The South Bay Tax Report
August 2014
The Daily Breeze, a newspaper serving Torrance,
Redondo Beach, Hermosa Beach, Manhattan Beach, AND
one of the greatest newspapers in the nation standing alongside the
New York Times, Los Angeles Times, and Wall Street Journal recently named
Wayland & Vukadinovich LLP
as one of the South Bay's Favorite Tax Preparers.
Actually, they named Gary Wayland as a favorite, but we're convinced they couldn't spell "Vukadinovich."
And "favorite" isn't as good as "Best" which is the award the Daily Breeze gave us two years ago, so we're happy
but we're not as happy as we were two years ago.
Nonetheless, thank you to those of you who took the time to actually FIND the Daily Breeze and their annual
"Best of the South Bay" poll
and register your vote, and
thanks even more if you voted for us - all three of you!
It's summertime, and
it's summertime in an election year so
not much is happening in the world of tax;
we'll keep this version of the summertime
South Bay Tax Report
short and simple.
Remember - unsubscribe if you tire of our relentless
self-promotion and humorless jokes by simply scrolling down to the bottom of this email and unsubscribing.
We'll miss you!
Here are this month's pressing questions.
My daughter just got married.
I had my knee replaced.
I had to buy a new car.
I've just been TOO busy.
When do I have to file my 2013 tax return?
Weddings, medical procedures, vacations to places Gary and Mike have only heard about - there's always something going on in our lives, right?
But extended tax returns MUST BE FILED by October 15th, and that doesn't mean you can slide them through the
Wayland & Vukadinovich
mail slot on October 14th so we can have them ready the next morning.
As we're fond of saying around here, we're not a dry cleaners with same day service!
Send us your tax information as soon as you can, even from your hospital bed after your knee replacement surgery.
We can't guarantee that we can finish your returns unless we have all information no later than October 1st!
Yikes!
I just received my property tax bill and
my property taxes skyrocketed.
What can I do?????
As California's real estate market is recovering, property holders are seeing notices from the county showing increased assessed values for property taxes.
Those of you who believe your property is overvalued may seek a reappraisal from your local county assessor's office. You may not need to file a formal appeal if you can find a local staff assessor who will talk with you.
Call the assessor's office as you're not likely finding one down on a bar stool at your favorite sports bar.
The assessor's staff can explain how they determined the value and review any additional information you can provide.
If you STILL disagree, then you must file an appeal with your local Clerk of the Board and the appeal must be filed no later than September 15. 2014
My son is headed to Calistoga State College.
I recently attended a fundraiser where I purchased a pair of socks worn by Theodore Roosevelt.
I paid $1,200 for the socks, they were valued at $500.
I can write off the $1,200, correct?
Those socks will make a great addition to your home office when you frame and hang them.
Alas, you CAN write off a portion of what you paid for them but you can only write off $700 -
the amount you paid in excess of the fair market value of the socks.
My son is headed to Calistoga State College
and the tuition is EXPENSIVE!
Can I get any tax credits or deductions?
You may want to determine whether you are eligible for one of the two education tax credits that cover common student expenses.
If you are eligible to claim both credits, you should choose the one that provides the greatest tax savings.
American Opportunity Credit
The American Opportunity Credit can save you up to $2,500 in tax for the education expenses of each eligible student. To qualify, the student must pursue a degree at a school that is eligible to participate in the federal student aid program.
Trust me, Calistoga State College is eligible.
The credit is only available to students in their first four years of attendance, who enroll at least half time for one academic period during the tax year.
The credit amount includes the costs you incur for tuition, fees and course-related books, supplies and equipment necessary to attend the institution.
That doesn't include beer, beach chairs, and and football tickets to see the Calistoga Galloping Wagons football team.
If the credit amount exceeds the amount of tax you owe, you can receive up to $1,000 of the credit as a refund.
Lifetime Learning Credit
Lifetime Learning Credits are available to all taxpayers who attend at least one course during the year at an institution eligible to participate in the federal student aid program.
It is not necessary that the student pursue a degree or certification to qualify, and it's available for any year of study. The credit covers the cost of tuition and fees plus any amount for books and supplies you are required to purchase directly from the school.
This credit is of particular value to those students attending postgraduate programs. As of 2013, the maximum benefit of the credit is $2,000. However, the lifetime learning credit is nonrefundable if it exceeds your tax bill for the year.
I just won the lottery!
After I finish my month-long celebration, I'll need to do some estate planning.
Can you tell me about estate taxes?
Mike and Gary are always available for celebrating lottery winnings, and once you find your way home after the festivities, make sure that your estate planning documents are completely up to date.
It's IMPERATIVE (and important!) that your will, your trust, your durable power of attorney, your IRA beneficiary designation, and any other estate planning documents
ARE CURRENT!!!
Remember (oh wait, we forgot you had a lottery celebration) that The American Taxpayer Relief Act of 2012 permanently provides for a maximum estate tax rate of 40%.
The exemption started at $5 million but -
through those inflation adjustments the IRS is fond of using - has now increased to $5.340 million of assets for each spouse, a total of $10,680 million for a married couple.
For those of you in California,
remember that California does not have an estate or gift tax.
I'm feeling lucky.
What are my chances of being audited?
Well, the IRS has recently released data on the frequency of audits performed in 2012 - yes, we know it's 2014, but remember that we're talking about the US Government.
In 2012, we taxpayers filed 143,399,737 individual tax returns
(Wayland & Vukadinovich LLP prepared 142,000,000 of them) and the IRS audited about 1,481,000 of those filed or about 1% of the total returns.
About 338,000 of you had income of more than $1 million - the IRS audited 40,965 or about 12% of you.
I've been a client for years
I've mailed my tax information in every year,
but I've never met Gary and Mike
Do they actually exist?
Yes!
We're not like H&R Block who died years ago.
Gary and Mike exist.
We've attached proof, a recent picture of their participation in a local 10K race.
It will be difficult to spot them in the picture as they are running incredibly fast but look closely,
and you likely can see them.
They're both modest so they won't reveal where they finished in this race, but you can see all of the runners behind them.
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