Your Tax Questions Answered

Tax questions don’t have to be overwhelming. Arnoff & Romo provides clear, accurate answers tailored to individuals and small businesses throughout the US and various countries. With expert knowledge of local tax regulations and a focus on approachable, professional service, they ensure you feel informed and confident every step of the way.

Frequently Asked Questions

  • Should I be an LLC?

    Probably the question we get most from those starting a business. Many ask the question thinking there will be some type of tax benefit. There is actually none at all. The IRS considers an LLC a ‘disregarded entity’. Of course, as with most answers in the tax world, it is not that simple.


    LLCs can offer legal protection if setup and maintained correctly. However, laws vary by state and to be compliant with LLCs or corporations, we recommend you consult with an attorney who specializes in entity compliance in your state. Our firm has contacts in many of the states, so please check with us for a referral.


    As mentioned above, an LLC is a disregarded entity from the perspective of the IRS. This means that your entity will default to a certain status based on how many members there are. So if you are a single member LLC, you will automatically be taxed a sole proprietor unless you make an election otherwise. For a discussion on the election choices you have and how those would impact your taxes, please email or give us a call.

  • I am a W2 worker, is there anything I can do to lower my taxes?

    You may have surmised that there are less tips and tricks for those who work as a W2 employee to lower your taxes (unless of course you have real estate or some other side hustle). For those who are exclusively reporting W2 income on their tax return, your best bet is to take advantage of your company's retirement arrangements as this will lower your taxes in the current year. You can also look into a high deductible health plan (HDHP) which would qualify you for an Health Savings Account (HSA). The money you contribute to an HSA account each year is a deduction on your tax return, and you may be surprised at the long list of HSA qualified expenses you can spend that money on. For specifics, please email us or give us a call.

  • What are the best tax savings strategies you know of?

    Of course, this is a broad question and it depends on your circumstances, but here are a few things to know about. Most are for the entrepreneurial types, so it may or may not apply to you, but it never hurts to learn what is out there.


    • Section 105 Health Reimbursement Arrangement – Perfect for those with a sole proprietorship with a spouse. It would allow you to potentially write off your premiums and out of pocket expenses against your self-employment income.
    • Hire Your Kids – Works best with sole proprietors, but can also work with other entities. But there are strict record keeping requirements, so proceed with care.
    • Defined Benefit Plan – Those that can contribute to one of these (a pension) are fewer and further between in our corporate world. Learn how to set one up yourself and contribute much larger amounts than your typical IRA or 401(k) would allow you to contribute.
    • Individual Life Insurance Trusts (ILITs) – For those with sizeable estates, these can be used to protect your assets for future generations.