tax

Challenging Tax Environment

challenge

Taxpayers and their advisers engaged in year-end tax planning for 2015 are challenged by the uncertain fate of “extender legislation.” In previous years, a number of “temporary” tax rules, i.e., those having a termination date specified in the Code, routinely were extended for one or two years, but this year, Congress has yet to act on a host of important provisions that expired at the end of 2014. Some or all of these expired provisions may be retroactively reinstated, thereby opening up some truly last minute year-end tax planning opportunities, but there’s no way of knowing if that will take place.
The tax breaks that expired at the end of 2014 include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the line- deduction for qualified higher education expenses; tax-free IRA distributions for charitable purposes by those age 70-1/2 or older and the exclusion for up-to-$2 million of mortgage debt forgiveness on a principal residence. For businesses, tax breaks that expired at the end of last year and may be retroactively reinstated and extended include: 50% bonus first year depreciation for most new machinery, equipment and software; the $500,000 annual expensing limitation; the […]

By |December 1st, 2015|tax|0 Comments

TOT (Transient Occupancy Tax: Hotel, Motel, Campground or Bed Tax) Program

Do you offer, or will you be offering, lodging in unincorporated Sonoma County for a fee? TOT applies to any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging, or sleeping purposes for 30 days or less. Collecting TOT is mandatory if you are providing short-term rentals. (Sonoma County Ordinance No. 5823). The property must be registered with the Tax Collector and a valid TOT Certificate obtained. If you are within the city limits please contact your respective city. For further information, please call 707/565-7133 or visit www.sonoma-county.org/tax/tot.

By |November 18th, 2015|tax|0 Comments

California Tax Relief Available for Taxpayers Affected by Wildfires

The California State Board of Equalization (SBE) has announced that taxpayers impacted by the Butte Fire in Amador and Calaveras counties and the Valley Fire in Lake and Napa counties may request an extension to file their returns, relief from penalties and/or interest on some taxes and fees, or to replace copies of records lost to damage. (California SBE News Release No. 76-15-G, 09/17/2015.)

Requesting relief and taxes and fees for which relief is available. Taxpayers and fee payers can go online to request relief from penalty and/or interest, and an extension of time to file a tax/fee return. Any taxpayer or feepayer can use the online system to make their request; those without Internet access may call the SBE Customer Service Center at 1 (800) 400-7115.

Relief from penalty and interest is available for the following taxes and fees: sales and use taxes; fire prevention fee; alcoholic beverage tax; cigarettes and tobacco products excise taxes; energy resources surcharge; emergency telephone users surcharge; natural gas surcharge; timber yield tax; fuel taxes (diesel fuel tax, interstate user tax, use fuel tax, motor vehicle fuel tax, aircraft jet fuel tax); underground storage tank maintenance fee; oil spill prevention […]

By |September 22nd, 2015|tax|0 Comments

April 15th- Some Tax Day Fun

While for some, April 15th conjures up feelings of stress, writing large checks and general anxiety. Or if you’re a CPA, utter relief and celebration… The world of taxes is a complex maze to navigate. Regarded by some as the smartest man who ever lived, even Albert Einstein was no fan of figuring out his taxes, once remarking, “The hardest thing in the world to understand is the income tax.”

But it’s not all bad news, here’s some fun to hopefully liven up your Tax Day.

Freebies and Deals (in case your refund hasn’t arrived or if you’re one of the lucky few writing a check):

  • Stop by any Ben and Jerry’s today (April 14th) for a free ice cream cone between 12-8pm.
  • Cinnabon is back again for 2015, giving customers a free bite (actually two bite sized cinnamon rolls) to eat on April 15th from 6:00 p.m. to 8:00 p.m. at participating locations.
  • Whole Foods, yep – you read that correct, WHOLE FOODS, will be waiving sales tax on April 15th on purchases at participating locations.

Fun Facts for Tax Day:

  • Perhaps we shouldn’t even call April 15 tax day. Refund day might be better, since three out of every four families in […]
By |April 14th, 2015|tax|0 Comments

IRS Automatically Extends Filing for Certain Estates Electing Portability

In estate planning, the concept of “portability” of a deceased spouse’s unused exclusion (DSUE) amount is relatively new. For decedents dying after December 31, 2010, if a first-to-die spouse has not fully used the estate tax exclusion, the DSUE amount can be transferred to the surviving spouse. This was originally passed as a two-year temporary provision until it was made permanent in the American Taxpayer Relief Act of 2012. Estate tax returns are usually required to be filed within 9 months of death to make the deceased spousal unused exclusion election. The IRS released Revenue Procedure 2014-18, providing an automatic extension for certain estates of decedents dying in 2011, 2012 and 2013 to elect portability. The extension applies to estates that would otherwise not have had a filing requirement, and allows the estates to file a return to elect portability until December 31, 2014. It includes the estates of same-sex decedents who were not eligible to elect portability until after the Windsor decision (United States v. Windsor recognized same-sex marriages for purposes of determining marital status of taxpayers under the Internal Revenue Code, the IRS has issued Revenue Procedure 2014-18 to grant limited relief for late elections).

This revenue procedure applies only […]

By |October 28th, 2014|estate, extension, tax|0 Comments

Year-end tax planning with checklists and tips

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks doubtful. These include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line deduction for qualified higher education expenses; and tax-free distributions by those age 70-1/2 or older from IRAs for charitable purposes. For businesses, tax breaks that are available through the end of this year but won’t be around next year unless Congress acts include: 50% bonus first-year depreciation for most new machinery, equipment and software; an extraordinarily high $500,000 expensing limitation; the research tax credit; and the 15-year write-off for qualified leasehold improvements, qualified restaurant buildings and improvements and qualified retail improvements.

High-income-earners have other factors to keep in mind when mapping out year-end plans. For the first time, they have to take into account the 3.8% tax surtax on unearned income and the additional 0.9% Medicare (hospital insurance, or HI) tax that applies to individuals receiving wages with respect to employment in excess of $200,000 ($250,000 for […]

The Shutdown and What That Means For You

And a Few Things You Should Know Relating to Your Taxes: 

  • You can file your tax return electronically or on paper –– although the processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.
  • Tax refunds will not be issued until normal government operations resume.
  • For taxpayers seeking assistance, only the automated applications on the regular 800-829-1040 telephone line will remain open.
  • All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.
  • While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. 
  • No live telephone customer service assistance will be available, however most automated toll-free telephone applications will remain operational. IRS walk-in taxpayer assistance centers will be closed.

The Federal Government might be “shutdown” and IRS employees are on furlough, but deadlines remain in effect and extensions are due on October 15. Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to […]

Planning for the new Medicare taxes in 2013

As summer quickly passes and we head into the last half of 2013, it is a good time to evaluate your income and deductions for the year and begin working with your CPA on planning strategies to reduce your overall tax burden.

Specifically, upper income individuals should be aware of the additional Medicare Tax which applies to earned income  (wages and self-employment income).  Prior to this new tax provision beginning in 2013, any wages paid to you by your employer were subject to a 2.9% Medicare payroll tax, which was split equally by you and your employer (1.45% each).  Beginning in 2013, wages above $200,000 for individual tax filers, or $250,000 for married taxpayers filing jointly, will be subject to an additional .9% Medicare tax.  
For illustrative purposes, this would mean that if you and your spouse file a joint tax return and have combined wages of $350,000, you will end up paying an additional $900 in Medicare taxes. Employers are required to withhold this additional tax for employees with wages in excess of $200,000, and any underpaid or overpaid Medicare taxes will be adjusted for on your income tax return.  Individuals with both wages and self-employment income aggregate their earned […]

Beware of the 3.8% Medicare Surtax for Estates and Trusts

Ever since the United States Supreme Court upheld the Affordable Care Act, most of the focus has been on how this increased tax effects individual taxpayers.  As determined by this decision, individual taxpayers with modified adjusted gross income over $200,000 (or $250,000 for married taxpayers) are subject to an increased 3.8%  Medicare surtax on certain investment income beginning in 2013.


Little focus has been given on how this increased Medicare surtax will increase tax liabilities for trusts and estates.  Income in an irrevocable trust is either taxed to the trust or to the trust beneficiaries.  If income in the trust or estate is accumulated at the trust or estate level, then the trust or estate pays the income tax.  If the income is distributed to the beneficiaries, however, the trust receives an income tax deduction for the amount of the distributable net income (DNI) and the beneficiaries report the taxable income. 


In the case of a trust or estate, the 3.8% Medicare surcharge is imposed on the lesser of either undistributed net investment income or the excess of adjusted gross income over the highest estate or trust income tax bracket.  For 2013, the highest trust income tax bracket begins at $11,950, […]

Tax Time: What You Need to Know



Every year the tax codes change and last year was no different. The real questions, as we close in on April 15th, are: What are the significant changes that will have an effect on how I prepare my returns for 2012; and, what planning should I be doing now for the current calendar year.
The biggest news, which we’re hoping our clients have heard about at this point, is the passage of the American Taxpayer Relief Act at the beginning of this year. In addition to changing how the Alternative Minimum Tax is calculated on 2012 taxes, it retained the status quo for a number of temporary tax breaks, extending some retroactively and others into the 2013 tax year. Marginal tax brackets also rose a bit, so even if you made a couple thousand dollars more last year, you’ll probably owe the same percentage as you did last year.

Deductions for 2012
The standard deduction for those who don’t itemize rose by $150 for single filers and $300 for joint filers — to $5,950 if you’re filing solo and $11,900 if you’re filing with your spouse. And the amount you get to deduct for both you and your dependents […]