If you have income from investments, you may be subject to the Net Investment Income Tax. You may owe this tax if you receive investment income and your income for the year is more than certain limits. Here are some key tips you should know about this tax:

• Net Investment Income Tax.  The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.
• Income threshold amounts.  You may owe this tax if your modified adjusted gross income is more than the following amount for your filing status:

• Net investment income.  This amount generally includes income such as:

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Laura Stees to present:  The Four Best Ways to Fail Grow Your Business in 2015 and Beyond

Where:  The Southern California Institute, 3636 Nobel Drive, Ste. 450, San Diego, CA 92122

When:  February 19 from 2:30 to 4:00 pm

Tires of being stuck in the slow lane?  Join Laura as she discusses how to jumpstart your business plans for the coming year and beyond. You will learn the the 4 most effective ways to grow a business and the formula necessary to accurately calculate your potential growth.

Participants will leave the session with a Continue reading… Continue reading… Continue reading…

We would like to take this opportunity to remind you that, with limited exception, every business must file informational returns (Federal Forms 1099) with the Internal Revenue Service for certain payments made during the calendar year 2014. These payments include, but are not limited to:

1. Payments to persons, including partnerships and limited liability companies but excluding corporations, of at least $600 for services in the course of a trade or business.
2. Payments to persons, including partnerships and limited liability companies but excluding corporations, of at least $600 for rents, and at least $10 for royalties in the course of a trade or business.
3. Payments to persons including partnerships and limited liability companies but excluding corporations, of at least $10 for interest (i.e. interest on officer’s loans) in the course of a trade or business.
4. Payments to attorneys ($600 or more), including corporations, for services in the course of a trade or business.

These informational returns must be provided to their recipients by January 31, 2015 and filed with the IRS by February 28, 2015. Failure to file these returns can result in a penalty for each 1099 return not filed.

If you would like us to prepare your 1099 forms, please contact our office as soon as possible.

The required information that we need is Continue reading… Continue reading… Continue reading…

In the recently enacted “Tax Increase Prevention Act of 2014,” Congress has once again extended a package of expired or expiring individual, business, and energy provisions known as “extenders.” The extenders are a varied assortment of more than 50 individual and business tax deductions, tax credits, and other tax-saving laws which have been on the books for years but which technically are temporary because they have a specific end date. Congress has repeatedly temporarily extended the tax breaks for short periods of time (e.g., one or two years), which is why they are referred to as “extenders.” The new legislation generally extends the tax breaks retroactively, most of which expired at the end of 2013, for one year through 2014.

Below is an overview of the key tax breaks that were extended by the new law. Please call our office for details of how the new changes may affect you or your business.

Individual extenders

The following provisions which affect individual taxpayers are extended through 2014:

• the $250 above-the-line deduction for teachers and other school professionals for expenses paid or incurred for books, certain supplies, equipment, and supplementary material used by the educator in the classroom;
• the exclusion of up to $2 million ($1 million if married filing separately) of discharged principal residence indebtedness from gross income;
• parity for the exclusions for employer-provided mass transit and parking benefits;
• the deduction for mortgage insurance premiums deductible as qualified residence interest;
• the option to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes;
• the increased contribution limits and carryforward period for contributions of appreciated real property (including partial interests in real property) for conservation purposes;
• the above-the-line deduction for qualified tuition and related expenses; and
• the provision that permits tax-free distributions to charity from an individual retirement account (IRA) of up to $100,000 per taxpayer per tax year, by taxpayers age 70 and ½ or older.

Business extenders

The following business credits and special rules are generally extended through 2014: Continue reading… Continue reading… Continue reading…

Did you know…

Beginning in 2014, the “individual mandate” under the Affordable Care Act begins. Not only are all individuals required to have insurance but all people who are required to file a tax return must report their insurance on that return. So we will need quite a bit of additional information to prepare your 2014 return.

In reporting their insurance, people will fall into one of four categories:

• You got qualifying insurance through the exchange (the Marketplace);
• You got qualifying insurance through some other source such as an employer or Medicare;
• You did not get qualifying insurance and you do not have an exemption which means you will be subject to the penalty for not having insurance;
• You did not get qualifying insurance but you are entitled to an exemption from the penalty.

To complicate matters, the above four categories apply to each member of your family and may apply differently to each member (for example, different members of the family have insurance from different sources). Moreover, any one member of your family may have changed categories during the year. The information we request below must cover each family member on a month-to-month basis. If a family member’s situation was the same for the entire year, then you can document that member’s insurance on a yearly basis. Continue reading… Continue reading… Continue reading…

We are proud on to introduce our new Twitter and LinkedIn company pages.  We aim to provide current tax and financial info to followers, as well as current events happening at SWC.  Links to both sites can also be found at the bottom of our website.

If you have questions or comments about Stees, Walker & Company, please email us at:  info@steeswalker.com, or call us at: 858-487-4580

The Team at Stees, Walker & Company LLP

This is the home of our new blog. Check back often for updates!