what's new

This is the What's New page. It's the catch all of additional information that's good to pass on (last updated 22 December 2017).

What Tax Law Changes Iin 2017
To learn what tax laws will be different for tax year 2017, click here.

Read the December newsletter here.

Stop Price Creep
It seems to happen to everyone at sometime. Your cell phone bill seems to increase overnight or the cable bill... here are a few ideas that might help.

In the news: The Student Tax Scam
We've all heard about the many scams out there... and here is another to know about. Read it here.

End of Year Tax Tips To Help Your Refund
Read this article that provides suggestions of ways to increase your tax refund for this year.

Federal Money for College
Prepare now for FAFSA filing
The Free Application for Federal Student Aid (FAFSA) is often the starting point to help families finance the ever challenging cost of a student's college education. The application is available starting January 1st. The earlier you file your application, the earlier you will receive aid packages from most participating schools. Click for more info

What You Need to Know about the Amount of Health Insurance Reported on Form W-2
You may be wondering if you have to report the value of your employer-sponsored health insurance coverage, which may appear on your W-2, Wage and Tax Statement when you file your 2013 federal income tax return.

Here is what you need to know about the value shown on your W-2.
  • The health care law requires certain employers to report the cost of coverage under an employer-sponsored group health plan.
  • The amount of employer-sponsored health insurance coverage appears in Box 12 of the W-2, and has the code letters "DD" next to it.
  • Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable or that it needs to be reported on your tax return.
  • The amount is only for information, and shows the payments made by you and your employer and is not included in the amount shown in Box 1, which is the amount of taxable earnings.

Identity Theft
IRS Issues of new Telephone Scam
The IRS has issued a warning of a new phone scam. Details can be found here on their website: http://www.irs.gov/uac/Newsroom/IRS-Warns-of-Pervasive-Telephone-Scam.

IRS Website on Health Care Law
The IRS has launched a new Affordable Care Act Tax Provisions website at IRS.gov/aca to educate individuals and businesses on how the health care law may affect them. The new home page has three sections, which explain the tax benefits and responsibilities for individuals and families, employers, and other organizations, with links and information for each group. The site provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond.

Topics include premium tax credits for individuals, new benefits and responsibilities for employers, and tax provisions for insurers, tax-exempt organizations and certain other business types.

Visitors to the new site will find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.

Several other federal agencies have a role in implementing the health care law, including the Department of Health and Human Services, which has primary responsibility. To help locate additional online resources from the Department of Health and Human Services, the Department of Labor and the Small Business Administration, the IRS has issued a new Web-based flyer - Healthcare Law Online Resources (Publication 5093).

Visit IRS.gov/aca for more information regarding the tax provisions of the Affordable Care Act.

Identity Theft
Tax related identity theft may result in even slower refunds next year according to IRS officials. Fraudsters are taking stolen Social Security numbers and quickly filing for fake efunds. Victims learn that their identities have been stolen only after their true return filing is rejected. The number of such cases is skyrocketing. Efforts IRS took this year to stop refund fraud slowed down payment of valid refunds, but the problem has continued to grow. So if the service implements stricter controls to combat fraudulent refunds. The waiting time for refunds will only get longer.

Fiscal Cliff Tax Hikes Are Not The Only Scary Thing That Could Happen To You On January 1 2013
In this article from the Huffington Post, they point out 10 things that will happen if we fall over the "fiscal cliff". Read here.

December 2012 End Of Year Tax Changes
There is a lot of talk and uncertainty about tax changes that Congress needs to complete by the end of the 2012 year and here is a list of changes in the wind.

Business Plan Template
If you are currently running a home based business or are planning to establish one, I would encourage you to use this Business Plan template and customize it to your type of business. The IRS has indicated that this is an important step of having a "real" business. You can download the Word document which is found at the bottom of the client login area.

Updates to Contact Page
I recently update my Contact Us page to include a new spam prevention feature. Now, along with filling in your name, email address and message. Before you press the Submit button, you also have to fill in a challenge word. This helps insure that the message is being sent from a live body. I don't post my actual email address on the website but have an individual contact me through a webpage. This in and of itself cuts down the amount of span I receive, but unfortunately spammers have the ability to scan sites and automatically enter these type pages. They don't have the ability to fill in automatically this challenge field. So, I've added it to the page. You will see something similar to this:

There are times when the words generated are hard to read and they have a button that allows to refresh the display. On the form you just to the lower center of the image you will see an icon just above what looks like a volume icon. Press this and the screen will be updated with another set of words.

There is an additonal benefit that goes along with using this service... this is what they (Google) say:
By entering the words in the box, you are also helping to digitize texts that were written before the computer age. The words that you see were taken directly from old texts that are being scanned and stored in digital format in order to preserve them and make them more accessible to the world. Since some of the words in these texts are difficult for computers to process, we are using the results of your efforts to help decipher them.

Potential Changes
I subscribe to several tax services that keep me updated on changes in the tax business. Over the last several months, I keep seeing questions like "what are some of the tax changes coming before Congress" or "what tax items may be changing". Here are a few of the current list that is being discussed.

  • Will tax rates on high-incomers rise for 2013? A real possibility. It will of course depend on the outcome of the election, but I'm hearing that one possibility is that there will be an extension of the Bush tax cuts, but not for higher income people. If reelected, President Obama will assert he has a mandate for tax hikes on upper-incomes.
  • Who's most at risk of higher tax rates? The obvious answer is millionaires. Lower tax brackets possibly will not be affected.
  • Will tax rates on capital gains and dividends increase next year? Very possible on higher income filers.

New office location
We have moved to a new location around the corner from our other office. Our new address is:
41593 Winchester Road #200
Temecula, CA 92590.
The new phone number for the office is:
(951) 234-3626
My cell and fax numbers are still the same at (951) 775-7944 and (951) 602-6016.

Increase in mileage deductions starting July 1st
Congress has increased the mileage deduction for business use (along with moving and medical uses). The new rate for business use starting July 1st will be 55.5 cents/mile (23.5 cents for moving and medical). This is up from 51 cents/mile and 19 cents/mile from January through the end of June 2011. Note that these rates are NOT retroactive. Mileage use for the first half of the year will use the old rates with the new rates applicable in the last half of the year. If you have not been tracking your mileage please begin doing so now. Use the mileage log found here on the website to track this important deduction.

New IRS Identity Protection PIN
Beginning January 2011, the IRS began sending a letter (CP01A) to taxpayers who had contacted and been validated by the IRS as being a victim of identity theft. Included in this letter is a 6-digit Identity Protection PIN which the taxpayer should include on their 2010 individual Federal income tax return in order to avoid a delay in the processing of their return.

If you have been a victim of identity theft and received this letter from the IRS please let me know at the time we prepare your return.

Please take a minute to read this important information about the latest tax scams. This information is provided by Trend Micro, a major virus protection software company and the one that I use on my machines.

The IRS announced the following forms will not be available for e-file until mid-to-late February:

  • Schedule A, Itemized Deductions
  • Form 3800, General Business Credit
  • Form 4684, Casualties and Thefts
  • Form 5405, First-Time Homebuyer Credit and Repayment of the Credit (Page 2)
  • Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
  • Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
  • Form 8859, District of Columbia First-Time Homebuyer Credit
  • Form 8910, Alternative Motor Vehicle Credit
  • Form 8917, Tuition and Fees Deduction
  • Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit
In addition, e-file does not allow entries for Educator Expenses (Form 1040, Line 23 and Form 1040A, Line 16) or Tuition and Fees (Form 1040, Line 34 and Form 1040A, Line 19). In mid-to-late February, the record layout for the Form 1040 and Form 1040A will be updated to allow entries for Educator Expenses and Tuition and Fees Deduction.

Click here for a list of 13 changes based on health care reform.

Congress may not take action this year to overhaul the tax system as some have indicated. They have many items still left on their plate. But it is thought that when the taxwriters become serious about reform, the following list are good candidates:
  • Revamping family tax breaks
  • Restructuring education tax incentives
  • Taking the bite out of alternative minimum tax (AMT)
  • Easing teh scope of the kiddy tax
  • Simplifying the mess of savings plans
Anything is fair game with these guys!

Click here to see the list of tax provisions that will expire in the 2010 tax year.

Click here for a list of items updated in the 2009 tax year.

First Time Home Buyer Tax Credit
It looks like the $8,000 First Time Home Buyer tax credit, scheduled to expire on November 30 will most likely be extended for a few more months.

Unemployment Benefits
Congress may be ready to approve an extension of unemployment benefits by an extra 13 weeks. What this means to you if you are a business and have employees... you will help pay for this extension. The current .2% unemployment surtax will be extended through 2010. In dollars this means the cost to you will be about $13-$15 per employee.

In The News...
You see it every year if you're looking. The big tax story of how the IRS has placed a large judgement. Yes, it's real. Yes it's scarey, but the message is "Don't mess with us". You've probably heard me say before "If you have the proper documentation, an audit is nothing to fear" and I continue to stand by that statement. So, when you hear me talking about keeping good records (ie: mileage log etc) I'm serious. Read the latest article I came across here.

Unemployed in 2009
If you or your spouse became unimployed the American Recovery and Reinvestment Act of 2009 says that the first $2,400 you receive in unemployment benefits, will be considered "tax free" when you file your taxes next year.

This tax-exclusion is per person, so if both husband and wife lose their jobs and both receive unemployment, they may each exclude $2,400.

More on The American Recovery and Reinvestment Act of 2009
Read about some of the cuts found in the economic stimulus package. For individuals click here, or click here to learn more about how it affects businesses.

If you know anything about Congress, it's that they have to always be adjusting the tax code. So some of the following should not be too surprising should it.

Mortgage Forgiveness Debt Relief Act
If there is any good news on the mortgage foreclosure front it would be in the changes found in the Mortgage Forgiveness Debt Relief Act which congress passes late last year (you can find it here). Normally when your lender forecloses on your property you receive a form 1099-C and you don't think about it until tax time... where you find out that the amount the lender forgave is taxable income. Everyone I talk to about this is shocked when they learn about it. This provision is for years 2007 - 2009 and only applies to your principle home. There are other provisions, but the bottom line is that for most people who have lost their home due to foreclosure, they won't have the additional insult of having the forgiven loss taxable.

Economic Stimulus Act of 2008 (12 February 2008)
Everyone seems to be interested in this and ask how this is going to work. Click here to learn about the nuts and bolts.

Advance Notice of 2008 Vehicle Dedution Mileage Rages (28 November 2007)
On Dec. 10 the IRS will announce that the Standard Mileage Rate for business use of personal vehicles will be 50.5 cents per mile effective January 1, 2008.

That's an increase of 2-cents over the 2007 rate of 48.5 cents per mile.

The deduction for miles driven for Medical purposes (such as going to doctor appointments) and for Moving, were actually DECREASED from 20 cents in 2007, down to 19 cents per mile in 2008.

For mileage driven in service of charitable organizations, the tax deduction rate remains at 14 cents per mile in 2008.

Standard Deduction Increasing In 2008 (24 November 2007)
Taxpayers who don't itemize deductions can always choose, instead, to take a Standard Deduction. For 2008 this amount will be $10,900 for married people filing jointly, and $5,450 for singles -- up from $10,700 and $5,350 respectively for 2007.

The Standard Deduction for dependents will increase slightly -- $900 for 2008, vs. $ 850 for 2007.

The Personal Exemption also will increase by $100, putting it at $3,500 in 2008, vs. $3,400 for 2007.

SECTION 179 (24 November 2007)
The "Section 179 Election" cap will increase to $128,000 for next year, vs. $125,000 in 2007. That's the amount of Capital Equipment purchases that you can write off in the year of purchase, rather than depreciating it over a number of years.

Parking And Mass Transit (24 November 2007)
Does your employer provide you free parking or reimburse you for mass transit commuting? If so, the limit for these tax-free benefits will be $220/month for parking and $115/month for mass transit in 2008. Both figures are a whopping five dollars per month increase over 2007 limits!

Per Diem (24 November 2007)
Meal Per Diem rates will remain the same for 2008 -- $58 per day for high-cost locations, and $45 in other areas.

Internet Taxes...
The ban on taxing Internet access, scheduled to expire this November 2007, has been extended for another 4 years. State governments were cracking their knuckles in anticipation of a fresh source of revenue. But that won't happen until at least the fall of 2011.

Deducting State Taxes (24 November 2007)
This year you will have a choice of deducting either State SALES taxes OR State INCOME Taxes paid, whichever is greater.

If you purchased a big-ticket item such as a car or boat, the sales tax option may be better.

I always ask to see which one should be used on your return.