Tax Planning and Preparation

Jim, age 41, is an employee of an international technology company. After 3 years working for the European branch of the company, he and his wife Nina moved to the USA. Jim continued working for the same company.

His compensation typically included Stock Options, Stock Awards and Deferred Compensation. Since his compensation vested in both countries, he was concerned that once he paid Income and Social Security taxes in both countries, he would be left with very little net payheck.

Jim and Nina have accumulated different investments, bank accounts and partnership interests outside of the US, which might create a myriad of annual reporting obligations to the IRS, and potential penalties if gone unmet.

They knew they should be doing more from a financial and tax planning perspective, but didn’t really know where to start. They were referred to us by a fellow employee for our expertise in tax and stock option planning and the associated tax implications.

We started our relationship with Jim & Nina by reviewing all their past tax returns. We discussed with them their goals and future plans. We talked to their foreign CPA and gained perspective on the foreign tax implications.

Now that we identified the potential pitfalls and the opportunities, we were able to present a plan that included a schedule of exercising Jim’s stock options and the sale of his stock awards to minimize the total taxation in both countries. We coordinated the execution of the plan with the foreign advisers.

Jim & Nina proceeded to consolidate the investments and bank accounts to substantially reduce the IRS reporting obligations and to simplify future investment management decisions.

Note: Jim & Nina are not actual clients, but their case is presented here as an illustration of our services.