Michael Gray, CPA's Tax and Business Insight

April 27, 2012

© 2012 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!

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Kara in a bubble bath.
My granddaughter, Kara Siemer, takes a bubble bath at a recent sleepover at Grandma and Grandpa's house. Kara turns age five this month.

It’s time for tax planning and working on amended, extended and late income tax returns.

Now that April 17 has passed, people are calling wanting a second look at the income tax returns that were filed for possible amended income tax returns. Taxpayers who filed extensions are also looking for help income getting their tax returns done.

If you would like our help, call Dawn Siemer on Mondays, Wednesdays and Fridays from 9 a.m. to 5:30 p.m. Pacific Time to make an appointment. Dawn’s telephone number is 408-918-3162.

See below about when I will be available.

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Remember Mother’s Day on May 13!

Let your mother and other influential mothers know how much you appreciate their contributions to your life.

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Bon voyage!

Janet and I will be on a vacation Panama Canal cruise starting April 28 and returning May 14. I won’t be checking email or voice messages during our vacation. Call Dawn Siemer to make an appointment to see me when I return.

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April celebrations.

April is a big month for birthdays in my family. My daughter, Dawn Siemer, her husband, John, and daughter, Kara, all have April birthdays. My mother, Eleanor Gray, is celebrating her 90th birthday this year. Happy Birthdays!

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Eleanor Gray celebrates her 90th birthday.

My mother, Eleanor Gray, is celebrating her 90th birthday this month. We are glad to still have her with us in reasonably good health. Mom grew up in Glendale, close to Los Angeles during a golden age of movies and movie stars. She once had a great autograph collection, but my grandmother threw it away! She met my father, Aubrey, when he rented a room at her next-door neighbor’s house. She traveled alone across the country to marry him in Montreal, Quebec, Canada when she was 18 years old. They were married for 67 years when Dad passed away. They settled in California and had six children, three still living, and many grandchildren and great-grandchildren. They lived in a marvelous community of friends who have stayed close for over 50 years. Mom and Dad were great role models, and we treasure them.

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California backs off real estate tax deduction issue.

After the IRS issued IRS Information Letter 2012-0018, indicating that real estate taxes don’t have to be ad valorem taxes to be tax deductible, the California Franchise Tax Board backed off its position of disallowing deductions for most special assessments, and will not require special disclosure relating to disclosing parcel numbers on the 2012 California income tax return. Unfortunately, these announcements happened right at the end of tax season. It’s probably not worth the hassle of filing an amended return to claim an additional deduction.

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Sales tax proposed for many services in California.

Proposed legislation, AB 2540, would impose a 7.5 % California sales tax on 27 types of businesses, including private tutoring, carpet cleaning, furniture repair, live theater tickets, and high net worth estate planning. The tax would not initially apply to tax return preparation or most legal services. The tax on “some” services could create more confusion in the marketplace about when it applies.

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Want to make federal tax payments on the internet?

More people are seeking the convenience of making federal tax payments on the internet. It takes some lead time to get it set up. For details, see my article on the subject at www.taxtrimmers.com/payments.shtml.

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New IRS instructions are issued for automatic change of accounting for new repair regulations.

The IRS has issued new instructions for Form 3115, Application for Change of Accounting Method. The instructions cover automatic accounting changes under the new regulations for repairs under Revenue Procedures 2012-19 and 2012-20. If you have a business or rental properties, you should discuss whether to file for a change of method under the new regulations.

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Financial Insider Weekly broadcast schedule for April, May and June.

Financial Insider Weekly is broadcast in San Jose and Campbell on Fridays at 8:00 p.m., Pacific Time. You can watch it on Comcast channel 15 for San Jose and Campbell. The show is broadcast as streaming video at the same time at www.creatvsj.org.

Here are the scheduled interviews for the rest of April, May and June:

April 27, 2012, Richard H. Lambie, professional fiduciary, “The role of the professional fiduciary”
May 4, 2012, Jann Besson, attorney, Besson and Yarbrough, “Using Medi-CAL benefits for long-term care”
May 11, 2012, William Mahan, attorney, “Mechanics of short sales and foreclosures”
May 18, 2012, William Mahan, attorney, “Tax considerations of short sales and foreclosures”
May 25, 2012, Don Pollard, CLU, ChFC, Advanced Professionals, “Health insurance alternatives for individuals”
June 1, 2012, Don Pollard, CLU, ChFC, Advanced Professionals, “Group medical insurance for small businesses”
June 8, 2012, Michael Desmarais, attorney, “Your rights as a beneficiary”
June 15, 2012, Janis Carney, attorney, Carney, Sugai & Sudweeks, LLP, “Life care planning”
June 22, 2012, Jan is Carney, attorney, Carney, Sugai & Sudweeks, LLP, “Veteran’s Administration benefits for long-term care”
June 29, 2012, Peggy Martin, CLU, ChFC, MSFS, The Family Wealth Consulting Group, “Long-term care insurance”

Financial Insider Weekly is also broadcast as follows:

Past episodes of Financial Insider Weekly are posted on YouTube. One way to watch them is to go to our web site, www.financialinsiderweekly.com, and click on "Past Episodes."

Let me know any ideas that you have for topics or guests. Guests will usually have to be located in or near the Silicon Valley in California.

Hope you can watch or record the show. Please tell your friends about it!

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

For your questions about dependent exemptions, see IRS Publication 501 at www.irs.gov.

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Visit our new article!

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Follow me on Twitter!

If you enjoy Twitter, please follow me at www.twitter.com/michaelgraycpa. I would especially appreciate retweets of our messages announcing episodes of Financial Insider Weekly.

I'm also on Facebook, LinkedIn, and Google+.

you can also follow me on other social media sites, Facebook, LinkedIn, and Google+.

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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

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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

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Check out my blog.

I have also started a blog at michaelgraycpa.com. Check it out!

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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 www.taxtrimmers.com/directions.shtml.

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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.


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Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766
Hours: 8am - 5pm PDT Monday - Friday

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