Benjamin & Young, LLP CPA

Are you still wondering if Solar is right for you??? You are invited to attend a Solar Seminar and get answers to all of your questions! Tax Benefits, Purcha...se options, Installation questions, Product information and more! Plus interested homeowners will receive a free dinner! Join myself along with Gary Somma from HMR&R Home Repairs, Services and Solar Canyon Lake, Expert Installers. There will also be a Solar Product Manager for all of your product advice! When: This Wednesday, January 27, 2016 Time: 6:00 pm Location: Lonestar Steakhouse, Lake Elsinore Hope to see you there! Michelle Williams RTRP, Canyon Lake

Health Savings Accounts Offer Tax Breaks Article Highlights: Health Saving Accounts Tax Breaks Eligibility ...Continue reading

Repeated Warning about Phone Scams Article Highlights: Scammers who pretend to be from the IRS are calling people across the country. ...Continue reading

Borrowing Money to Finance an Education? Article Summary: Education Loans...Continue reading

A New Twist on Your Favorite Game Show Article Highlights: Tax Issues of Being a Game Show Winner ... Setting Aside Winnings For taxes Prizes Are Taxed at Retail For Non-cash Winnings, The Taxes Come Out of Your Pocket We all have our favorite game shows such as Wheel of Fortune, The Price is Right, and Lets Make A Deal and we love to have the contestants win big. Often the game show hosts will ask "what you are going to do with the winnings?" The answer is usually "buy this or that" or maybe "go on vacation." We seldom if ever hear a contestant or the host mention anything about giving the government part of their winnings. But after all the celebrating is over, the game show will issue the winning contestant a 1099 for the amount of the cash and fair market value of the prizes won, which is taxable on the contestant's state and federal tax returns. If a contestant wins cash they just need to set aside enough of the cash winnings to pay their taxes! The amount of the tax will vary by individual based on their tax bracket and the state they live in. The federal tax can be as high as 39.6% and some states' as high as 13%. Most individuals who are contestants on these programs are probably in the 10-25% federal tax brackets and 2-5% state brackets, making the tax on the winnings around 22%. But what happens to the contestant that wins a prize? They will be taxed on its fair market value, which is usually full retail value. So they will have to dig into their own pockets to come up with the cash to pay the taxes. And if the contestant wins something they have no use for, they are still stuck with taxes unless they refuse the prize or contribute it to charity. Then think about the individual with limited means that wins an $80,000 vehicle. It might well cost them $17,500 or more (which they probably don't have) just to pay the income taxes on the prize. Or consider the contestant that wins a bunch of expensive trips and will have to dig into their pocket to pay cash for them. Do they even have enough vacation time to take them? Thinking about how the contestant will deal with taxes can add a new twist to watching your favorite game show. Call this office if you have questions.

Have You Reviewed Your Will or Trust Lately? Your will or trust was prepared so that your assets will be distributed according to your wishes after your death. These documents can also reduce estate taxes. However, certain events can cause these documents to become outdated and create family stress and unpleasant tax results. ... Revised tax laws and life’s ever-changing circumstances make estate planning an ongoing process. That’s why a periodic review of your will or trust is an essential part of estate planning. Here is a partial list of occurrences that could cause your will or trust to be outdated: Your marital status has changed Your heir’s marital status has changed You have relocated to a different state Your assets have changed significantly in value You have sold or acquired a major asset(s) There is a change in your personal representative You wish to change heirs Estate laws have changed Are your named beneficiaries up to date on your insurance policies, IRA accounts, and pension plans? For example, did you forget to remove your ex-spouse, or a deceased relative as your beneficiary? You should never overlook or put off these issues, because if you pass on, it is too late to make changes. If you have questions about how your changed circumstances may impact your estate taxes, please give this office a call.

Beware of Trust Fund Penalties Article Highlights Trust fund penalty ... Employers can be held personally liable Responsible persons of a corporation or limited liability firm can be held personally liable Factors used in determining a liable responsible person The term trust fund recovery penalty refers to a tax penalty assessed against the directors or officers of a business entity that failed to pay a required tax on behalf of its employees. For example, employers withhold income taxes and FICA payroll taxes from employees’ wages. These funds actually belong to the government and are referred to as trust funds. They cannot be used by the employer to pay other business expenses. Tax law provides that employers are personally responsible for remitting the trust funds to the government. If the employer is a business entity such as a corporation or a limited lia-bility company, then any person who was required to collect, truthfully account for, and pay over the funds is liable for a penalty equal to the total amount of tax that went unpaid. Once assessed, these trust fund penalties cannot be discharged in bankruptcy, and the employer or responsible person(s) will be liable for them even if the business entity itself is liquidated. Other civil penalties, as well as criminal penalties, could also apply. The trust fund recovery penalty (the amount of the tax that was collected and not paid) can be imposed on any person who: (1) Is responsible for collecting, accounting for, and paying over payroll taxes; and (2) Willfully fails to perform this responsibility. Willfulness involves a voluntary, conscious and intentional act to prefer other creditors over the U.S. Thus, if a responsible person knows that withholding taxes are delinquent and uses corporate funds to pay other expenses, such failure to pay withholding taxes is deemed willful. In determining whether an individual is a responsible person, courts consider various factors, including whether the individual: (1) Holds corporate office; (2) Has check-signing authority; (3) Can hire and fire employees; (4) Manages the day-to-day operations of the business; (5) Prepares payroll tax returns; (6) Signs financing contracts; and (7) Determines financial policy. If you can be judged to be a responsible person, make sure the trust fund payments are made before any other expenses are paid, even if encouraged not to do so by someone else of authority within the company. Otherwise you may be held responsible for the unpaid funds, and the liability could follow you to your grave. If you have questions about the trust fund rules and potential penalties, please give this office a call.

Scammers Getting More Brazen Article Highlights: Taxpayers Receiving Bogus Call from Individuals Claiming To Be IRS Agents. ...Continue reading

Mid-Year Tax Planning Checklist All too often, taxpayers wait until after the close of the tax year to worry about their taxes and miss opportunities that could reduce their tax liability or financially assist them. Mid-year is the perfect time for tax planning. The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and avoid unpleasant surprises after it is too late to address them. Did you get married, divorced, ...or become widowed? Did you change jobs or has your spouse started working? Did you have a substantial increase or decrease in income? Did you have a substantial gain from the sale of stocks or bonds? Did you buy or sell a rental? Did you start, acquire, or sell a business? Did you buy or sell a home? Did you retire this year? Are you on track to withdraw the required amount from your IRA (age 70.5 or older)? Did you refinance your home or take out a second home mortgage this year? Were you the beneficiary of an inheritance this year? Did you have a child? Time to consider a tax-advantaged savings plan! Are you taking advantage of tax-advantaged retirement savings? Have you made any significant equipment purchases for your business? Are you planning to purchase a new business vehicle and dispose of the old one? It makes a significant difference whether you sell or trade-in the old vehicle. Are your cash and non-cash charitable contributions adequately documented? Are you keeping up with your estimated tax payments or do they need adjusting? Did you purchase your health insurance through a government insurance exchange and qualify for an insurance subsidy? If your income subsequently increased, you may need to be prepared to repay some portion of the subsidy. Do you have substantial investment income or gains from the sale of investment assets? If so, you may be hit with the 3.8% surtax on net investment income and need to adjust your advance tax payments. Did you make any unplanned withdrawals from an IRA or pension plan? Have you stayed abreast of every new tax law change? If you anticipate or have already encountered any of the above events or conditions, it may be appropriate to consult with this office, preferably before the event, and definitely before the end of the year.

Tips for Students Planning to Work during the Summer Article Highlights: ...Continue reading