Location:

4312 Woodman Ave.
Ste. 200
Sherman Oaks, CA 91423
818.501.7788 (ph)
818.501.7799 (fax)

April 15th Deadline

Today is the big [tax deadline] day:  April 15th, 2014.  If you’re scrambling to get your tax returns or payment vouchers post dated, we have compiled a list of local post offices that will have extended hours just for this event.  Please see below…

Three postal centers will be staying open until midnight to collect mail:

Los Angeles main office: 7001 S. Central Ave.

Santa Ana: 3101 W. Sunflower Ave

Santa Clarita: 28201 Franklin Parkway

Last-minute mailers should note that the Los Angeles location will only have retail service available until 10 p.m. Retail sales will stop at the Santa Ana location at 7 p.m., and at 5 p.m. in Santa Clarita.

Six other postal locations will have extended hours:

Airport Station, 9029 Airport Blvd., and the Pasadena Post Office, 600 Lincoln Ave., will be open for retail and collection service until 8 p.m.

Long Beach, 2300 Redondo Ave., will have retail service until 7 p.m. and mail collection until 10 p.m.

Industry center, 15421 E. Gale Ave., will have retail service until 6 p.m. and mail collection until 10 p.m.

Van Nuys, 15701 Sherman Way, will be open for retail service and mail collection until 9 p.m.

B&B Pharmacy contract station in Yorba Linda, 18525 Yorba Linda Blvd., will have retail service and mail collection until 10 p.m.

To find additional locations with extended hours, call 800-ASK-USPS (800-275-9777) or search the U.S. Postal Service website.

We Are Going Paperless

In our ongoing efforts to provide you with the best, most efficient service possible, we have implemented a new program called CPA SafeSign.  This program utilizes Adobe’s EchoSign technology and allows you to review, sign, and return your annual engagement letter electronically — absolutely no printing, mailing, faxing or other paper products needed!   This procedure utilizes encryption techniques to safely guard the email attachments.

We are very enthusiastic about the benefits of this system, especially once we saw how simple and straightforward it is.

This new system provides a huge leap forward in efficiency for us, as well as for you, our valued clients, all while offering the pinnacle of industry standard security.  We hope that you find it to be every bit as easy to use as we think you will, and we look forward to your feedback and any questions you may have.

Sincerely,

Dennis F. Rose
Dennis F. Rose & Associates

safemail

When to Sign Up for Medicare

As you approach 65, explore your choices and pay attention to the deadlines.

medicare

These days, turning 65 doesn’t have to mean hanging up your career. But it does represent one big milestone: Medicare eligibility. In most cases, signing up for Medicare Part A is a no-brainer. This coverage pays for in-patient care in the hospital. There’s generally no premium, although you do pay a deductible and share other costs.

You can sign up as early as three months before the month in which you turn 65 and as late as three months after your 65th-birthday month. To avoid any delay in coverage, enroll before you turn 65, says Joe Baker, of the Medicare Rights Center.

At the same time, you can also enroll in Medicare Part B, which covers doctors’ visits and outpatient care. This coverage exacts a monthly premium ($104.90 for most people in 2013), plus a deductible and coinsurance. (If you’re collecting Social Security when you turn 65, you will automatically be enrolled in Part A and Part B, and the Part B premium will be deducted from your benefits.) If you still have health coverage through work or are covered by your spouse’s employer, you may be better off keeping that coverage and delaying Part B. Ask your employer for help deciding, or call Social Security at 800-772-1213.

Once you lose employer coverage, you have eight months in which to sign up for Part B (you should do so because both retiree health benefits and coverage through COBRA are secondary to Medicare as soon as you’re eligible, whether you sign up or not). If you don’t sign up for Part B within that window, you’ll have to wait until the next open-enrollment period (January 1 to March 31), and your monthly premium will permanently increase by 10% for each 12-month period you delay.

Fill in the gaps. Also consider Medicare supplement coverage, also known as medigap. These plans cover part or all of the costs you would otherwise pay under parts A and B, including deductibles and co-pays. The ten plans are labeled by letter; benefits for each are standardized, but insurers set their own premiums. The six-month initial enrollment period starts on the first day of the month in which you are 65 or older and are enrolled in Medicare Part B. During that window, you can’t be turned away by insurers because of a preexisting condition. Miss the deadline and you could end up paying more or be denied coverage altogether. The Obamacare ban on denying coverage based on preexisting conditions does not apply to Medicare.

Medicare Part D, offered through private insurers, covers prescription drugs. You pay a monthly premium and co-pays or coinsurance, and some plans also have a deductible. The plans cover you up to a certain amount each year, after which you pay a much higher share of the cost—a gap in coverage known as the doughnut hole. Once you’ve hit the maximum out-of-pocket cost for the year, your share goes way down until year-end.

You can join a Medicare drug plan during your Medicare initial enrollment period. If you don’t, and you go 63 days or more without “creditable” coverage (such as through an employer), you will pay a penalty based on the national base premium and on how long you delayed before you enrolled.

Another option: a Medicare Advantage plan, which combines medical and prescription-drug coverage and other benefits, such as coverage for vision and hearing care. These plans, offered through private insurers, generally limit your choice of providers and require more cost sharing than Part D and medigap, but premiums tend to be lower. You can enroll in a plan during your initial enrollment period or during open enrollment (October 15 to December 7). To find medigap, Part D or Medicare Advantage plans in your area and compare premiums, go to www.medicare.gov/find-a-plan.

 

To read read more click here.

Source: Kiplinger’s Personal Finance, December 2013

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2014 Emerald Connect, LLC.

 

Credit vs. Debit Cards

Debit cards and credit cards may look the same in your hand, but they are subject to different rules and tend to offer different benefits and liability protections for consumers.

Credit for perks. With credit cards, the cardholder is legally responsible for no more than $50, and issuers often take full responsibility for unauthorized purchases. Credit-card companies are also required to investigate a billing dispute reported by a cardholder and to withhold a merchant payment until the issue is resolved.

Credit cards may also offer rewards programs and purchase protection for damaged or stolen items — and they typically include rental car coverage. Thus, it may be advantageous to use a credit card for travel reservations and other big-ticket purchases, especially if you pay off the balance before it begins to accrue interest.

credit-card-vs.-debit-card-300x225

Debit for discipline. With debit cards tied to checking accounts, a consumer could be liable for up to $50 for losses or thefts reported within two days. The potential liability rises to $500 for problems reported within 60 days and may be unlimited thereafter, but many banks refund fraudulent charges if problems are reported promptly. A credit-card company’s zero-liability protections may be extended for signature transactions on their branded debit cards.

Debit cards can be helpful for people who want to track everyday expenses such as groceries, utilities, and gas for budgeting purposes, but users should watch accounts closely for signs of fraudulent activity and to help avoid costly overdraft fees.

Source: Kiplinger’s Personal Finance, August 2013

 

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2014 Emerald Connect, LLC.

Last-minute tax tips for 2013

1040

The new federal budget legislation did not include any new tax provisions – or extenders to expiring tax breaks. So, even though the IRS won’t be ready for prime time until January 31, 2014, we can finalize our tax planning.

Here’s what you can still do to take advantage of expiring tax breaks:

•The $250 above-the-line deduction for school teachers – no doubt, by now, you’ve already spent more than this for your classroom and students. In fact, you probably have excess costs which you will report as itemized deductions.

•In 2013, we have a $4,000 above-the-line deduction for certain education expenses.

•The deduction for state and local sales taxes was a boon for folks living in states without an income tax. It leveled the deduction playing field with residents of states with income taxes. With this benefit about to expire, this month is a good time to buy high-ticket items that you were going to buy anyway. Like what? Buy a new car, boat or big-screen television or monitor after the Christmas rush. You’ll get a good deal (especially on last year’s models or dealer’s loaners).

•The deduction for mortgage insurance is disappearing next year. There’s not much you can do about this, except to make the January payment in December. You’ll get one final bite at that apple.

•Seniors who face the required minimum distribution rules have benefited from a special deal which has been extended repeatedly for the last couple of years. You could draw up to $100,000 from your IRA account and donate the funds directly to your favorite charity. This draw would benefit you in several ways:

  1. You would not have to pay taxes on the amount withdrawn.
  2. It would qualify as your required minimum distribution (RMD) for the year – if the amount drawn was higher than the RMD.
  3. It would reduce the amount in your IRA so your heirs would face somewhat less in taxes upon your death.
  4. Folks who normally tithe to their preferred charities could use IRA monies to fund their tithes.
  5. The one drawback is, there is no charitable deduction for these donations.

•Suggestion for people who don’t have a specific charity to which you’d like to make a big donation: Set up a donor-advised fund to receive the money this year. Next year, you can determine the charity or charities of your choice.

For more information on this topic you can read the full article here.

IRS Releases 2014 Standard Mileage Rates

The IRS has released the 2014 optional standard mileage rates that employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes.

The 2014 standard mileage rate is 56 cents per mile for business uses (2013 – 56.5 cents) and 23.5 cents per mile for medical and moving uses (2013 – 24 cents). It remains at 14 cents per mile for charitable uses. For purposes of computing the allowance under an FAVR plan, the standard automobile cost may not exceed $28,200 ($30,400 for trucks and vans).

The updated rates are effective for deductible transportation expenses paid or incurred on or after January 1, 2014, and for mileage allowances or reimbursements paid to, or transportation expenses paid or incurred by, an employee or a charitable volunteer on or after January 1, 2014.

Auto industry

For more information please visit www.irs.gov

What is the Gift Tax?

The federal gift tax applies to gifts of property or money while the donor is living. The federal estate tax, on the other hand, applies to property conveyed to others (with the exception of a spouse) after a person’s death.

The gift tax applies only to the donor. The recipient is under no obligation to pay the gift tax, although other taxes, such as income tax, may apply. The federal estate tax affects the estate of the deceased and can reduce the amount available to heirs.

In theory, any gift is taxable, but there are several notable exceptions. For example, gifts of tuition or medical expenses that you pay directly to a medical or educational institution for someone else are not considered taxable. Gifts to a spouse who is a U.S. citizen, gifts to a qualified charitable organization, and gifts to a political organization are also not subject to the gift tax.

gift-tax-2012

You are not required to file a gift tax return unless any single gift exceeds the annual gift tax exclusion for that calendar year. The exclusion amount ($14,000 in 2013) is indexed annually for inflation. A separate exclusion is applied for each recipient. In addition, gifts from spouses are treated separately; so together, each spouse can gift an amount up to the annual exclusion amount to the same person.

Gift taxes are determined by calculating the tax on all gifts made during the tax year that exceed the annual exclusion amount, and then adding that amount to all the gift taxes from gifts above the exclusion limit from previous years. This number is then applied toward an individual’s lifetime applicable exclusion amount. If the cumulative sum exceeds the lifetime exclusion, you may owe gift taxes.

The 2010 Tax Relief Act reunified the estate and gift tax exclusions at $5 million (indexed for inflation), and the American Taxpayer Relief Act of 2012 made the higher exemption amount permanent while increasing the estate and gift tax rate to 40% (up from 35% in 2012). Because of inflation, the estate and gift tax exemption is $5.25 million in 2013. This enables individuals to make lifetime gifts up to $5.25 million in 2013 before the gift tax is imposed.

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2013 Emerald Connect, Inc.

Cost of Early Retirement Plan Withdrawal

It’s not a good sign when people raid their retirement plans to pay bills, college tuition, or auto repairs, but more workers have been borrowing from their accounts or taking hardship withdrawals in the past few years. At the end of 2010, 28% of active 401(k) participants had outstanding account loans, and another 7% took early withdrawals.1 In 2011, retirement savings account loans rose by 20% across all demographics.2

Although it’s understandable that people might turn to their retirement accounts for a source of ready cash, it is generally not a good idea. Fifty-five percent of employees who took a cash distribution when changing jobs said they regretted having done it.3

Keep Your Money Working

With certain exceptions (explained later), a 10% federal income tax penalty applies to early withdrawals (before age 59½) from tax-deferred plans such as IRAs and employer-sponsored retirement plans. That’s a significant deterrent in itself, but the greater penalty could be the loss of future earnings needed for retirement.

Consider the impact of a $10,000 early withdrawal from a traditional IRA. Not only could the distribution be subject to the penalty ($1,000) but also income taxes ($2,800 for someone in the 28% tax bracket), which could leave a net amount of $6,200. On the other hand, if the $10,000 principal was left in the tax-deferred account, in 20 years it would have the potential to more than triple, assuming a 6% average annual return; in 30 years, it might reach $60,000 (see graph). This hypothetical example is used for illustrative purposes only and does not reflect the performance of any specific investment; actual results will vary.

If you change jobs, you may be able to leave your retirement account assets in your former employer’s plan. Another option is to roll the assets to a traditional IRA. A properly executed trustee-to-trustee transfer to your own IRA could help preserve the tax-deferred status of the funds and potentially avoid unwanted current tax consequences and penalties. It may also give you more control of the assets, open up additional investment options, and help you manage overhead costs.

Lost Opportunity

Exceptions to the Penalty

If life deals you a bad hand, or you have other reasons to access your retirement funds earlier than planned, there are circumstances in which the penalty is waived on early withdrawals before age 59½ (although distributions would still be subject to ordinary income tax):

-Your death or permanent disability.
-A series of substantially equal periodic payments (based on life expectancy) from an IRA or a former employer’s plan that continue for at least five years or until age 59½, whichever occurs later.
-Payment of unreimbursed medical expenses that exceed 10% of adjusted gross income (in 2013).
-Employer plans only: If you are at least age 55 when you terminate or sever employment (or turn 55 by December 31 of the same year), all distributions avoid the penalty.
-IRAs only: The penalty is waived when the funds are used for qualified higher-education expenses or a first-time home purchase ($10,000 lifetime maximum).

If you take an early withdrawal from a tax-advantaged retirement account, you could lose the opportunity for that money to continue growing on a tax-deferred basis. This might lead to falling short of your retirement income needs.

1) Reuters, February 17, 2012
2) advisorone.com, January 17, 2012
3) advisorone.com, January 26, 2012

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2013 Emerald Connect, Inc.

Warning Signs That You May Not Be Ready to Retire

There’s plenty of guidance available to help you feel confident that it’s time to retire. But it could be just as important to recognize signs that you may not be ready. You might think of these as yellow caution lights, warning you to slow down and give further thought to your situation.

You’ve reached the eligibility age for Social Security. For some people, Social Security eligibility is synonymous with retirement. In fact, about 50% of those who are eligible for benefits file at the earliest age of 62, despite the fact that their monthly payments will be permanently reduced.¹

Even if you have reached full retirement age (age 66 for those born between 1943 and 1954), you may not be ready to retire unless you expect to receive substantial income from savings and/or other sources. Social Security is intended to replace only a portion of your pre-retirement income (see chart). Benefits increase at filing ages up to 70.

You need to work part-time.
Sixty-five percent of older workers say they would like to continue working in some capacity during retirement.² That’s a worthwhile goal if you can do it by choice, but be careful if you expect to depend on part-time income. Jobs are not easy to find, and many part-time positions pay low wages. It might be wise to work in your current job a little longer to help build additional savings.

You’re counting on market growth. The rapid decline in stock values during the Great Recession and slow growth during the recovery suggest that it might not be wise to factor high returns into your retirement strategy. In fact, when you retire or are close to retirement, you may want to shift more of your assets to conservative investments. Doing so could help preserve principal but typically is associated with lower growth potential.

not ready to retire

You’re not prepared for medical costs. In a recent poll, the high cost of medical care was retirees’ biggest surprise regarding retirement expenses.³ Even with current Medicare benefits, it’s estimated that a couple who retired in 2012 at age 65 would need $240,000 to pay their out-of-pocket medical expenses in retirement.4

Your spouse is not on board with your decision to retire. About three out of five married couples disagree on the timing of their retirements.5 Whether you decide to retire together or several years apart, it’s important for you and your spouse to be comfortable with the other’s choice to retire or continue working.

You have high debt or other financial obligations.
Traditional formulas for determining retirement income needs often assume that retirees have paid off their mortgages. If you are still making payments on your home, have college loans or high credit-card debt, or are supporting your children or aging parents, you may not be ready to leave the workforce.

The road to retirement can have many twists and turns. A yellow light may be a timely warning that you are not quite ready to go full speed ahead.

1) SmartMoney.com, March 2, 2012
2) usnews.com, February 10, 2012
3) PRNewswire, July 11, 2012
4) NYTimes.com, May 9, 2012
5) WSJ.com, April 9, 2012

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2013 Emerald Connect, Inc.

Unforgettable Birthdays

Birthdays may seem less important as you grow older. They may not offer the impact of watershed moments such as getting a driver’s license at 16 and voting at 18. But beginning at age 59, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits.

59½ — You can start taking penalty-free withdrawals from IRAs and qualified retirement plans as long as certain conditions are met. Ordinary income taxes generally apply to these distributions. (Withdrawals taken prior to age 59½ may be subject to a 10% federal income tax penalty.)

62 — You are eligible to start collecting Social Security benefits, although your benefit will be reduced by up to 30%. To receive full benefits, you must wait until “full retirement age,” which ranges from 65 to 67 depending on the year you were born.

65 — You are eligible to enroll in Medicare. Medicare Part A Hospital Insurance benefits are automatic for those eligible for Social Security. Part B Medical Insurance ­ben­efits are voluntary and have a monthly premium. To obtain ­coverage at the ­earliest possible date, you should generally enroll about two to three months before turning 65.1

70½ — You must start taking minimum distributions from most tax-deferred retirement plans or face a 50% penalty on the amount that should have been withdrawn. Annual required minimum distributions are calculated according to life expectancies determined by the federal government.

Source: 1) Medicare & You 2013, U.S. Department of Health and Human Services