News of Interest
December 31, 2014 – Tax Increase Prevention Act of 2014
After much anticipation, Congress has passed the Tax Increase Prevention Act of 2014 (2014 Tax Prevention Act) to extend popular individual and business tax provisions retroactively for one year (through 2014). This one-year retroactive extension allows you to claim many popular tax incentives that expired on December 31, 2013 on your 2014 tax return. Read more...December 22, 2014 – Year-End Planning
With January 1, 2015 fast approaching, the window for possible tax saving moves for 2014 is closing. Of course, every taxpayer´s situation is different but there are some general approaches that can be considered. Some last-minute year-end tax strategies may include spreading the recognition of income between 2014 and 2015, harvesting losses, making tax-free gifts, and making charitable donations. Individuals also need to review their compliance with the Patient Protection and Affordable Care Act. Read more...December 12, 2014 – 2014 & 2015 Standard Mileage Rates
The Internal Revenue Service recently issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 57.5 cents per mile for business miles driven, up from 56 cents in 2014
- 23 cents per mile driven for medical or moving purposes, down half a cent from 2014
- 14 cents per mile driven in service of charitable organizations
November 21, 2014 – Tax Benefits for Education
Tax credits, deductions and savings plans can help taxpayers with their expenses for higher education. A tax credit reduces the amount of income tax you may have to pay. A deduction reduces the amount of your income that is subject to tax, thus generally reducing the amount of tax you may have to pay. And certain education savings plans allow the accumulated earnings to grow tax-free until money is taken out (known as a distribution), or allow the distribution to be tax-free, or both. Read more...November 5, 2014 – New College Access Credit
A new California personal and corporate tax credit is available for the 2014 through 2016 tax years for contributions made to the College Access Tax Credit Fund. The credit will be available to taxpayers who make cash contributions to the fund and who receive a credit certification and allocation from the California Educational Facilities Authority (CEFA) in the State Treasurer´s Office. The fund will be used to bolster the dwindling resources used to provide Cal Grants to low-income college students. Read more...October 28, 2014 – Health Care Exemptions
In spite of the Affordable Care Act´s mandate that individuals without health insurance must pay a tax, there are 33 exemptions including 14 hardship exemptions. Certain exemptions including hardship exemptions must be approved by the state´s health care exchange and the taxpayer must receive a certificate number to enter on their tax return prior to filing. To obtain the exemption, individuals must first submit an application to the exchange along with the necessary documentation. The process takes at least two weeks, and may take considerably longer if individuals delay their applications and April 15 closes in. The full list of exemptions can be found HERE. The application for exemption can be found HERE.September 19, 2014 – Important 2014 Third Quarter Federal Tax Developments
During the third quarter of 2014, there were many important federal tax developments. We highlight a dozen areas that may have significance for you. Read more...August 27, 2014 – 2014 California State Income Tax Rate Schedules Adjusted
The Franchise Tax Board (FTB) has released the 2014 state tax brackets. Brackets are “indexed” each year by adjusting them to reflect changes in the California Consumer Price Index (CPI). Filing requirement thresholds, the standard deduction and certain credits were adjusted along with income tax brackets based on the inflation rate of 2.2%, as measured by the California CPI for all urban consumers from June 2013 to June 2014. Last year California had an inflation rate that measured 1.7%. Read more...August 21, 2014 – August 21, 2014 – One-Rollover-Per-Year Limitation on IRA
Under current tax law, an individual is allowed a tax-free rollover of an IRA provided the funds distributed to the individual are rolled over into another IRA for the individual´s benefit within 60 days, subject to the one-rollover-per-year limit. The IRS has also allowed an individual with more than one IRA to treat each IRA separately, thereby allowing more than one tax-free rollover per taxpayer when properly executed. That is about to change. Read more...June 4, 2014 – Important 2014 First Quarter Federal Tax Developments
During the first quarter of 2014, there were many important federal tax developments. Here we highlight some of the more significant developments concerning tax reform, the Affordable Care Act, repair regulations, virtual currency, international regulations, and more. Read more...May 14, 2014 – Post-Filing Season Federal Tax Developments
Over the past few months, our focus has been on the federal income tax return filing season, preparing your individual return, and filing your return. The end of the filing season (except for taxpayers on extension) is an excellent time to turn your attention to next year´s deadline for filing your 2014 return. Read more...May 7, 2014 – IRS Reiterates Warning of Pervasive Telephone Scam
On April 15, 2014, the IRS issued another strong warning for consumers to guard against sophisticated and aggressive phone scams targeting taxpayers, including recent immigrants, as reported incidents of this crime continue to rise nationwide. As these scams are not likely to end with the filing season, the IRS urges everyone to remain on guard. Read more...February 3, 2014 – Benefits of 529 Plans
With college tuition costs constantly on the rise, taxpayers with dependent children are searching for any and all means they can use to save money for education. One way that Congress and the IRS have established for parents to save money for college is through the 529 plan. A 529 plan (also referred to as a qualified tuition program) is an educational savings option operated by a state or educational institution, with tax advantages that make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild. Read more...January 27, 2014 – 2013 Federal Tax Year-In-Review
As 2014 begins, it is a valuable time to look back at some of the important federal tax developments in 2013 and their impact on the new year and beyond. Some of these developments were anticipated; others were surprises. In nearly all cases, the developments open tax planning opportunities. Read more...January 21, 2014 – 2013 Fourth Quarter Federal Tax Developments
During the fourth quarter of 2013, there were many important federal tax developments. This article highlights some of the more significant developments for you. Read more...January 15, 2014 – Mortgage Debt Relief on Principal Residence Short Sale
The Franchise Tax Board has updated their website to include information about mortgage debt relief for taxpayers who sold their principal residences through a short sale in 2013.According to an IRS Information Letter dated September 19, 2013, the IRS determined that California taxpayers who sell their principal residences for less than what is owed through a short sale do not incur COD income. The FTB guidance confirms that California will follow this treatment.
The FTB clearly states that the IRS guidance is limited to California short sales only, and that the IRS guidance did not specifically address other types of real estate transactions, such as non-judicial foreclosures and mortgage loan modifications.
To view the new information on the FTB website, see FTB Mortgage Debt Relief Law. If you have questions on cancellation of debt rules as they may apply to you, please feel free to call our office.
See 2013 news items