Archive for the ‘Taxable Talk’ Category

10 = 2500 ?

Wednesday, February 25th, 2015

Of course ten doesn’t equal 2,500. However, in the brave new world of the United States Postal Service it does. On Monday, I mailed a Tax Organizer to a client here in Las Vegas; she’s about ten miles from where I am. I also mailed a completed tax return to a client in South Carolina. Both will be received today.

About one year ago the Postal Service noted their plans of slowing down first class mail delivery as a tool to save money. These have apparently now gone into full effect. Anything that isn’t a parcel (or Priority Mail) is being slowed down by one day. Mail that in the past would take one day to go from Summerlin to Henderson (two areas of Las Vegas) now takes two days. My Priority Mail package to Columbia, South Carolina takes the same two days.

This is just something to realize when you mail a letter (to your tax professional or anyone else); it may take a bit longer to get where it’s going. However, when you mail something to the IRS or a state tax agency, it’s the date of postmark that counts so while the slowdown will impact when your payment posts it does not impact the timeliness of the payment.


Monday, February 9th, 2015

Today is the tenth anniversary of this blog. My very first post stated,

After reading Hugh Hewitt’s Blog, starting a blog for Clayton Financial and Tax became a necessity, not a project for “tomorrow” (whenever that is). There are already some excellent blogs covering taxes (see the blogroll on the right–if yours isn’t included, email me a link and I’ll add it on), but only the Leonard Letter looks at taxes from a California perspective. My goal is to focus on taxes and how they impact what we, as citizens and taxpayers, get to keep in our pockets.

Inevitably, this means that I have to look at the politics behind taxes. An example is a proposal currently in front of the city council of Los Angeles which would increase the sales tax from 8.25% to 8.75% (the proposal failed to make it on the ballot by one vote). If this proposal were to pass, then business would increase in nearby cities (e.g. Burbank) because prices would be less expensive than in North Hollywood (part of the City of Los Angeles). That’s a positive for Burbank, but a negative for Los Angeles. Additionally, if prices increase in Los Angeles (they would), then sales will decrease.

I’ll also be looking at humorous tax events. Tax cheats, tax evaders, and humorous taxes are all fair game. And if I get wind of a politician saying things like Linda Stubbs of Middleton, Ohio, you will hear about it.

Some things have changed: I’ve moved from the perfumed landscape of Orange County, California to the desert wastes of Las Vegas, Nevada. Clayton Financial and Tax has changed: From a one-person business there are now three of us. We have a second office in Bethesda, Maryland. Other things haven’t changed: The focus of this blog remains looking at taxes that impact our clients. That puts the focus on small business owners, professional gamblers, real estate owners, and others. I also try to write in a humorous way; taxes, after all, is about as a dry a subject as there is. (For anyone who has trouble sleeping, just pick up a volume of the Tax Code and start reading. You’ll be out like a light before you know it!) That’s why I write about bozo tax offenders.

I’m aiming to make the second ten years of this blog as fun to write as the first ten.

We’re Moving (Blog Hosting)

Thursday, February 5th, 2015

On Friday night we’ll be changing hosting companies for this blog. It can take up to 48 hours for this to cascade through the tubes of the Internet name servers of the Internet (though it usually takes about ten minutes). All should be fine by Sunday evening.

The Form 3115 Conundrum

Monday, January 26th, 2015

[Accounting Today readers: Here’s a link to Fail, Caesar.]

Form 3115 is the form used to request an accounting method change. For example, if your business is changing from cash to accrual, this form is filed. Many such changes are automatic; you just notify the IRS, file the paperwork, and life moves on. Of course, even the simple is complex: Form 3115 gets filed twice: once with your tax return, and once to either Ogden, Utah or to Washington, DC.

This year there’s a conundrum faced by tax professionals: Do we need to file a Form 3115 for every taxpayer who has equipment, depreciation, rental property, inventory, etc.? And no one seems to know the answer.

The cause of the problem is the new repair/capitalization/property regulations. These new regulations are effective for the 2014 tax year, and specify how certain things are supposed to be done. Why is this a big issue? Because Form 3115 is complex: The IRS estimates it will take 24 work hours to complete one form for one client.

It’s a certainty that companies that manufacture or have inventory will need to file Form 3115 with their returns. But what about someone with a side business? A couple who rents out their old home? There is a 12-page thread on TaxProTalk on this subject and I don’t think anyone there has a good handle on this.

Let’s take a real world example: John and Mary Smith. The Smiths own one residential rental property here in Las Vegas. The property has been depreciated for the last five years. In 2013, they put in a new garage door and are depreciating it. Their tax return is otherwise quite blase: they have wage income, a home mortgage, property tax, and some minor investment income.

I still don’t have a good answer for this. I’d love to hear from other tax professionals on this issue.

Nominations Due for 2014 Tax Offender of the Year

Tuesday, December 23rd, 2014

With just about one week prior to the end of 2014, it’s time for a final reminder to submit nominations for the Tax Offender of the Year. To be considered for the Tax Offender of the Year award, the individual (or organization) must do more than cheat on his or her taxes. It has to be special; it really needs to be a Bozo-like action or actions. Here are the past lucky recipients:

2013: U.S. Department of Justice
2012: Steven Martinez
2011: United States Congress
2010: Tony and Micaela Dutson
2009: Mark Anderson
2008: Robert Beale
2007: Gene Haas
2005: Sharon Lee Caulder


Friday, December 5th, 2014

It’s time for my annual winter vacation. I will not be posting until I return. While I’m away, enjoy the fine bloggers listed in the blogroll on the right.

I’ll be back on Tuesday, December 23rd.

As God as my Witness, I Thought Turkeys Could Fly

Wednesday, November 26th, 2014

Have a Happy Thanksgiving everyone:

Today, Liechtenstein; Tomorrow, the World!

Sunday, August 24th, 2014

Fellow Enrolled Agent Jason Dinesen calls EAs the Liechtenstein of the tax world. Personally, I think he may be overstating our case; when I tell people I’m an Enrolled Agent the most common reaction is, “You don’t look like you’re in law enforcement.” Sigh….

But kudos to the National Association of Enrolled Agents: The NAEA is doing some positive public relations. If you fly American Airlines in the coming months you will hear NAEA President Lonnie Gary explaining what an EA really is–America’s tax experts. Here’s a link to the video that will be running.


Saturday, July 26th, 2014

It’s time for my annual vacation. If something earth-shattering in the tax world happens while I’m relaxing, I’ll take time out to post on it. Otherwise, enjoy the fine bloggers listed in the blogroll on the right.

I’ll be back on Tuesday, August 5th.

A Little Housekeeping

Thursday, May 1st, 2014

We’re in the process of updating our website and the look of the blog. For now, we’re using the “default” WordPress format. This may change in the next few weeks as we make other (more important) changes.