Wilson CPA Services

Wilson CPA Services Through tax prep and planning, we reduce friction and save money for W-2 earners & small businesses.

07/01/2026

You might not be withholding enough taxes:

Everyone has a general idea of how much their salary is and what their take-home pay is. And some people might understand that increasing pretax benefits at work could lower your tax bill. However, when it comes to other pieces of the tax equation (e.g., retirement account withdrawals, capital gains, pensions), withholding the suggested percentage recommended by your broker may not be enough.

Example: Munetaka is 32 years old and single, lives in Illinois, and makes a $150,000 salary. Munetaka withholds the proper amounts for federal and state taxes. Munetaka has sold some investments in his brokerage account to pay for a vacation, leading to $5,000 in short-term capital gains. In addition, Munetaka converted $100,000 of his 401k into a Roth IRA to avoid paying taxes on these withdrawals in retirement. Munetaka didn't make any withholdings for his brokerage account but Munetaka withheld 20% for taxes.

What Munetaka missed: Regarding the brokerage account, the capital gains will be taxed at Munetaka's ordinary tax rate since they are short term. He will not receive preferential tax treatment since he didn't hold the investments longer than one year. Regarding the Roth conversion, Munetaka's total income for the year places him in a tax bracket higher than 20%. Moreover, there is a 10% penalty assessed on this type of transaction.

Outcome: Munetaka was expecting a minimal tax bill given the proper amounts were being withheld from his W-2 and since he withheld money for taxes on the retirement account transaction. In reality, Munetaka is left owing the IRS more than $19,000 and the state of Illinois $250.

Wilson CPA Services can help you estimate the proper amount to withhold for taxes or make an estimated tax payment during the year. Please reach out to learn how certain transactions impact will impact your tax return.

06/23/2026

Business owners should not prepare their own taxes

"Of course a CPA is telling me this," you might think. But do you understand the difference between a profit and loss statement for tax purposes versus for financial reporting versus a cash flow statement?

Let's use a consulting business for an example. The business generates $100 in revenue, has $10 in software expenses, and $20 in meals. The business's cash flow is $70; the business's income for tax purposes is $80, and the business's income for financial reporting is less than $70 (theoretically).

This example doesn't even consider expenses like business vehicles, travel, home office, depreciation and amortization, and more. The tax law is complex and is always changing. Wilson CPA Services can help you understand how your day-to-day decisions impact your tax bill. Please reach out if you'd like to discuss tax strategy, tax preparation, or other assistance.

06/16/2026

How the tax code benefits home sellers:

The homeowner's exclusion allows taxpayers to not pay tax on the capital gain from the sale of their primary residence up to a certain dollar amount. These amounts are $250,000 for single filers and $500,000 for married couples.

Example: A married couple purchased a home in 2020 for $300,000 and made $30,000 of renovations since then. The couple sells the home in 2026 for $800,000. This equals a capital gain of $470,000 ($800,000 minus $300,000 minus $30,000). The couple does not have to pay taxes on this capital gain under the homeowner's exclusion.

Logistics: You need to have lived in the home for at least 2 out of the last 5 years. In addition, this only works for primary residences. Vacation homes and rental properties do not qualify for this exclusion.

Other considerations: Keep records of home improvements you make. The cost of home improvements and renovations can be added to your cost basis of the home, minimizing potential taxes. Also, you can rinse and repeat this strategy. You can use this strategy with every home you live in, as long as you take care of the logistics above.

Reach out to Wilson CPA Services if you have questions about this and other tax strategies!

06/09/2026

The tax rule that provides tax-free rental income:

The Augusta Rule allows you to rent out your primary residence for up to 14 days per year without you needing to report the rental income and pay taxes on it. However, since the income isn't being reported, you are not allowed to deduct expenses from this income.

Think about when concerts, conferences, sporting events, and other events are happening in your town. The World Cup will take place in a few major cities in the U.S. over the next few weeks. You can check prices of hotels and Airbnbs before setting your nightly price and not worry about paying taxes on this income if you do it for 14 days or less in total each year.

Reach out to Wilson CPA Services if you have questions about this and other tax strategies!

06/02/2026

How a tech founder accumulated $5 billion in a Roth IRA…

Peter Thiel, founder of PayPal and Palantir Technologies, accrued $5 billion in his Roth IRA by purchasing shares of PayPal before it became a public company. Thiel had roughly $2,000 in his self-directed Roth IRA at the time of purchase in 1999 and a purchase price of less than a penny per share (1.7 million shares). At the end of 2019, these shares were worth $5 billion, and none of that money will be taxed (if withdrawn after age 59.5) since it is in a Roth IRA.

How practical is this strategy? The most you can contribute to a Roth IRA every year is a little less than $10,000, and less if you are a high earner. Even if you had $50,000 to invest in a stock trading at $0.01, the stock would need to increase by 200x in order for you to become have $1 billion. You would also need to go the extra step and set up a self-directed Roth IRA if you would like to invest in private companies, real estate, and other assets.

What is the validity of this strategy? You are absolutely allowed to purchase private company shares and other alternative investments with a self-directed Roth IRA.

Reach out to Wilson CPA Services if you have questions about this and other tax strategies!

Had a great time a couple of weeks ago at the Multi-Chamber Economic Outlook Networking Luncheon & Business Expo! Heard ...
04/17/2026

Had a great time a couple of weeks ago at the Multi-Chamber Economic Outlook Networking Luncheon & Business Expo! Heard an insightful keynote from Ellen Rissman, Assistant Vice President of Policy and Communications at the Federal Reserve Bank of Chicago. I appreciated her views on the U.S. economy and Illinois more specifically. Plus, I connected with some awesome local businesses at their booths at the expo. 💼📈📊

Enjoyed another Lakeview East Chamber of Commerce event last night! I attended the annual meeting which was held in the ...
04/03/2026

Enjoyed another Lakeview East Chamber of Commerce event last night! I attended the annual meeting which was held in the 1914 Club this year. It sounds like the neighborhood is thriving with storefront vacancies down 32% year-over-year and the MLB Allstar Game coming to Wrigley in 2027! I also found it interesting that the neighborhood is launching a digital gift card.

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