Oh, the Questions we Get.....

(Part II)

We're still in the summer mode here at

Wayland & Vukadinovich LLP.

That means we're generally in shorts and flip-flops.

Who are we kidding?

We're almost always in shorts and flip flops but it seems like it's more appropriate to be in shorts and flop flops during the summer.

In any event, it's STILL summertime and we've decided to reprise last month's successful newsletter feature

 "Oh, the Questions we Get."

We've got new questions, we have old questions,

and if you are lucky,

we will give you the same old answers to

those old questions.

Enjoy!

I'm cleaning out my garage.

I've got tax receipts and tax returns stored which date from what appears to be the Civil War.

How far back do I need to keep records?

Well, Mr. Lincoln, it's generally a good idea to keep tax returns indefinitely, but you can usually shred those supporting documents (like checks, credit card receipts and bank statements) after four years.

I attended a charity auction this weekend.   

After dinner and far too much wine, I visited the silent auction table and purchased a vacation package for a weekend in Death Valley.

I paid $300 for what they say is worth $600.

I can write the $300 off my taxes, right?

 No - sorry, unless you invite us here at

Wayland & Vukadinovich LLP

to enjoy the weekend with you,

the $300 is not deductible.

Purchases at charity auctions are only deductible when you pay MORE than what the item is worth,

and then you can only deduct the amount you paid in excess of the value of what you purchased.

Enjoy your trip - they say it's always a dry heat.

You people seem quite competent.

Are you taking on new clients?

First - thanks for noticing.

Mike and Gary each have over 30 years of tax preparation experience.

Our senior tax manager,

Susan Patterson,

has over 10 years of experience and

tax senior accountants

Shelly Milam and Sonia Tramel 

combined have over 20 years of experience.

We have far too much experience, far too many gray hairs, and far too little patience around tax deadlines,

April 15th and October 15th.

That being said, we're happy to talk to those you refer to us. Our fees start at $400 and fees for returns increase based on the complexity of the returns we prepare.

Tell them about us and send them this newsletter so they know we walk around the office in shorts and flip flops.  

If they are still interested, they can call us.

Can I book an appointment with you this Saturday at 6pm?

Seriously?

We're generally open from 8:30AM to 4:30PM Monday thru Friday.

Mike and Gary spend Saturdays and Sundays reading extremely important tax periodicals and magazines.

That's our story and we're sticking with it. 

My son / daughter has started college.

Can I deduct college his/her tuition? Books? Computers and supplies? The beer he/she tells me he/she is not drinking?

It's a good thing that your son/daughter is headed to Harvard as he/she will need an Ivy League education to navigate the college tax breaks.

There are three main tax breaks to consider:

You may qualify for the American Opportunity Tax Credit, which offers a $2,500 tax credit per student.

This is the best credit available.

You might qualify for the Lifetime Learning Credit, a less valuable credit which allows you to reduce your taxes by up to $2,000 per return.

Finally, the tuition and fees deduction lets you deduct up to $4,000 from your taxable income.

Remember that deductions, which reduce income, are worth less than a credit which lowers your tax bill dollar for dollar.

Making this entire process more difficult is that all three tax breaks have different income limits and eligibility requirements on the types of educational costs they will cover.

You can either call us here at Wayland & Vukadinovich for clarification or wander through IRS Publication 970 which will explain the rules and allow you a good night's sleep.

And, just for the record, the beer is not deductible.

A real estate broker just told me I can sell my house for $1 million

I can buy a new house and not pay taxes on the gain, right? 

Let's pretend that you bought your house back in 1992 for $50,000 (lucky you!!!)

If you sell the house for $1 million, you have a $950,000 gain and you certainly have the IRS attention.

Under current rules, you can exclude as much as $500,000 of the gain (if you are married), but the example above indicates that you would still be taxed

on about $450,000 of gain

EVEN IF YOU BUY A NEW PERSONAL RESIDENCE.

This year, tax rates on sales of capital assets have increased on many taxpayers and you may be subject to the 3.8% Medicare tax if your income is above the limit - so make sure you understand the rules before you sign the sales agreement.  

Call us, and make sure you understand the tax you might owe before you agree to sell the house.

Some Late Breaking Tax News...

The Internal Revenue Service and the US Department of the Treasury just announced

(in Revenue Ruling 2013-17)

 that same-sex couples, legally married in jurisdictions that recognize their marriages,

 will be treated as married for Federal tax purposes.

The ruling specifically states that it applies only to "legally married" same-sex couples, and not to registered domestic partnerships, civil unions, or similar formal relationships recognized under state laws.

However, it does apply regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

These taxpayers MUST file their 2013 federal income tax returns using either the married fling jointly or married filing separately filing status.

For years prior to 2013, these taxpayers may, but are not required to, file amended returns choosing to be treated as married for federal tax purposes.

And Gina reminds us.....

Gina, our office manager, makes sure that our tax world here at Wayland & Vukadinovich LLP

 runs likely a finely tuned Swiss (ok, Hermosa Beach) watch.

She reminds us to remind you to tell us when you move, when you change email addresses, or telephone numbers, when you marry, have a new child or just want to say hello.

We're here - we're tax accountants, we have no other lives.

That's it for this month.

It's an abbreviated summer and holiday shortened version of the

South Bay Tax Report.

We'll start our year-end tax planning issues with our September 30th newsletter.

For now, enjoy your summer and call or email us with questions you would like answered in the

South Bay Tax Report.

We attach below our favorite view of Hermosa Beach's annual Arts Fiesta, held this past weekend in beautiful downtown Hermosa Beach

Enjoy your summer!

Just one final note -

We've redesigned our website; it's still a work in progress but it's up and running.

Visit it at

Wayland & Vukadinovich