds required to be taken out so be sure that this is not missed.  A special rule allows someone to contribute up to $ 100,000 of IRA funds to charity.  These funds are not included in taxable income or allowed as a charitable deduction and they would count towards your RMD for that year.

As this huge shift of resources takes place, it is important for baby boomers to include an allowance for future tax liabilities when calculating their net worth and planning for retirement.  Otherwise, the tax bill will come as an unwelcome surprise.

 

David K. Raye, CPA, P.C.

704-887-5298

www.davidrayecpa.com

 

*The information in this blog post is general in nature and not intended as specific advice.  Please consult a tax advisor to see how this information applies to your specific situation. 

Another method of donating to charity in a tax favored way is the donor-advised fund.  A donor-advised fund qualifies as a tax-exempt charity and therefore money can be placed in these accounts for an immediate income tax deduction.

These funds can grow tax free and then be directed to specific charities at a later date.

Donor-advised funds have been around since the 1930’s and have been established by community foundations and other non-profit organizations since that time.  Today these funds are growing in popularity and are now offered by financial institutions and all the major money management firms such as Vanguard, Fidelity and Charles Schwab to name a few.

Now for some caveats:  In exchange for the tax deduction, the donor loses control of these funds once the donor-advised fund is established.  In other words, the choice to contribute to these funds is irrevocable.  You or other co-advisors such as family members may still recommend grants (this is the “donor-advised” part).  The fund manager will generally comply with the owner’s advice but they are not legally obligated to do so.  Fees and costs are usually charged by the fund manager based on the amount of assets in the account.

In summary, donor-advised funds provide many benefits:

  • Immediate tax deduction
  • Tax-free growth
  • No annual payout requirements
  • No time restrictions for making donations
  • Simplicity of operation and professionally managed accounts

A donor-advised fund is an excellent vehicle for conducting your philanthropic goals while securing a tax deduction for yourself.  It is a lower cost and much simpler alternative to establishing a private foundation and an easy and flexible way to make charitable grants to the organizations that you want to support.

 

David K. Raye, CPA, P.C.

704-887-5298

www.davidrayecpa.com

 

*The information in this blog post is general in nature and not intended as specific advice.  Please consult a tax advisor to see how this information applies to your specific situation. 


Contact

13850 Ballantyne Corporate Place, Ste. 500 Charlotte, NC 28277 Ph:(704) 887-5298

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