Partnership Tax Compliance (First-Year Trader Client) – Partial Payment & Minimum Price

Please only purchase this first-year tax compliance service if we invite you to.

Price: $1,795.00

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Our tax compliance service includes

  • Planning and preparation of your partnership federal and state tax returns.
  • Assessment of trader tax status (TTS): If the partnership qualifies for TTS, we can use business expense treatment on Form 1065. TTS does not require an election, whereas Section 475 MTM does.
  • If the partnership is not eligible for TTS, it will pass through investment expense treatment to owners. The 2017 Tax Cuts and Jobs Act suspended investment expenses and all other miscellaneous itemized deductions for individuals.
  • In a tax return footnote, we explain trader tax law, how the partnership qualifies for TTS, tax elections like Sections 475 MTM, the tax treatment on financial products, and more. Avoiding IRS questions is vital.
  • If you traded securities, there would be complicated accounting for wash sale loss adjustments or Section 475 MTM accounting. Consider our trade accounting service in conjunction with our tax compliance service.
  • A timely-filed Section 475 MTM election by a new partnership was due within 75 days of inception. We provided the 475 election resolution in our entity formation service. 
  • Tax treatment for traders can be confusing, and we get it right, taking advantage of losses where possible and Section 1256 60/40 capital gains rates. Traders can depart from broker 1099-Bs where entitled, and we explain it in the tax return footnotes.
  • A partnership may provide for "unreimbursed partnership expenses" (UPE) in the partnership agreement. UPE includes home-office deductions.
  • The 20% deduction on qualified business income: QBI includes 475 income net of TTS expenses; it excludes capital gains.
  • "Special allocations," including profit allocations (carried interest), are allowed on partnership tax returns.
  • Consider the SALT cap workaround strategy to pay state taxes on the entity level before year-end. 
  • For more information, visit the tax compliance service area of our Website.

Special considerations

Choose the partnership tax compliance service if you had a trading company organized as a multi-member LLC, general partnership, or LP (limited partnership) filing as a partnership.

LLC/partnerships and S-Corps should consider the SALT cap workaround strategy, which about 20 states have enacted to date. See the list in our recent blog posts. Consider making pass-through entity (PTE) payments on the entity level before year-end to avoid the SALT cap on your return.

We will focus on the 2017 Tax Cuts and Jobs Act, especially the new 20% deduction on qualified business income (QBI) in pass-through entities. QBI might include Section 475 ordinary income, whereas the law and regs exclude capital gains from QBI. There are income phase-outs for owners of service businesses, including a TTS trading company, and wage and property limitations for all types of pass-through entities. It's wise to do year-end tax planning to maximize the 20% QBI deduction, which owners deduct on their tax returns. 

The IRS does not allow a trading or investment partnership to have "guaranteed payments," which partnerships compensate partners for services rendered.  If you want employee benefits, including health insurance and a retirement plan, consider having your partnership elect S-Corp tax status by Mar. 15 of the current tax year. An S-Corp creates earned income with officer compensation. TTS companies need officer compensation if they are in the phase-out range for the QBI deduction.

Trading income is not self-employment income (SEI) on a partnership tax return. Exception Section 1402(i): Full membership on a futures exchange, trading Section 1256 contracts on that exchange, is SEI.

After purchase, our administration team will follow up with you by email to commence the tax compliance process. See how our virtual process works efficiently.

Kindly expect a balance due on our fees when we complete the tax compliance engagement. Would you please read Price & Billing Policies for more information?

If you have any questions, please get in touch with us.

Thank you for trusting our firm to help you. We've earned trust from traders since 1983.

Sincerely,

Robert A. Green, CPA
Darren L. Neuschwander, CPA
Adam W. Manning, CPA
Members, Green, Neuschwander & Manning, LLC