WE do get tax benefits from our little rasca… lovable adorable children: • Dependency exemption:  A child can be claimed as a dependent starting from the year they are born. That’s a deduction of $3,950 for 2014. • Child and Dependent Care Credit:  You may be able to claim the credit if you pay someone…

1. DO not estimate income from interest, dividend, independent contractor or LLC. Banks, stock brokerage companies and LLCs send exact amounts to IRS via form 1099s and K-1s.  Estimates generate mismatch – the main source of correspondence audits. 2. Do not estimate mortgage interest because lenders send exact amounts per form 1098 to IRS. TIP:…

SURELY as April 15 comes along, some of you will procrastinate in filing tax returns. It can be habit forming as I see the same taxpayers come after April 15 year after year. After four decades of counseling taxpayers, I look back at so many reasons why taxpayers don’t file on time – not having…

1. THE failure-to-file penalty is generally more than the failure-to-pay penalty. If you cannot pay all the taxes you owe, file to prevent that more costly failure-to-file penalty. 2. The failure-to-file penalty is 5 percent per month of the unpaid taxes. This penalty will not exceed 25 percent of the taxpayer’s unpaid taxes. 3. The…

• FILE your tax records neatly and orderly during the year. If you are not an organized person by nature as some of us are, just throw tax documents in a shoe box or stuff them into a folder labeled with “20__ tax records.” It beats turning over your whole home and garage at tax…

1. QUALIFIED Residence Interest includes your principal and second homes. The homes could be a house, condo, mobile home, motor home, time share, or even a houseboat, as long as it has sleeping quarters, toilet and cooking facilities.  You don’t have to occupy your second house (vacant house is OK). 2. Acquisition Debt is incurred…

• YOU may deduct donations to qualified organizations.  Qualified organizations have tax-exempt status from the IRS. These include corporations or foundations organized in the U.S. for religious, charitable, educational, scientific, literary, or prevention of cruelty to children and animals. • You cannot deduct contributions made to specific individuals – priests, nuns, victims, and political organizations…

FOR those of you who itemize, the table below should be of special interest. For those of you who play the odds (you know what I mean), this table should be of very special interest. Having claimed too many exemptions at work to increase your take-home pay, you suddenly find yourself owing Uncle Sam a…

PAY attention to your filing status because it determines your standard deduction, tax due, or refund. Here are 12 tips to help you choose your correct filing status: 1. There are five filing status options to choose from: single, married filing jointly, married filing separately, head of household and qualified widow/widower with dependent child. 2….

Exemption Credits: a. $108 –  Single, Married filing separately, Head of Household. b. $216 –  Married filing jointly. c. $333 –  Dependent. d. $108 –  Age 65 or older. e. $108 –  Blind. Exemption Credits are phased out by $6 or $12 for each $1,250 or $2,500 that federal AGI exceeds certain amounts over $176,413….

1. YOU are required to file a California tax return if your gross income exceeds: a. Single – $16,047. b. Head of household – $27,147. c. Married filing jointly – $32,097. Taxpayers with dependents or who are aged 65 or over have higher filing thresholds. 2. Taxpayers who do not itemize deductions for mortgage interest,…

1. YOU are required to file an income tax return if your 2014 gross income reaches: Elderly and blind taxpayers add $1,200 to $1,550. 2.  Personal exemptions $3,950 Phaseouts for personal itemized deduction and personal exemption were reinstated in 2013. 3. Standard deductions: If your combined itemized deductions for interests, taxes, medical and contributions are…

Premium Tax Credit for individuals and families IF YOU purchased health coverage from a state or the federal Marketplace and are eligible for the premium tax credit, file Form 8962, Premium Tax Credit, with your federal income tax return. If you previously chose to have advance payments of the premium tax credit paid directly to…

Affordable Care Act (ACA – ObamaCare) THE Individual Shared Responsibility provision of ObamaCare requires taxpayers to either: • Have qualifying health care coverage, • Qualify for an exemption, or • Make a payment. 1. Qualifying Health Coverage: • Qualifying coverage (minimum essential coverage) includes coverage from employers, Medicare, Medicaid, CHIP, and Health Insurance Marketplace. •…

  * * * Sy Al-os Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies. The firm celebrates its 38th anniversary in 2015. * * * Victor Santos Sy graduated Cum Laude from UE…

(Part 3 of 3) MATERNITY Leave: State universities may not require female graduate students to take leaves of absence for pregnancies and must allow those who do take leaves to return in good standing. Military Personnel: Courts may create a diversion program for active military personnel or veterans who commit misdemeanors and are suffering from…

(Part 2 of 3) FRACKING Bans. California’s Mendocino and San Benito counties passed measures banning fracking, a practice in which high-pressure liquid is shot through a drill hole in the earth as a means of getting at oil or natural gas. Gardens: Landlords may not prevent residents of condominiums and apartments from growing their own fruits…

(Part 1 of 3) BAN on Plastic Bags: New law requires that supermarkets and large pharmacies stop distributing plastic bags effective July 1, 2015. The ban will include convenience stores in 2016. The law does not apply to bags used for fruits, vegetables, or meats. Bike Trails: Local agencies, including cities and park districts, may propose…