Archive for the ‘Uncategorized’ Category

Planning on Using Turbo-Tax This Year? Think Again.

Saturday, November 26th, 2016

http://www.marketwatch.com/story/when-you-should-hire-a-tax-pro-2016-03-09

 

Due to the anticipated tax reductions from a Trump Administration  and Republican Congress, year end planning and 2016 tax return preparation  will provide significant tax savings opportunities.  Therefore self-preparing your 2016 returns may end up costing you more than you think.        

http://www.hcvt.com/insights-articles-44.html

www.hcvt.com

 

              

         When should you hire a tax pro?

    By                

Published: Apr 18, 2016 8:02 a.m. ET

More than 50 million Americans prepare their own taxes, but that doesn’t mean you should

                                
Bill Pugliano
You probably won’t find this guy entering numbers into Turbo Tax.

                                         By

                                        DanielGoldstein

Personal finance reporter

Of the nearly 151 million individual U.S. income tax returns filed in 2015 for the 2014 tax year, more than 50 million were prepared by individuals — and not tax professionals — a jump of more than 5% over 2014, the IRS says

And that trend appears to be continuing in 2016. So far through April 1 of this year, the IRS says that self-prepared returns are up 3.5% over the same period in 2015, with returns filed by tax professionals falling 3.7%. And many people filing on their own use online tax-prep software.

If you go with a certified public accountant (CPA) or other tax professional, the cost of the return could jump to over $1,000. (A registered tax preparer can do your return but only has limited ability to represent a taxpayer if complications come up, and while CPAs can represent you before the IRS, only the highest tax experts, Enrolled Agents, can actually represent you in tax court. EA’s that aren’t lawyers though have to pass a test administered by the court before they can do so.)

With that in mind, here’s a list of the scenarios when you might be better off seeking a professional:

1. You’re rich: If you’re single and making more than $250,000 — or married and making more than $300,000 jointly — it’s probably time to bring in a tax pro. “Many deductions, credits and exemptions begin phasing out near these levels and tax planning can yield significant results,” says Blake Christian, partner and CPA with the accounting firm of Holthouse, Carlin & Van Trigt LLP in Long Beach, Calif. In addition, beginning in the 2014 tax year, high-income taxpayers may also have to pay a 0.9% additional Medicare tax on wages over $200,000 ($250,000 for joint filers), says Perlman of H&R Block’s Tax Institute.

2. You’re retired: If you’re within a few years of retirement, it’s worth consulting a CPA or a tax professional to maximize retirement funding and evaluate how long your retirement and other funds will last. Retirement to another state or to a foreign country needs to be looked at carefully since there are often numerous state and federal issues, such as mandatory minimum distributions taxability of pensions and other qualified plans, taxability of a home sale, and cost of living and medical issues, says Christian.

3. You’re Elon Musk: Checking with a tax pro when you plan to buy or sell a business often ensures that the company being sold is tidied up and the business can be sold in a tax-efficient manner. A CPA or other tax guru can recommend the most efficient tax structure for the sale of a business or the formation of a business, when assets may need to be removed, when it’s necessary to cut costs, and when employee contracts should be reviewed and updated. If you manufacture or process items in the U.S. — The Domestic Production Activity Deduction can offer significant federal tax savings, Christian said.

4. You’re moving: Whether it involves an intra-state or inter-state move, you’ll probably need the help of an accountant to take advantage of every tax break. “Hundreds of special tax incentive zones, local and federal tax incentives for hiring and investing in specific regions can be secured with proper planning,” says Christian. In addition to filing other states’ returns, you may have to file some type of annual report on business ownership and activities and pay a fee, says Perlman. “Most states have income-allocation rules based on factors such as receipts, payroll, and real estate,” she says. Taxpayers can also generally claim credits in their state of residence for taxes paid in other states, Christian adds.

5. You do business in foreign countries: “Foreign business structures may be taxed differently in the U.S. than you might expect,” says Perlman. “For instance, a foreign corporation may be taxed as a partnership in the U.S.,” she says. In addition, if you are a U.S. citizen or resident, you must report all of your foreign income, even if you’re allowed to exclude all or most of your foreign earned income or you would qualify for a foreign tax credit, she says. Earned income, as well as investment income, have many complex federal and state treatments and planning opportunities, says Christian, including deducting or claiming a credit for taxes paid in other countries.

Even if you only operate in the U.S., but export U.S. manufactured products, you can reap valuable benefits by establishing an Interest-Charge Domestic International Sales Corporation, says Christian.

6. You bought a yacht — or a plane: Big ticket item purchases such as your personal residence, a vacation home, a boat, a high-end car, or a plane should involve a CPA as there are methods for minimizing costs, including sales and use tax, says Christian. Check with a CPA too if life insurance, annuities, or investments are going to be purchased or sold off.

7. You’re planning your estate: Even if you’re under the federal $5.45 million exemption (2016) for estate taxes, it’s worth talking to a tax professional to help with asset protection, since many states have different thresholds and other fees of settling the estate. (probate fees)

“Reviewing how assets will be distributed and may be revalued for tax purposes upon the death of the decedents is critically important with estate taxes lower than combined income tax rates to beneficiaries in certain states,” Christian said in an e-mail. Also, Christian notes that there are annual gift tax exclusions of $14,000 per donor or beneficiary which can allow tax-free transfers without using up your lifetime estate exemption.

8. You’re an Internet millionaire (or on paper): Can you explain the Black-Scholes method of determining the value of your stock options, if you’re lucky enough to get them? If not, check with a tax professional. “Whenever a taxpayer exercises or even holds any company stock options or is getting compensated from an employer with equity or assets other than cash, a CPA should be consulted,” says Christian. “They will never get this right on their own.”

9. You’re Lord of the Manor: Even a simple residential rental property requires extensive record keeping and proper reporting of income and expenses, says H&R Block’s Perlman. “You need to be mindful of special rules involving passive losses, renting of your personal residence or vacation home, and new depreciation rules,” she says. Other issues, such as bonus depreciation, repairs and maintenance rules could also trip you up, says Christian. In addition, if you’re a homeowner, there are dozens of tax breaks available that a tax professional may know about that you don’t.

10. You don’t know the new laws: Did you get an invite to the NIIT? A new (2014) assessment called the net investment income tax (NIIT) of 3.8% may apply to income from dividends, interest, capital gains, and even rental activities. “It’s important to understand when the tax applies (and when it doesn’t) and what strategies may be appropriate to minimize it,” says Perlman. And as the Supreme Court has recognized same-sex marriage and as states comply, couples may file federal tax returns using a married filing status.

 

How Will Trump’s Presidency Impact The Economy?

Saturday, November 26th, 2016

http://www.lbbizjournal.com/single-post/2016/11/21/How-Will-A-Trump-Presidency-Affect-The-Local-Economy-Long-Beach-Business-Leaders-Weigh-In

 

Blake Christian, CPA/ MBT, Holthouse Carlin & Van Trigt LLP

President-elect Trump has made it clear that he will be focusing on infrastructure projects during his first 100 days, so hopefully some of the long overdue projects in Long Beach, such as the 710 Freeway, will get some funds.

 

If Mr. Trump takes a hard line and directs the Secretary of the Treasury to label China a “currency manipulator,” we might see a short-term trade embargo from the Chinese side, which would negatively impact the port traffic, and also impact U.S. exporters – and possibly manufacturers using imported raw materials.

 

Tax reform is also at the top of his list and, since he will have cooperation of the House and Senate, we will likely see some quick tax reform, including a decrease in personal (maximum 33%) and business tax (15%) rates, as well as a promised favorable 10% rate on foreign earnings that are brought back onshore. Congress will undoubtedly challenge the new president with respect to the trillions of dollars of deficit increase these tax cuts will cause. Therefore, the ultimate tax changes will likely not be as dramatic as Mr. Trump has proposed.

 

From a public safety standpoint, President Trump will be pushing to pass the Restoring Community Safety Act, which is focused on reducing surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increase resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars. While Long Beach crime is down in most areas, this bill, if passed, may offset some of the negative impact anticipated from the recent passage of Proposition 57.

 

One final thought. Trump’s focus on improving the Veteran’s Administration should benefit our local VA hospital and possibly Fisher House also. He mentions both fairly regularly.

 

How Will Clinton and Trump Impact Your Personal and Business Taxes?

Friday, November 4th, 2016

http://www.lbbizjournal.com/single-post/2016/10/10/Presidential-Tax-Platforms-%E2%80%93-More-ClintonTrump-Contrasts

Hillary vs. Trump – Tax Policy Platforms

Friday, November 4th, 2016

http://www.hcvt.com/insights-articles-44.html

Hillary and Donald have dramatically different tax and economic plans.

Know their positions before you vote.

Federal Taxation of U.S. Olympic Medalists

Monday, August 29th, 2016

U. S. Taxation of Olympic Medalists – You Cannot Outrun the IRS

 

Both the Olympic medals and cash received from the US Olympic Committee generate tax liabilities for the Rio athletes.   Congress has attempted to exempt these earnings and awards, but has been unsuccessful thus far.

 

Clinton vs. Trump 2016 Presidential Tax Platforms

Monday, August 29th, 2016

http://www.hcvt.com/insights-articles-44.html

Take a guess who is proposing to raise income tax rates up to 47.6% for ordinary income and capital gains on assets held less than 2 years.  Of course, if you make less than $5 million of AGI, your rates drop to a bargain of 43.6% under a Hillary Clinton presidency.   Donald Trump would remove the 3.8% Obamacare tax, eliminate estate and gift tax, eliminate the personal and corporate Alternative Minimum Tax (AMT) – resulting in top rates of 33% for individuals, 20% for long term capital gains and qualified dividends, and 15% for corporate and flow-thru S Corps and LLCs.

Green Party Candidate, Gary Johnson, would eliminate the personal and business taxes and eliminate the IRS – but don’t get too excited, he would replace these taxes with a whopping 23%+ National Consumption/ Sales Tax – which would be on top of your state sales tax.

For more info, check out all our firms’s articles and tax alerts at: www.hcvt.com

 

 

 

 

 

 

Cost Effective Marketing Strategies for CPA Firms and Other Professional Service Firms

Friday, July 19th, 2013

CPA Firm Best Practices.

AICPA CPA Advisor Newsletter (July 2013)

Seven techniques to stretch your marketing dollars and impove your marketing effectiveness.

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2013/CPA/Jul/MarketingDollars.jsp#.Ueh1ZxKMMJE.facebook

C Corps vs. S Corps and LLCs – C Corps Worth a Second Look With 2013 Individual Tax Rate Hikes

Sunday, March 24th, 2013

I am not suggesting that taxpayers convert their pass-trough entities to C Corps, but with the fedeal and California bump in rates, it may be worth evalauting a C Corp for any new operations. This works best for capital-intensive operations holding assets that are not likely to appreciate. Double-taxation on exit must be evalauted. Annual savings can make this move compelling.

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2012/CorpTax/CCorporationsVogue.jsp

California Veterans Get Business Lift From the State

Monday, February 22nd, 2010

California has a very large percentage of military veterans (over 2.1 million) and over 10% suffer from some form of physical or mental disability.  Projections indicate a big spike in these numbers for California in coming years.

The state of California, as well as numerous other states, have a variety of programs to provide a helping hand to these service-disabled Vets.

As discussed in the link below, Los Angeles Times’ business reporter Cyndia Zwahlen provides a summary of the ways California is taking care of these business owners – including striving to allocate at least 3% of the $9 billion of government contract and purchasing commitments to businesses owned by disabled Vets.

http://www.latimes.com/business/la-fi-smallbiz-vets22-2010feb22,0,7826455.story

Also read more about the valuable state and federal tax benefits available for employers of Vets in this 2009 AICPA article.   Veterans receiving food stamps, or those who have been discharged and unemployed during the last year can generate tax credits from $2,400 to $4,800 for a future employer – making Vets an attractive solution for hiring needs.

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2009/CorpTax/HireVeteran.jsp

Additional hiring credit information is also avaialable at:

www.blakechristian.com

Eco Credit Webinar – Friday, Jan. 22, 9:00 am PST – Energize Your Tax Planning With Energy/ Eco-Credits

Thursday, January 21st, 2010

http://www.blakechristian.com/energy_tax_credits.html

The above link and related articles will provide you with an overview of the wide-variety of valuable, but often overlooked, federal and state energy and pollution-control equipment credits.

These credits typically range from 10% to 50% of the “qualified” cost of the equipment (excluding installation) – but in some limited cases can be as high as 100% of the equipment cost.

Technology is changing at a rapid pace and so are the tax incentives.  New credits are being considered every week at the state and federal levels; therefore, it pays to do your research and fully understand these benefits before you make the capital investment.

These credits can dramatically reduce the cost of being an early adopter of these cleaner, yet more expensive, processes.

To participate in a comprehensive eco-credit webinar on Friday, January 22nd at 9:00 am  PST, or to access the archived webinar if you miss it, please click the following link:

http://www.cpelink.com/product/detail.php?p=1610