CPA Services for NYC Law Firms
Tax planning, bookkeeping and IOLA trust accounts for NYC attorneys
You practice law. We handle the numbers, from your books to your tax return, in one monthly package.
Accounting and tax built for how law firms work
Running a law firm in New York City comes with accounting and tax rules most businesses never deal with: IOLA trust accounts, PLLC and PC entities, the NYC Unincorporated Business Tax, and how to pay yourself as an owner. A general bookkeeper can easily get these wrong. We work with NYC attorneys every month and know what your practice needs.
What we handle for law firms
- Tax planning and tax returns. We plan during the year to lower your taxes, make the right moves before December 31, then prepare your business and personal returns with the same numbers. See our year-end tax planning checklist.
- Paying yourself. The right salary and distributions for attorney owners, so you save on payroll taxes without drawing IRS attention. See how NYC business owners should pay themselves.
- Entity structure. PLLC or PC, whether an S Corp election makes sense, and how New York State and New York City tax each one. See S Corp vs. LLC in NYC.
- NYC and NYS taxes. The Unincorporated Business Tax for solo practices and law partnerships, NYC corporate tax for PCs, and the PTET election. See our NYC PTET guide.
- Retirement plans. A Solo 401(k), SEP IRA or other plan that lowers your taxes while you save. See Solo 401(k) vs. SEP IRA.
- Monthly bookkeeping. Your operating and trust accounts kept up to date and kept separate.
- IOLA trust account reconciliations. Every trust deposit and disbursement recorded, each client’s balance tracked, and the account reconciled to the bank statement every month. Escrow funds stay on your books as a liability, not income, so they never inflate your revenue or your taxes.
Work directly with an experienced CPA
You work directly with Meir Spear, CPA, CFP, a NYC CPA since 2004 who has worked with attorneys and law firms for many years. You get straight answers when you need them from someone who already knows how a law practice runs.
Who it’s for
NYC solo attorneys and law firms with $500,000 or more in revenue who want their trust accounting, books and taxes handled in one place.
Client Results
Two-partner NYC law firm saves about $60,000 a year in taxes
A two-partner New York City law firm with about $1.5 million in revenue came to us overpaying taxes, with disorganized books and a missed PTET election.
- Cleaned up and caught up the firm’s books
- Reconciled the IOLA trust account and set up ongoing monthly reconciliations
- Elected S Corp status and set reasonable salaries for both partners
- Elected New York’s Pass-Through Entity Tax (PTET), making the partners’ state income tax deductible on their federal returns
Result: The partners save about $60,000 a year in taxes. Four years later, we still handle the firm’s monthly bookkeeping, IOLA reconciliations, tax planning, and tax returns.
What NYC Attorneys Say
★★★★★
“Meir Spear is an awesome CPA. He is very professional, always way ahead of me, makes doing my taxes/financials easy and always makes me feel taken care of. As soon as you meet him, you know you and your business are in good hands.”
David Binson
Law Office of David Binson PC
★★★★★
“They are extremely knowledgeable and courteous… I always receive a prompt call back with regard to any tax concerns or questions I have. They are fair, competent and just know their stuff.”
Scott Hammer
Scott Hammer & Associates PC
★★★★★
“Meir Spear has been excellent to work with right from the beginning. He is super responsive and knowledgable. I would highly recommend him and his team!”
Mehak Rashid
Legal Scale LLP
Frequently Asked Questions
Should my law firm be a PLLC, PC, or LLP?
All three protect your personal assets from the firm’s general debts and from your partners’ malpractice. The main differences:
- PLLC: one or more owners. Can be taxed as a sole proprietorship or partnership, or elect S Corp status. Requires publishing a notice in two newspapers, which can cost $1,000 or more in New York City.
- PC: one or more owners. Can elect S Corp status, with no publication requirement. If an S Corp makes sense for you, a PC is often the simpler choice.
- LLP: two or more partners. Taxed as a partnership by default, but can elect S Corp status. Has the same publication requirement as a PLLC.
We review your situation and help you decide.
What New York City tax does my law firm pay?
It depends on how your firm is taxed. Sole proprietors and firms taxed as partnerships generally pay the New York City Unincorporated Business Tax. PCs and firms that elect S Corp status generally pay New York City corporate tax instead, since New York City does not recognize S Corp status.
Should a solo attorney elect S Corp status?
Often, once your profit reaches a certain level. An S Corp lets you split your income between a reasonable salary and distributions, which can save significant self-employment tax. It also adds payroll costs and New York City corporate tax, so we run the numbers with you first.
Should my law firm elect PTET?
Often, if your firm is a partnership or S Corp with solid profit. New York’s Pass-Through Entity Tax lets the firm pay your New York State (and, if you live in the city, New York City) income tax, which makes it deductible on your federal return. The election must be made each year by March 15, so it’s worth reviewing early.
Is money in my IOLA account taxable income?
No. IOLA funds belong to your clients. They become your income only when you earn a fee and move it to your operating account. Keeping the two accounts separate and reconciled is essential.
How much should a solo attorney set aside for taxes?
Many solo attorneys in New York City set aside about 30% to 40% of their profit for federal, New York State, New York City, and self-employment taxes. The exact amount depends on your income, entity, and deductions. Paying quarterly estimates helps you avoid penalties and a large bill in April.
