The South Bay Tax Report
January 2016
The New Year's Resolution Edition
We here at the international headquarters of
Wayland & Vukadinovich LLP
wish you a very happy and tax-efficient new year.
We suspect you partied until dawn, ringing in the new year.
For the record, Mike spent New Year's Eve making coffee in the new firm coffee maker AND reading the details of the recently passed "extender" legislation that Congress passed JUST before Christmas.
Gary, not a coffee guy, slurped hot chocolate as he reviewed the new regulations on repair costs.
Clearly, we're not very fun at parties but we know how to complete those 1040 forms.
So, here it is, the first week of the New Year, and we suspect that you've already made and broken a dozen resolutions, but here's yet another chance- your 2015
(because these resolutions can be retroactive!) and 2016
Tax Resolutions!
If you drive for business -
You can resolve to keep a mileage log indicating where, how far, and why you drove for business. You can also resolve to remember that business mileage is reimbursed at 57.5 cents per mile in 2015 but those Grinches at the Internal Revenue Service dropped the rate to 54 cents per mile in 2016.
If you teach -
You can resolve to keep track of unreimbursed teaching expenses as you can deduct up to $250 in both 2015 and 2016.
Those jolly members of Congress passed "extender" legislation on December 18 that made that deduction retroactive for 2015 and kept it in place for 2016 and beyond.
If you are a member of Congress -
You can resolve to pass 2016 tax legislation EARLY in 2016 rather than waiting until Santa is JUST about ready to leave that coal in your stocking.
This year, Congress passed major extender legislation for 2015 on December 18, 2015.
And while that might SEEM late, it's actually the earliest they've passed the legislation in ten years!
If you have a Health Savings Account ("HSA")
You can resolve to make your 2016 contribution early. The 2016 limits are $6,750 for Family plans and $3,350 for self-only plans with an additional "catch-up" contribution of $1,000 if you are over that magic age of 55.
Ah yes, 55 - you're too young for those snappy senior discounts but NOT too young for a catch-up contribution for your health savings account.
If you have children in college
Seriously?
You have children in college?
You don't look that old! -
You can resolve to locate that IRS Form 1098-T that likely was sent to the apartment your son/daughter was in four apartments ago as you will need that 1098-T to be able to claim the credit or deduction.
Check his backpack, his used 2005 Camry and those college textbooks that you paid for but he never opened should you not have the 1098-T.
Congress was kind to those of us with college students by extending the American Opportunity Tax Credit permanently but you MUST have the 1098-T sent to you from your child's university in order to take the credit.
If you are actually thinking about organizing your tax data this year -
Yes, we know.
Some of you believe it's much easier to come in to your appointment with
Wayland & Vukadinovich LLP
with an open mind and no details as we pull together your 2015 tax filings.
Receipts?
Why bother?
Summaries of expenses?
Let's use last year's,
but we at
Wayland & Vukadinovich LLP
and our good friends at the Internal Revenue Service and the California Franchise Tax Board would prefer that we use ACTUAL numbers, not estimates, so perhaps you can resolve this year to actually organize those receipts.
We can help!
Contact us for organizers.
We have short-form organizers.
We have long-form organizers that show what you deducted last year.
We have long-form electronic organizers where you can drop information in electronically.
(Isn't technology wonderful?)
You can even use your own organizer!
In many cases, you can actually provide us everything we need without coming to
Hermosa Beach,
(the original home of surfing).
(Well, yes, those surfers down in Huntington Beach like to claim THEY are the home of surfing but don't you believe them!).
Reach out to Gina (at Gina@wvcpas.com).
She's ALWAYS in a pleasant mood this time of year.
She can provide organizers.
You can also schedule appointments and receive organizers by emailing or calling
Madison (at Madison@wvcpas.com)
If you receive a Social Security
Statement of Earnings -
You can resolve to review it to
(a) understand what your benefits may be,
(b) check to make sure those kind people at the Social Security Administration have given you credit for all of your earnings, and
(c) make sure you have sufficient earnings credits to qualify for Medicare and Social Security.
Remember, these days Social Security will mail you an earnings statement in five-year increments - such as when you turn 25,30,35, etc and annually once you hit age 60.
Review that statement!
Understand that statement!
Go with the Force!
Oops. sorry, we saw Star Wars over the holidays.
If you are a spy, a drug kingpin or just simply have a foreign bank account -
You can resolve this year to report any foreign bank accounts that you have (with a balance of $10,000 or more any time during the year) on the US Treasury's Form FIN CEN 114.
You can also resolve to tell us about that bank account and any other foreign assets you have so that we can properly report them on Form 8938 on your 2015 personal income tax return.
Penalties for not filing the FIN CEN 114 and the Form 8938 can be HUGE and can dent your personal balance sheet, even if you are a drug kingpin.
If you intend to make an appointment with us this tax season -
You can resolve to contact us early to lock down that appointment time and date.
Calling us on April 13th and asking for an appointment that afternoon generally doesn't work unless you are Mike or Gary's wives.
Contact us early - we've fixed the link on our website so you can request an appointment thru the website now.
You can contact Gina or Madison in our office;
we gave you their emails above.
Make sure you let them know when you would like your appointment, as saying
"any time in 2016"
tends to prolong the appointment process.
Make sure you actually need to come in and see us. Remember, Gary and Mike are getting older, it's not a pretty sight and you may not want to see what they look like these days!
If you have a child who has earned dividends and interest in 2015 -
You can resolve to actually understand the
"Kiddie Tax."
No - we don't tax your cat.
This tax is on "unearned "investment income such as dividends, interest and capital gains above $2,100 in 2015.
Let's see if we can - quickly - explain it.
Under those oh-so-simple IRS rules, the first $1,050 of a child's investment income is exempt from tax.
The next $1,050 of investment income is taxed at the child's rate, which, unless he/she is
Warren Buffet's grandchild, is likely quite low.
Investment income is excess of $2,100 is taxed at YOUR rate.
Be sure you let us know if you have a
"Kiddie Tax"
issue.
If you intend to extend your tax return -
You can resolve to contact us prior to April 15th if you would like us to prepare and file your extension.
Remember, the extension is automatic but it is only an extension of time to FILE, not an extension of time to PAY your taxes, so if you think you will owe some money this year, we need to estimate that amount AND send it along with the extension.
If you'd like us to file an extension, contact Emily at emily@wvcpas.com.
If you intend to send us your tax information electronically this year -
You can resolve to contact us so that we can provide you with a link to SmartVault, our cloud based and encrypted file storage system.
Remember, for security reasons, we don't open ZIP files, we don't visit "Dropbox" or "Box " sites, so please use your SmartVault to send us information you want to protect.
If you want to try something different this year -
You can resolve to ask us about
Intuit LINK -
Intuit LINK is a new online tool for data collection.
We can send you a request thru the LINK, indicating what data we need based on last year's return.
You can return that information with electronic attachments and/or answers to our questions, and - most importantly - it is secure.
Here's your chance; step out of your comfort zone, impress your children with your technical savvy and become the coolest taxpayer on your block.
Let us know if you would like us to invite you to
LINK.
This is our last South Bay Tax Report for several months.
We'll crank up again after April 15th.
Here's your chance.
If you no longer see the humor
(or NEVER saw the humor)
in the
South Bay Tax Report,
simply "Unsubscribe"
at the bottom of this email and
we'll cheerfully go away!
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