Michael Gray, CPA's Tax and Business Insight

March 4, 2009

© 2009 by Michael C. Gray

ISSN 1539-395X

A monthly report to help you prepare for your financial future, keep more of what you earn by minimizing your taxes, and build an extraordinary business!

Route to _______   _______   _______   _______   _______

(If you find this information valuable, please pass it on to a friend!)

Table of Contents

Aubrey Gray, 1918-2009
Aubrey Gray
July 16, 1918 - February 24, 2009

On my father's passing.

My father, Aubrey Gray, passed away on February 24. He developed massive internal bleeding when recovering from surgery for colon cancer. We had his Celebration of Life and placed his urn at a cemetery on March 2.

My family is thankful to have had him in our lives for his 90 years. My parents celebrated their 68th wedding anniversary last January 31. We had a family dinner at Black Angus restaurant.

We looked to him as our shining example of a husband, father, grandfather, great grandfather and friend. In his younger years, he was an outstanding all-around athlete.

His influence on me is profound, and will continue the rest of my life. He will be sorely missed.

His obituary was published in the San Jose Mercury News.

Return to Table of Contents

Family and firm celebrations.

My brother-in-law, Wade Allison, will celebrate his birthday on March 16. My sister, Arlene Gray McLean, will celebrate her birthday on March 26.

On Sunday, March 8, there will be a baby shower for my niece, Michelle Davis. She has two sons and now is expecting a daughter.

Return to Table of Contents

Tax season is here! Make your appointment now!

There is less than a month and half before April 15.

To have us prepare your income tax returns, start with the online Tax Notebook organizer. Call Dawn Siemer at 408-918-3162 for instructions to get started. We also have a paper organizer, if you prefer. We still need your documents (W-2s, 1099s, receipts for donations) to prepare your income tax returns.

We can prepare most income tax returns using information provided online and by mail. If you wish a personal meeting, please call Dawn Siemer at 408-918-3162 to schedule an appointment. Our calendar is filling up fast!

We expect to file for extensions when we receive clients' tax information after March 15.

Return to Table of Contents

Corporate due date for calendar year returns is March 16.

The due date for 2008 calendar year corporate income tax returns, including for S corporations, is March 16. Although many corporations will apply to extend the due date for their income tax returns, there is no extension for paying the tax. That means they need to have a pretty good estimate of what their income is before that due date. Now is the time to get those extension computations in process with your tax return preparer.

Return to Table of Contents

President Obama enacts tax legislation.

The stimulus bill that President Obama signed on February 17, 2009 includes significant tax legislation and other incentives. The tax hikes for high-income taxpayers discussed during his campaign for office have been postponed until after 2010.

Here are just a few highlights:

Return to Table of Contents

President Obama's budget revealed.

President Obama released his "Budget Overview For Fiscal Year 2010 of the United States Government" on February 26.

Here are a few features of the tax provisions in the budget.

Bear in mind this budget is a proposal. I expect there will be arguments in Congress about many of the provisions.

Return to Table of Contents

Uncle Sam giveth and Uncle Arnold taketh away.

California was facing a $40 billion budget shortfall. The legislature finally approved a budget with steep spending cuts and tax increases.

Return to Table of Contents

Watch recovery rebate credit on 2008 income tax return.

Some taxpayers who didn't receive an advance cash payment of the recovery rebate credit based on their 2007 income tax returns may find they are entitled to the credit on their 2008 income tax returns because their income has declined, so the credit isn't phased out. See the worksheet on page 63 of the 2008 federal individual income tax return instructions.

You will need to know how much you received as a stimulus payment to compute the credit. At www.irs.gov, search "How much was my stimulus payment?" to find out the amount received. Here's a link you can use: https://sa2.www4.irs.gov/irfof/IRServlet?app=IRACTC&selectLanguage=en.

The IRS has said that getting the recovery rebate credit wrong can delay receiving your tax refund.

Return to Table of Contents

Questions and Answers


I sell automobiles for a living. In our employee handbook, it states that we are supposed to wear a shirt and tie for employment. Would my drycleaning for the shirts, ties and suits be tax deductible?


The IRS regards suits as “street clothes,” not uniforms. I know it doesn't seem fair, but your dry cleaning expenses aren't tax deductible.

(I share your pain. I also regularly wear suits for my business attire.)

Michael Gray regrets he can no longer personally answer email questions. He will answer selected questions in this newsletter.

Return to Table of Contents

If you have employee stock options, have you subscribed to Michael Gray, CPA's Option Alert at no charge or obligation?

To learn more, visit stockoptionadvisors.com/subscribe.shtml

Return to Table of Contents

Real estate investors, have you subscribed to Michael Gray, CPA's Real Estate Tax Letter at no charge or obligation?

For details, visit www.realestatetaxletter.com

Return to Table of Contents

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Return to Table of Contents

P.S. My daughter and her husband, Holly and Dan Baker, have a Southern French Restaurant at 23 Ross Common, Ross, California, about 15 minutes north of the Golden Gate Bridge. The name of the restaurant is Marché Aux Fleurs and their website address is marcheauxfleursrestaurant.com. For the best meal of your life, call 415-925-9200 for a reservation and give them a try! For directions, visit our website at taxtrimmers.com/directions.shtml.

They also have a second restaurant, AVA, at 636 San Anselmo Ave., San Anselmo, California. AVA serves food and drinks produced in California. For reservations, call 415-453-3407. The web site is avamarin.com.

Return to Table of Contents

Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links

Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog

Subscribe to Michael Gray, CPA's
Tax & Business Insight

We respect your email privacy