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2016 Deadlines and Dates

Its that time of year again, well technically that time of year started last month but I’m a little bit behind or on-time or just barely by the skin of my teeth on time. We are working hard to get all of our clients up-to-date and all requests handled as fast as possible after being “out” sick for a few months. Technically, I’m never out sick for more than a day or two but did have a small setback in August, then again in Sept, snowballing into December but I’m all healed and ready to get through these deadlines…so without further ado..the official deadlines. 1/27/16 = W2s have to be mailed out –  done 2/1/16 = 4th qtr 2015 Sales Tax Return and Payments due – whew, done 2/17/16 = 1099s need to be mailed out to people 2/29/16  = San Francisco Payroll Tax Return due for last year 3/2/16  = FAFSA due for California 3/15/16 = Corporate Tax Returns due 3/31/16 = 1099s must be electronically filed (at this point, no changes can be made) 4/15/16 = Personal Tax Returns due 4/16/16 = I’m going to need a...

SEPs: A Quick and Easy Retirement Plan Option

Setting up and maintaining a simplified employee pension (SEP) is probably easier than you think. The sooner you get started saving, the more secure your retirement will be, plus your business can gain tax advantages right away. SEP Basics The SEP is a stripped-down retirement plan mainly intended for self-employed individuals (including sole proprietors, partners, and LLC members), as well as small corporate employers. If you’re self-employed, you can make an annual deductible contribution of up to 20 percent of self-employment income to a SEP account. For this purpose, self-employment income generally equals the net profit shown on your Schedule C, E, or F, minus the deduction for 50 percent of self-employment tax from page one of Form 1040. If you’re employed by an S or C corporation, the company must establish the SEP on your behalf. The corporation can then make a deductible contribution of up to 25 percent of your salary to your SEP account. For 2014, the maximum possible contribution to any participant’s SEP account is $52,000 (up from $51,000 in 2013). The Advantages and Disadvantages Advantages: You can establish a SEP at just about any brokerage firm or financial institution. Simply fill out Form 5305-SEP, which takes only a few minutes. It doesn’t get any easier than this. Even better, you can establish a SEP as late as the extended due date of the federal income tax return for the year the initial deductible contribution will be made. Here’s an example, assuming you are a sole proprietor. You extend your 2013 individual tax return as long as possible, to October 15, 2014. You have until...

Questions to ask your tax preparer

Great article on Forbes today about 11 questions to ask when hiring a tax preparer and I agree on the 11 questions you should ask your tax preparer or potential tax preparer and we got your answers and we’ve added an additional question and answer. Do you have a valid PTIN?  Yes, we do and you can check for valid PTIN on the PTIN Directory What is your tax background? Check out our qualifications Have you prepared a tax return before for my type of situation? If we have never done your type of tax return or special circumstances, we will tell you up-front that it might be an extra cost or we will need to consultant with a specialist in that area. We do have several resources and other CPA firms we can contact to help with specialized tax returns and if we can’t help you, we will refer you to someone that can. Do you know the requirements of the state and localities where I am required to file? We do know Federal Tax Law, California Tax Law and New Mexico Tax Law. Each state has quirky filing requirements and as part of our due diligence, we do research and learn about a specific state law or requirement before filing. What records and other documentation do you need from me? We send out a tax list of required documents at the beginning of each year to each of our clients, since every client is different, everyone gets a different list. However for a new client, we send a generic tax planner and then ask questions regarding the answers....

What Income in Nontaxable?

Most types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable: Child support payments; Gifts, bequests and inheritances; Welfare benefits; Damage awards for physical injury or sickness; Cash rebates from a dealer or manufacturer for an item you buy; and Reimbursements for qualified adoption expenses. Some income is not taxable except under certain conditions. Examples include: Life insurance proceeds paid to you because of an insured person’s death are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable. Income you get from a qualified scholarship is normally not taxable. Amounts you use for certain costs, such as tuition and required course books, are not taxable. However, amounts used for room and board are taxable. All income, such as wages and tips, is taxable unless the law specifically excludes it. This includes non-cash income from bartering, such as the exchange of property or services. Both parties must include the fair market value of goods or services received as income on their tax return. If you received a refund, credit or offset of state or local income taxes in 2012, you may be required to report this amount. If you did not receive a 2012 Form 1099-G, check with the government agency that made the payments to you. That agency may have made the form available only in an electronic format. You will need to get instructions from the agency to retrieve this document....

A time of transition, changing jobs may lower your taxes

September is often a time of transition, when people decide to make major life decisions–such as changing jobs. If you’re looking for a new job, then you may be able to claim a tax deduction for some of your job hunting expenses–as long as it’s in your same line of work. Here are seven things you need to know about deducting these costs: 1. Your expenses must be for a job search in your current occupation. You may not deduct expenses related to a search for a job in a new occupation. If your employer or another party reimburses you for an expense, you may not deduct it. 2. You can deduct employment and job placement agency fees you pay while looking for a job. 3. You can deduct the cost of preparing and mailing copies of your resume to prospective employers. 4. If you travel to look for a new job, you may be able to deduct your travel expenses. However, you can only deduct them if the trip is primarily to look for a new job. 5. You can’t deduct job search expenses if there was a substantial break between the end of your last job and the time you began looking for a new one. 6. You can’t deduct job search expenses if you’re looking for a job for the first time. 7. You will usually claim job search expenses as a miscellaneous itemized deduction, but can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross...

Which Moving Expenses are Deductible?

If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses; however, you may not deduct any expenses for meals. If you meet the requirements of the tax law for the deduction of moving expenses, you can deduct allowable expenses for a move to the area of a new main job location within the United States or its possessions. Your move may be from one United States location to another or from a foreign country to the United States. Note: The rules applicable to moving within or to the United States are different from the rules that apply to moves outside the United States. These rules are discussed separately. To qualify for the moving expense deduction, you must satisfy three requirements. Under the first requirement, your move must closely relate to the start of work. Generally, you can consider moving expenses within one year of the date you first report to work at a new job location. Additional rules apply to this requirement. Please contact us if you need assistance understanding this requirement. The second requirement is the “distance test”; your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. For example, if your old main job location was 12 miles from your former home, your new main job location must be at least 62 miles from that former home. If you had no previous workplace, your new job location must be at least 50...