Michael Gray, CPA's Tax and Business Insight

August 11, 2015

© 2015 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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Minnie on the carousel at the San Francisco Zoo.
Minerva Siemer on the carousel at the San Francisco Zoo.

Back to school...

Classes will be starting soon for most of the schools in our area. My grandkids tell me not to say the "S" word! Be careful as children become accustomed again to traveling to and from school.

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Family celebrations.

My granddaughter, Minerva Siemer, celebrated her third birthday this month.

My wife Janet and I celebrated our 44th wedding anniversary this month. Janet has certainly been a blessing in my life and I feel very fortunate to have married her.

Janet's sister, Gail Johnston, is celebrating a birthday this month.

Congratulations!

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September due dates will soon be here.

The extended due dates for calendar-year corporations, partnerships and trusts is September 15. Be sure to get the information for your extended return to your tax return preparer right away. If you need us to prepare your tax return, call Dawn Siemer on Monday, Wednesday or Friday at 408-918-3161 for an appointment.

The third quarter federal estimated tax payment due date for individuals, calendar-year trusts and most calendar-year corporations is September 15. California doesn't have a third quarter estimated tax payment due on September 15 because the first two payments are "front-loaded." In some cases, taxpayers will "catch up" on unpaid California estimated tax payments on September 15.

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October due date is coming for individual income tax returns.

In case I get snowed and don't get out an October newsletter before October 15, remember that is the due date for extended individual income tax returns. Get the information to finish your tax returns to your tax return preparer right away. If you need us to prepare your tax return, call Dawn Siemer on Monday, Wednesday or Friday at 408-918-3161 for an appointment.

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New tax legislation enacted.

President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 on July 31, 2015.

The legislation includes some important tax provisions.

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Gifts from non-resident aliens can be subject to U.S. Gift Tax.

I recently attended an estate tax planning symposium. One of the speakers reminded us that nonresident aliens (individuals who are not U.S. citizens and live outside the U.S.) can be subject to U.S gift tax when they make gifts of real estate or personal property located in the United States. There is no exclusion except for the annual $15,000 exclusion per donee, per donor. We most often see this for gifts of real estate. Cash can also be personal property. It's best that transfers of cash be made outside the U.S., such as by opening a bank account outside the U.S. (which will also be subject to foreign bank account reporting, but not U.S. gift tax). Gifts exceeding $100,000 (cumulative for the year) also have to be reported by the donee on Form 3520. If a nonresident alien wants to make a gift to a U.S. person, he or she should get professional advice from a tax advisor familiar with the rules.

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California enacts an earned income tax credit.

California has enacted a new earned income tax credit effective for 2015. The amount of the credit will depend on a percentage stated in California's budget act. The California credit will be computed by multiplying a modified federal credit amount by an "adjustment factor". For 2015, the factor is 85%.

For the California credit, "earned income" will not include self-employment income. Earned income will be employee wages.

The credit will only be available for individuals who have a qualifying principal place of abode in California more than half the year.

The credit is phased out at fairly low levels of gross income.

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Property tax appeals filing deadline is coming.

The deadline for filing appeal for a California property tax appeal in Alameda, Inyo, Kings, Orange, Placer, San Francisco, San Luis Obispo, Santa Clara, Sierra and Ventura counties is September 15, 2015. The deadline for other counties is November 30, 2015.

See http://www.boe.ca.gov/proptaxes/pdf/filingperiods.pdf

For a video about filing appeals, see http://www.boe.ca.gov/info/AssessmentVideo/Index.html

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Does your group need a speaker?

We are seeking opportunities to speak before groups. Topics include recent tax developments, tax issues relating to real estate, how estate planning has changed recently, tax issues relating to alternative investments using retirement accounts, and marketing topics such as "How I created a public access television show broadcast on eleven Bay Area stations." To make arrangements, call Michael Gray at 408-918-3161.

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Please share your good experiences with Michael Gray, CPA.

As you know, more and more people are going to the internet to find information about service providers. We hope you will share some good words about experiences that you have had with our firm<. Some of the sites where you can share your experiences include yelp.com, siliconvalley.citysearch.com, and Google+.

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Financial Insider Weekly broadcast schedule for August and September.

Financial Insider Weekly is broadcast in San Jose and Campbell on Fridays at 9:30 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 August and September:

August 21, 2015, Janis Carney, attorney at law, Carney Elder Law, "Senior Estate Planning"
August 28, 2015, Janis Carney, attorney at law, Carney Elder Law, "Caring for seniors today: challenges in getting quality care"
September 4, 2015, Janis Carney, attorney at law, Carney Elder Law, "Paying for long-term care for seniors in California"
September 11, 2015, Robert E. Temmerman, Jr., attorney at law, Temmerman, Cilley & Kohlmann, LLP, "I'm an executor. Now what?"
September 18, 2015, Robert E. Temmerman, Jr., attorney at law, Temmerman, Cilley & Kohlmann, LLP, "I'm a trustee. Now what?"
September 25, 2015, Peggy Martin, ChFC, CLU, The Family Wealth Consulting Group, "Legacy planning"

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 Social Media!

Want to see new episodes of Financial Insider Weekly as soon as they're posted on Youtube? Want to see Michael Gray's blog posts as soon as they're live? We post them (and more) on social media!

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 www.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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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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