Frequently Asked Questions

You'll need W-2 forms, 1099 forms, mortgage interest statements, property tax records, and any other income or deduction documentation. For business owners, bring your profit & loss statement, business expense receipts, and vehicle mileage logs. We provide a detailed checklist during your initial consultation.

The standard deadline for individual tax returns (Form 1040) is April 15th. If you need more time, we can file an extension (Form 4868) which gives you until October 15th. However, any taxes owed are still due by April 15th.

The **standard deduction** is a fixed amount based on your filing status ($15,000 for single, $30,000 for married filing jointly in 2025). The **itemized deduction** is the total of your actual deductible expenses — such as mortgage interest, state and local taxes (capped at $10,000), charitable donations, and medical expenses exceeding 7.5% of AGI. You should choose whichever gives you the larger deduction. Most taxpayers benefit from the standard deduction, but those with significant mortgage interest or charitable giving may benefit from itemizing.

Yes. U.S. citizens and resident aliens must report **worldwide income**, including income earned in Korea — such as rental income from Korean property, interest from Korean bank accounts, Korean pension payments, or income from Korean employment. The U.S.-Korea Tax Treaty may help prevent double taxation, and you may be able to claim a **Foreign Tax Credit** (Form 1116) for taxes already paid to Korea. Additionally, if you have Korean financial accounts with an aggregate value exceeding $10,000, you must file an **FBAR** (FinCEN 114).

Yes. You can file **Form 4868** to get an automatic 6-month extension, pushing the filing deadline to **October 15**. However, an extension to file is **not** an extension to pay — you must still estimate and pay any taxes owed by April 15 to avoid interest and late payment penalties. California also grants an automatic extension for state returns with the same conditions. Filing an extension is common and does not increase your chances of being audited.

Estimated tax payments are quarterly payments made to the IRS for income not subject to withholding, such as self-employment income, rental income, or investment gains. You generally need to make estimated payments if you expect to owe **$1,000 or more** in federal tax after credits and withholding. Payments are due **April 15, June 15, September 15**, and **January 15** of the following year. To avoid underpayment penalties, pay at least 100% of last year's total tax (110% if your AGI exceeded $150,000) or 90% of this year's tax through quarterly installments.

We recommend monthly bookkeeping to keep your records current and accurate. This helps you make informed business decisions, stay prepared for tax season, and quickly identify any financial issues. We offer monthly bookkeeping packages tailored to your business size.

**Cash basis** records income when received and expenses when paid — it's simpler and commonly used by small businesses and sole proprietors. **Accrual basis** records income when earned and expenses when incurred, regardless of when cash changes hands — it provides a more accurate picture of financial health and is required for businesses with over $30 million in average annual gross receipts. Most small businesses can choose either method, but once selected, you need IRS approval to change. Cash basis is generally easier to manage, while accrual is better for businesses with significant accounts receivable or payable.

The IRS generally recommends keeping tax records for **3 years** from the date you filed the return. However, there are important exceptions: keep records for **6 years** if you underreported income by more than 25%, and **7 years** if you filed a claim for a loss from worthless securities or bad debt. Records related to **property** (purchase price, improvements) should be kept until the statute of limitations expires for the year you dispose of the property. Employment tax records must be kept for **4 years** after the tax is due or paid. When in doubt, keep records longer rather than shorter.

Yes. Our licensed professionals are authorized to represent taxpayers before the IRS. We handle audits, collections, appeals, and all forms of tax resolution including Offers in Compromise, installment agreements, and penalty abatement requests.

Don't panic — most IRS notices are routine and can be resolved. First, **read the notice carefully** to understand what the IRS is requesting. Common notices include CP2000 (unreported income), CP14 (balance due), and CP501/CP503 (payment reminders). **Do not ignore it** — there is usually a response deadline (typically 30 days). Compare the notice with your tax return and records. If you agree with the changes, follow the payment instructions. If you disagree, respond in writing with supporting documentation by the stated deadline. You have the right to professional representation — an authorized representative can communicate with the IRS on your behalf.

The IRS offers several options if you cannot pay in full. **Installment Agreement**: You can set up a monthly payment plan — if you owe $50,000 or less, you can apply online for a streamlined agreement. **Offer in Compromise (OIC)**: In some cases, the IRS may accept less than the full amount owed if you can demonstrate inability to pay. **Currently Not Collectible (CNC)**: If you're experiencing financial hardship, the IRS may temporarily suspend collection activity. **Penalty Abatement**: If you have reasonable cause (illness, disaster, etc.), penalties may be reduced or waived. The most important step is to **file your return on time** even if you can't pay — failure-to-file penalties are much higher than failure-to-pay penalties.

The best entity type depends on your specific situation, including your income, number of owners, liability concerns, and growth plans. Common options include LLC, S-Corp, and C-Corp. We provide a free consultation to analyze your situation and recommend the most tax-efficient structure.

An **Employer Identification Number (EIN)** is a federal tax ID for your business. You **need** an EIN if you have employees, operate as a corporation or partnership, file certain tax returns (employment, excise, alcohol/tobacco/firearms), or withhold taxes on income paid to a non-resident alien. Even sole proprietors often benefit from having an EIN to keep their SSN private on business documents. You can apply for free directly through the **IRS website** (irs.gov) and receive your EIN immediately upon completing the online application. The process takes about 10 minutes. You can also apply by mail or fax using Form SS-4, but this takes 4–6 weeks.

After forming an LLC, you must maintain compliance to keep your entity in good standing. **Federal requirements**: File the appropriate tax return (single-member: Schedule C with Form 1040; multi-member: Form 1065; S-Corp election: Form 1120-S), pay estimated taxes quarterly, and obtain any required licenses. **California requirements**: File a **Statement of Information** with the Secretary of State every 2 years ($20 fee), pay the annual **$800 minimum franchise tax** to the Franchise Tax Board (new LLCs are exempt for their first year), and file Form 568 (LLC Return of Income). You should also maintain a separate business bank account, keep meeting minutes (if applicable), and document major business decisions.

As an employer, you are responsible for several payroll taxes. **FICA taxes**: You must withhold 6.2% for Social Security and 1.45% for Medicare from employee wages, and match both amounts (total employer cost: 7.65%). **Federal Unemployment Tax (FUTA)**: 6.0% on the first $7,000 of each employee's wages, with up to 5.4% credit for state unemployment taxes paid. **State taxes**: California employers pay State Unemployment Insurance (SUI), Employment Training Tax (ETT), and must withhold State Disability Insurance (SDI) from employee wages. You must deposit these taxes according to IRS deposit schedules (monthly or semi-weekly depending on your total tax liability) and file Form 941 quarterly.

The distinction depends on the **degree of control** you have over the worker. A **W-2 employee** works under your direction (you control when, where, and how they work), and you must withhold income taxes, pay FICA, and provide benefits. A **1099 independent contractor** controls how they perform their work, uses their own tools, and works for multiple clients. Misclassifying employees as contractors can result in significant IRS penalties, back taxes, and interest. The IRS uses a multi-factor test examining behavioral control, financial control, and the type of relationship. California applies the stricter **ABC test** under AB5, which presumes workers are employees unless all three conditions of independence are met.

Yes! We are a fully bilingual firm serving clients in both English and Korean. Our team can communicate, prepare documents, and provide consultations in either language. Visit our Korean site at /ko/ for Korean-language content.

If you are a U.S. person (citizen, green card holder, or resident alien) with foreign financial accounts whose aggregate value exceeds **$10,000 at any point** during the year, you must file an **FBAR (FinCEN Report 114)** by April 15 (automatic extension to October 15). If your foreign assets exceed higher thresholds ($50,000/$75,000 for single filers), you must also file **Form 8938 (FATCA)** with your tax return. Interest and other income earned in Korean accounts is taxable and must be reported on your return. The U.S.-Korea Tax Treaty and Foreign Tax Credit can help avoid double taxation. Penalties for non-compliance can be severe — up to $10,000 per account per year for non-willful FBAR violations.

Yes. We prepare a full range of tax returns for both individuals and businesses. For **individuals**, this includes Form 1040 (personal income tax), state returns, and related schedules. For **businesses**, we handle Form 1120 (C-Corp), Form 1120-S (S-Corp), Form 1065 (Partnership), Form 990 (Non-profit), and Schedule C for sole proprietors. We also prepare multi-state returns when clients have income in more than one state. Many of our clients are business owners who benefit from having both their personal and business returns prepared together, ensuring consistency and maximizing deductions across both.