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Important Filing Dates

 

 

  September 15

Extended 2010 corporation income tax returns are due

 

Extended 2010 partnership tax returns are due

 

September 15

3rd Estimated Federal and California estimated tax payments due

 

 

October 15

Extended 2010 personal returns due

 

October 31st

3rd Quarter payroll tax returns due

 

December 15

Appointment calendar for 2011 tax season appointments opens

 

2011 Organizers become available for both mail and electronic versions - call to let us know you'd like one

 

 

January 15 2012

Final 2011

Estimated Tax Payments due

 

 

 

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 The South Bay Tax Report  
August 31, 2011
 

 

 

Wayland & Vukadinovich LLP

Named as the South Bay's Best Tax Preparer

by The Daily Breeze 

  

 

IRS Continues to Increase Audits

The number of federal individual income tax returns examined by the Internal Revenue Service has continuously increased over the past five years, with 1 out of every 90 taxpayers examined in fiscal year 2010. That's up 23% from fiscal year 2006 when 1 of every 103 individual returns was examined. The IRS has increased the overall use of enforcement tools such as liens, levies and seizures.

The IRS has increased the number of audits by mail. Only 1 out of every 503 individual returns filed got a face-to-face examination in fiscal 2010 while 1 of every 110 returns got an audit by mail (an increase of 8% over fiscal year 2009).

 

The Financial Crisis and Millionaires

The financial crisis reduced the roster of American millionaires by nearly 40%, according to the Internal Revenue Service. In 2007, 390,000 people filed tax returns reporting incomes of $1 million or more. In 2009, just 237,000 did. The number of filers with incomes of $10 million or more dropped by 55% from 2007 to 2009.

   

529 Plans - Saving for College Tax-Free
Anyone - parents, grandparents, or friends - can establish 529 plans for prospective college students. Whoever sets up the account remains in control of the money until it is spent.
All 50 states have plans and they differ in many ways - you can invest in any state's 529 plan. To check out the different plans, go to www.savingforcollege.com
The IRS allows money from a 529 to be spent tax-free on tuition, fees, books, supplies and required equipment. Room-and-board expenses are also allowed but only up to the amount the school specifies to the federal government.
You cannot spend 529 funds on activity fees, insurance and other costs not required for enrollment.
Be careful how much money you take from your 529 plan. If you withdraw more than is needed to pay the qualified expenses, you will have to pay income tax and a 10% federal penalty tax on the ineligible withdrawal.

  

Property Tax Appeals

The real estate market has likely played havoc with many of our property tax assessments. Remember, if you believe your assessment is in excess of the fair market value of your property, you can file an assessment appeal.

 For assessment appeals, most counties have a filing period that begins July 2nd and ends either September 15th or November 30th depending on whether the county assessor mails notices by August 1st.

For a less formal request for decline in value reassessment (which is a great way to go...), the filing periods begin once new assessed values are made public which is usually around the first week of July.

Note that the assessment appeal application is submitted to the County's Assessment Appeals Board, which is made up of hearing officers typically appointed by the County's Board of Supervisors. The decline-in-value reviews are submitted directly to the County's assessor's office.

 

Planning for the New 3.8% Medicare Tax on Unearned Income

Effective 2013, the Health Care and Education Reconciliation Act of 2010 will subject SOME individuals to a 3.8% Medicare contribution tax on unearned income. This new tax will apply to single taxpayers with a modified adjusted gross income in excess of $200,000 and married taxpayers with a modified adjusted gross income in excess of $250,000.

Net investment income includes interest (but not tax-exempt interest income), dividends, annuities, royalties, and rents. It also includes income from a passive activity.Net gain attributable to the disposition of property other than property held in an active trade or business is subject to this tax. 

 

Privacy Requirements

Many of you request that we provide copies of tax returns we file for you to banks, loan brokers or other financial organizations. Please note that, due to Federal privacy guidelines, we are not allowed to provide information to 3rd parties without a formal authorization with AN ORIGINAL signature. Therefore, we usually honor your requests by providing the tax return copies to you directly so that you can forward the information on to the 3rd party. Note also that we do not charge a fee for providing electronic copies of your tax returns, but it often takes at least one business day before you will receive a link to a secure portal which will provide you with the information you have requested.
  
S Corporation Shareholder Compensation
How Much is Enough?
If you are the owner of an S corporation, be sure you review your wages or payroll for 2011 - remember, the IRS is insistent that shareholders receive fair market value compensation (and pay social security tax) for their efforts, and it is imperative that S corporation owners review their compensation to make sure all distributions have been properly handled.
We're here to help in case you have questions.

 

Late breaking news from the 
California Franchise Tax Board
The Franchise Tax Board has recently announced that they are planning to add a line to California tax schedules asking taxpayers who deduct property tax to list the address and parcel number of the property. There will apparently be language cautioning taxpayers that certain payments, such as payment you may make for Mello-Roos bonds, are not deductible.     

Wayland 2Contact Us

 Visit our website:

   

 Gary Wayland - gary@wvcpas.com
Mike Vukadinovich - mike@wvcpas.com
Susan Patterson - susan@wvcpas.com
Sonia Tramel - sonia@wvcpas.com
Midge Leatherbury - midge@wvcpas.com
Debbie Reasor - debbie@wvcpas.com
Gina Stevens - gina@wvcpas.com
 

Certified Public Accountants
1097 Aviation Blvd
Hermosa Beach CA 90254
(310) 376-0455   (310) 379-4523 fax

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