Phone: (714) 538-1040            Email: greg@beck1cpa.com

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Is It The IRS Or Is Fraud Calling You?

Posted on April 22nd, by Big Chief in Blog. Comments Off

Many of our clients have reported that persons representing themselves as the IRS call on the phone and ask for money. In many cases they seem to know a great deal about you when they call.

A key characteristic is that they will tell you that the sheriff or other law enforcement agent will come to your door in a few days to either collect the money or arrest you.

This is not how the IRS works. The IRS will send you a letter notifying you of an audit, asking questions about a return or sending you a bill. Their first contact will not be by telephone.

 

What to do if you are contacted?

· First do not send them money.

· You can take down call back numbers, names and IRS employee identification numbers (if they will provide them) but don’t stay
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New IRS rules simplify compliance for money market fund shares

Posted on July 30th, by Big Chief in Blog. Comments Off

In response to new SEC pricing rules for shares in certain money market funds (MMFs), the IRS on Wednesday issued guidance that allows a simplified method for calculating gain or loss on shares in MMFs subject to the new rules and exempts redemptions of shares in these MMFs from the wash sale rules.

As the Treasury explained in its announcement on the new rules, “These particular MMFs will no longer be able to utilize the special exemptions that currently allow them to maintain a stable net asset value (NAV), and instead the share price will float, so the funds will be known as ‘floating-NAV’ MMFs.” For the many taxpayers who use these MMFs for cash management purposes, purchasing and selling shares in them often, the frequent transactions may produce many small gains and losses that will make tax compliance difficult (Fact
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Estimated Income Taxes due June 15th

Posted on June 11th, by Big Chief in Blog. Comments Off

For those paying their income tax through quarterly estimates the 2nd estimate is due June 15th.  Usually during the rush of tax season you had to decide what to base your 2014 estimates on.  You would have considered the safe harbors and chosen the one that best fits your circumstances at the time.

Now is a good time to consider if you have made a good choice on what to pay.

Taxpayers pay estimated taxes to avoid the underpayment of estimated tax penalty.  The Internal Revenue Service requires taxpayers to pay the lesser of 110% of the prior year tax or 90% of the current year tax.  Generally it is easier to calculate 110% of your 2013 than to estimate 2014 income.

Now that five months of the year have passed you may have a clearer picture of your income for the year.  If there has been
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U.S. could lose $3 billion as budget forces fewer tax audits -IRS chief

Posted on May 8th, by Big Chief in Blog. Comments Off

The U.S. federal government could lose almost $3 billion in revenue during the current fiscal year because budget cuts are forcing the tax-collecting Internal Revenue Service to audit fewer people, the agency’s chief said on Wednesday.

Testifying before a congressional panel, IRS Commissioner John Koskinen said the IRS will audit 100,000 fewer individuals this year as part of congressionally mandated cuts to the tax agency’s budget. Audits of high-wealth individuals, businesses and partnerships will also decline, he said.

“This fiscal year, the IRS’s key enforcement programs will operate well below historical levels,” said Koskinen, who was speaking before a House of Representatives subcommittee about the tax season that ended on April 15.

“We estimate that the government will lose almost $3 billion in revenues as a result,” Koskinen said.

Congress in January cut the IRS’s budget by $526 million, or 4 percent, to $11.9
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What Tax Documents Should You Keep?

Posted on April 21st, by Big Chief in Blog. Comments Off

The tax deadline and filing your return might be behind you, but your tax responsibility isn’t really over until you begin to organize your documents for next year. Staying organized even after your taxes have been filed will make your life a lot easier in the future – especially when life events like buying a home or refinancing your mortgage require you to show past tax returns, W-2s and other tax-related documents. Preparing your documents now will also save you time and money when it’s time to file next year.

The Internal Revenue Service recommends taxpayers keep their returns and any supporting documentation for seven years from the later of the due date including extensions or the filing date; after that, the statute of limitations for an IRS audit expires in most cases. Here are a few simple tips to help you stay
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Haven’t Filed Your Taxes Yet? An Extension May be a Good Idea

Posted on April 9th, by Big Chief in Blog. Comments Off

Most mistakes in tax returns occur during the last two weeks of tax season before the deadline.

This is due to many people wanting returns and not enough time to both prepare the returns and allow for the taxpayers to review them prior to filing.

We recommend that, where possible,  you have your tax professional file an extension for you and then finish the returns late April or early May – that way you will get their best service.

Also, remember that an extension is an extension of time to file, not an extension of time to pay – IRS charges ½ of 1% per month penalty plus interest on any unpaid balance after April 15th.  California is the same except the first month the penalty is 5%.


Psst…the Backdoor Route to a Roth IRA

Posted on March 5th, by Big Chief in Blog. Comments Off

Going through the back door can pay off for high-income retirement savers.

We’re talking about the backdoor route into popular Roth individual retirement accounts, which offer tax-free income in later life.

The front door into Roths is shut for many investors. Married couples earning $191,000 or more and singles earning $129,000 or more in 2014 are barred from contributing directly to Roth IRAs.

But there’s a simple detour that works for many of them. They can put money into a traditional IRA—and then roll that into a Roth IRA, getting all the benefits.

More than 40% of the Silicon Valley executives working with adviser Bijan Golkar of FPC Investment Advisory Inc. in Petaluma, Calif., do this year after year, he says. Roth IRAs are “a great tool” for these clients, who are likely to be in high tax brackets even in retirement because of
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Do you owe estimated taxes?

Posted on February 12th, by Big Chief in Blog. Comments Off

For most of us, tax day comes just once a year—on or around April 15. But for people who owe estimated taxes, Uncle Sam expects a check four times a year. Unfortunately, one of those poor quarterly taxpayers may be you if any of the following applies to your situation.

You cashed in some significant stock market winners this year but haven’t changed your withholding.
You or your spouse became self-employed and now owe income and self-employment taxes for your efforts.
You finally decided to hire a nanny and pay her federal payroll tax. You can do this in quarterly payments or in one lump sum when you file your taxes in April. (But you may owe interest if you wait until April.)
You have income from other sources that you forgot to consider (or had no way of knowing about) when you filled
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Congrats, you owe the Alternative Minimum Tax

Posted on January 17th, by Big Chief in Blog. Comments Off

We are now solidly into 2014, so it’s time to start thinking about your 2013 tax bill. One big question to be answered is whether you will owe the dreaded alternative minimum tax with your 2013 Form 1040. Congress originally cooked up the alternative minimum tax (AMT) to make sure high-income types who take advantage of multiple tax breaks would still owe something to Uncle Sam each year. These days, however, upper-middle-income folks are the most likely AMT victims. Here’s what you need to know.

AMT basics

Think of the AMT as a separate tax system with a family resemblance to the more-familiar “regular” federal income tax system. The difference is the AMT system taxescertain types of income that are tax-free under the regular tax system and disallows some regular tax deductions. Also, the maximum AMT rate is “only” 28%
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Seven ways Americans pay taxes

Posted on January 6th, by Big Chief in Blog. Comments Off

As Americans across the country rang in the new year, many were unaware that, at midnight, more than 50 different tax breaks expired. According to the Tax Foundation, among them were credits for everything from building motorsports facilities, producing biofuels, conducting business research and development, and even training a mine rescue team.

Clearly, the U.S. tax system can be very complex. Understanding the basics, especially the different types of taxes you may face, can be a valuable tool in financial planning.

Not all taxes are paid at the same time. Some, for example, are deducted from your paycheck. “Generally, three types of taxes will show up on a worker’s pay stub: federal income taxes, payroll taxes (Social Security and Medicare), and state income taxes,” Andrew Lundeen, manager of federal projects at the Tax Foundation, told 24/7 Wall St.

Other taxes, however, are levied
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How will you be Affected by New Tax Provisions?

Posted on December 10th, by Big Chief in Blog. Comments Off

Although the American Taxpayer Relief Act (enacted in January of this year) added or extended several key tax provisions and rates, dozens of tax provisions are set to expire at the end of 2013 (though most relate to businesses, if you have a pass through entity you could feel the affect). Here is a list of a few of them (along with brief commentary):

Individual provisions:
· Deduction for state and local sales taxes in lieu of state and local income tax (in years where you make large purchases subject to sales tax you will no longer be able to take advantage of those tax payments)

· Deduction for certain elementary and secondary school teacher expenses (a $250 above the line deduction)

· Premiums for mortgage insurance deductible as qualified residence interest

· Deduction for qualified tuition and related expenses (an above the line deduction)

·
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IRS Finalizes Rules on Additional Medicare Tax

Posted on December 5th, by Big Chief in Blog. Comments Off

The Internal Revenue Service has released the final regulations for the 0.9 percent Additional Medicare Tax that was imposed as part of the Affordable Care Act.

The final regulations that were released last week more or less adhere to the proposed regulations that were released last year for the Additional Hospital Insurance Tax on income above threshold amounts, usually referred to as the Additional Medicare Tax (see Tax Strategy: Proposed Guidance on Medicare Contribution Taxes). The tax took effect on January 1 of this year and applies to wages, compensation, and self-employment income above a threshold amount received in taxable years beginning after Dec. 31, 2012. The threshold amounts are $200,000 for single taxpayers and $250,000 for married filing jointly (or $125,000 for married filing separately) taxpayers.

The IRS also released final regulations last week on another tax that was included in the Affordable Care Act, the
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Accrued Employee Bonuses May not Be Deductible When Accrued

Posted on November 19th, by Big Chief in Blog. Comments Off

In an IRS Legal Advice issued by Field Attorneys employee bonuses paid after year end (within 2 and ½ months) that are accrued as of the year-end could be deductible in the year paid instead of the year accrued.

Basically, if the amount is not fixed and the right to revoke or modify is present, the bonus accrued as of year-end would be deductible in the year paid.

This could remove a key deduction in your yearend tax planning!

If you are an accrual basis taxpayer and accrue employee bonuses at year end to be paid in the subsequent year, we recommend you consult with a tax advisor to make sure that your deduction is sustainable.

We at Gregory W. Beck, CPA offer a free ½ hour consultation.  We would be glad to talk with you about this issue.

Reference: Legal Advice Issued by Field Attorneys 20134301F.


Six Common Errors Un Successful Business Owners Make

Posted on November 14th, by Big Chief in Blog. Comments Off

In my last blog I discussed one of these errors – selling your business the wrong way.

On November 21st, 2013 I, along with several other speakers will present these errors and talk about how to avoid them.

This is a great opportunity to meet us if you are not already familiar with our firm and what we can do for you.

This seminar is a two hour lunch meeting located at JT Schmid’s on Katella in Orange County, CA.

If you would like to attend please contact us immediately as seating is limited.

Although there is a small cost ($50) it includes a great meal from JT Schmid’s from a special menu we have selected for our attendees.

Please call “Brenda” at 949/833-5837 (or e-mail us at sstakley@burnhamgibson.com)

I hope you can attend this important information presentation.


Selling your business

Posted on November 7th, by Big Chief in Blog. Comments Off

Selling your business can be a rewarding time where you receive the value of your years of time and effort you invested to build a company.

Many sellers are then surprised to learn that the proceeds from the sale left over to them, after paying taxes, can sometimes be less than 50%.

Investing time as early as possible in consultation with a professional can lead to a much higher amount of the value of your company winding up in your hands instead of Uncle Sam’s.

Consulting with a professional will lead to a discussion of what to sell, timing of when to sell, what type of entity is best to sell and much more.

If you are considering selling the business you built, we offer a free ½ hour consultation where we can begin to explore the process with you of keeping more of
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2014 Income Tax Bracket Increase Estimates Revealed

Posted on November 4th, by Big Chief in Blog. Comments Off

Although slow rises in prices have been paired with only modest wage increases in many sectors of the current economy, taxpayers will at least receive some relief in 2014, thanks to the mandatory annual inflation adjustments provided under the Tax Code, according to CCH, part of Wolters Kluwer and a leading global provider of tax, accounting, and audit information, software, and services.

Wolters Kluwer, CCH released estimated ranges for each 2014 tax bracket as well as projections for a growing number of inflation-sensitive tax figures, such as the personal exemption and the standard deduction.

“Indexing for inflation has become an established part of our tax system, and it is likely to be a part of the tax law for the foreseeable future – even as Congress debates changes to the tax rates themselves,” said George Jones, JD, LLM, and CCH senior federal tax analyst. “Most
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IRS Contractor Employees Owe Millions in Tax Debts

Posted on October 25th, by Big Chief in Blog. Comments Off

The report, from the Treasury Inspector General for Tax Administration, pointed out that the IRS’s own employees and contract employees are required under the Internal Revenue Manual to pay any federal tax debts and file their taxes on time, but employees of IRS contractors are not held to the same standards.

TIGTA found that as of June 14, 2012, 691 of the 13,591 IRS contractor employees, or 5 percent, it reviewed had $5.4 million in federal tax debt. These debts were either agreed to by the taxpayers or affirmed by the court. Of the 691 contractor employees, 352 are not currently on a payment plan to resolve their tax debts.

Most of the contractor employees appeared to have been compliant when their initial staff-like access was granted, but at least 319 contractor employees had tax debts assessed after they were granted staff-like access,
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Forward roll: How companies can move beyond traditional budgeting

Posted on October 21st, by Big Chief in Blog. Comments Off

For more than a decade, Tim Quinn, CPA, CGMA, negotiated the tedious, back-and-forth magic of building the annual budget for Northern Quest Resort & Casino.

Every year, it was the same time-consuming endeavor: Quinn, the company’s vice president of finance, would send out budget worksheets to 45 department heads. The department heads would return them with inflated spending projections, or low-balled revenue projections, for the coming fiscal year. Quinn would question the validity of those projections. Pushback would ensue, but Quinn and his staff would prevail, often by adjusting the projections to something that more realistically reflected historical trends.

After several rounds of wrangling, voilà: The budget was born.

That laborious process would take as long as five months—so long that business conditions usually changed in such a way that the approved budget ended up being more a window to the past than a guide
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Federal Government Shutdown – It’s Deja vu All Over Again

Posted on October 15th, by Big Chief in Blog. Comments Off

There’s an old adage that “there’s nothing new under the sun” and so it is inside the Beltway.  As you are well aware, the federal government suspended most of its operations on Oct. 1 after Congress failed to pass a bill to extend funding to mid-November, the first such shutdown in 17 years. Strong political discourse is alive and well in America and it is part of the price we pay for democracy.  It was that way in 1996 when a shutdown lasted three weeks. Hopefully a compromise can be reached quicker this time around.

On the tax front, with more than 85,000 Internal Revenue Service workers now furloughed until Congress reauthorizes spending, many non-essential IRS functions have shut down, including all taxpayer services, as well as examinations. The closure of taxpayer and practitioner hotlines is particularly challenging for those individuals who must
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IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown

Posted on October 4th, by Big Chief in Blog. Comments Off

The Internal Revenue Service has temporarily stopped sending out tax refunds, and the Tax Court has suspended operations during the federal government shutdown, as lawmakers in Congress continue their battle over delaying or defunding “Obamacare” for a year.

“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

“Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law,” said the IRS. “The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.”

In addition, the IRS
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Treasury Puts a Date on When Cash May Run Out: Oct. 17

Posted on September 27th, by Big Chief in Blog. Comments Off

WASHINGTON — The Treasury has handed Congress an urgent deadline: Oct. 17.

On that day, unless Congress were to raise the debt ceiling, the Treasury would have only $30 billion cash on hand, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.

That warning – and the threat of a financial crisis – have become entangled in the budget and financial negotiations on Capitol Hill, where legislators are already engaged in a partisan battle that has led to a budget impasse that could shut down the federal government on Oct. 1.

Separately on Wednesday, the nonpartisan Congressional Budget Office estimated that the Treasury would exhaust all its extraordinary measures and run out of free cash between Oct. 22 and Nov. 1.

In a letter to Speaker John A. Boehner of Ohio, Treasury Secretary Jacob J. Lew
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Home Starts Weaker Than Forecast as Fed Keeps QE: Economy

Posted on September 23rd, by Big Chief in Blog. Comments Off

Builders began work on fewer U.S. homes than projected in August, helping explain why Federal Reserve policy makers decided to maintain stimulus aimed at sustaining the economic expansion.

Sept. 18 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke speaks about the central bank’s decision to maintain the $85 billion pace of monthly bond purchases. He speaks at a news conference in Washington. (This is an excerpt. Source: Bloomberg)

Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated, a Commerce Department report showed today in Washington. The median estimate of 83 economists surveyed by Bloomberg called for 917,000. Permits, a proxy for future projects, dropped more than forecast.

Builders such as Hovnanian Enterprises Inc. say any industry slowdown caused by the highest mortgage rates in more than two years will prove short-lived. The yield on Treasury
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Same-Sex Married Couples must file before Sept. 16 to File as Single

Posted on September 13th, by Big Chief in Blog. Comments Off

Same-sex married couples must file before September 16 to file as single (09-13-13)

Same-sex married couples who are on extension, but wish to file as single one last time, must file before September 16, 2013. Original returns filed by same-sex married couples on or after September 16, 2013, must be filed using a married filing status. Taxpayers wishing to amend from single to married for prior years may do so for any year where the statute of limitations has not expired.

The application of Revenue Ruling 2013-17, and the effect on taxpayers’ filing status, depends on the tax year in question:

For tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after September 16, 2013 (the effective date of Rev. Rul. 2013-17), generally must file using a married filing separately or jointly filing status;
For tax year
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Honey, I Shrunk the AMT (But It’s Not Gone)

Posted on September 9th, by Big Chief in Blog. Comments Off

The tax act Congress passed early on New Year’s Day permanently patched the alternative minimum tax (AMT), sparing tens of millions of Americans from the additional levy. But it won’t protect everyone. The AMT will continue to raise the taxes of a few million taxpayers each year, often in seemingly capricious ways. And more and more Americans will owe AMT in future years.

New estimates from the Tax Policy Center project that 3.9 million taxpayers will pay an average of about $6,600 in AMT for 2013, increasing their average effective tax rate by 1.7 percentage points. And the percentage of taxpayers who owe the additional tax—4.2 percent this year—will rise steadily over the next decade before leveling off at about 5.5 percent. That means more than 6 million taxpayers will pay AMT in 2023.

As in the past, married couples, families with more children, and
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Small Business in IRS Sights

Posted on September 3rd, by Big Chief in Blog. Comments Off

Thousands of small-business owners have received letters from the Internal Revenue Service questioning whether they are underreporting their business income, a harbinger of a broader initiative aimed at boosting federal tax receipts and ensuring compliance.

The program is the latest move in the agency’s effort to combat what it sees as a widespread problem: failure by businesses, including mom-and-pops, to report all cash sales in order to minimize tax bills.

 Tax officials say the letters don’t constitute an audit and instead are simply a request for more information. Some business owners and some lawmakers, however, call the new IRS program alarming.

“There’s an emotional thing when you get a pretty ominous-looking letter from the IRS, [saying] you might have done some bad things,” said Tom Reese, owner of Hearing Well Inc., which operates a small chain of stores that fit and sell hearing
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Michael Jackson estate owes $702 million in taxes

Posted on August 27th, by Big Chief in Blog. Comments Off

A recent article from Reuters found that the estate of pop music legend Michael Jackson owes $702 million in federal taxes and penalties.  The main issue is the wide difference between what the estate said Jackson’s legacy was worth versus what the IRS determined was its taxable value. Here’s a further look into this issue::

Estate taxes occur when the value of what you own when you pass away exceeds the limit set by code (currently at  $5,250,000  for those who pass away in 2013 and later).
 The value of the items in your estate is set by appraisal.
 In addition, where partial interests are owned, or where there is a lack of marketability, a discount can be taken.
 The discounts are subjective.
 That appraisals and discounts are subject to challenge by the IRS.
 This can result in an increase in the estate tax as occurred in the estate
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IRS adopts “Simpler Option” to calculate business use of a home (office in the home)

Posted on July 31st, by Big Chief in Blog. Comments Off

Effective for the tax year 2013 the Internal Revenue Service (IRS) released a simplified option for how to calculate an office in the home or business use or a home deduction.
Under this new method:

A taxpayer can elect either the simplified method or the actual expense method (the current method) for their 2013 and later returns.

Under the actual expense method, taxpayers calculate all their costs (depreciation on the home, mortgage interest, property taxes, utilities, insurance, HOA, repairs, etc.) and then apply a percentage based on the square foot space of the office vs. the total house.
Using the simple method, they would instead multiply $5 per square foot times the office space up to a maximum of 300 square feet (or a $1,500 deduction each year).

A taxpayer may elect either method for any year, but once a specific method is elected for
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[VIDEO] Gregory W. Beck on Individual Provisions of the 2012 Tax Relief Act (3 of 3)

Posted on July 31st, by Big Chief in Blog. Comments Off

In January 2013 President Obama signed into law the American Taxpayer Relief Act.

Although there were many provision and tax increases, there were also some interesting opportunities. In the third and final installment regarding the 2012 Taxpayer Relief Act, Greg discusses changes to the Alternative Minimum Tax, Estate Tax rules and other provisions to this law.

To schedule a FREE, 30 minute consultation with Gregory W. Beck, CPA, please call (714) 538-1040. 


[VIDEO] Gregory W. Beck on Individual Provisions of the 2012 Tax Relief Act (2 of 3)

Posted on July 3rd, by Big Chief in Blog, Uncategorized. Comments Off

The 2012 Income Tax Act contains several provisions that affect individual tax payers.

In this segment, Gregory W. Beck, CPA explores the changes affecting individual tax rates, the new 39.6% rate, the new limitation on itemized deductions and personal exemptions as well as other provisions.


[VIDEO] Gregory W. Beck, CPA on the 2013 American Taxpayer Relief Act (1 of 3)

Posted on May 10th, by Big Chief in Blog, Uncategorized. Comments Off

In January 2013 President Obama signed into law the American Taxpayer Relief Act.

Although there were many provision and tax increases, there were also some interesting opportunities. In this video, Gregory W. Beck, CPA discusses some of the opportunities in the provisions that relate to business expenses and depreciation. (Click below to watch)

To schedule a FREE, half hour consultation with Gregory W. Beck, please call (714) 583-1040.


Important Tax Dates to Remember for 2013

Posted on February 12th, by Big Chief in Blog, Uncategorized. Comments Off

Important Tax Dates to Remember for 2013 from Gregory W. Beck, CPA

MARCH 15, 2013

Today is the deadline for corporate tax returns this means, forms 1120, 1120A, and 1120S. If you do not complete your corporate return today a request for a 6-month extension, form 7004, must be filed.

APRIL 15, 2013

Deadline to file individual tax returns, Form 1040, 1040A, or 1040EZ. Or you may request an Automatic Extension (Form 4868) for the year 2012 which will provide you with six extra months to file your tax return. Payment of the tax is still due by April 15th.
The Form 1041, deadline to file estate income tax or trust income tax returns or a request for an automatic 5-month filing extension (Form 7004).
Deadline to file your partnership tax returns, also known as the Form 1065. You may also request an automatic 5-month extension
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Press Release – New Website Launch

Posted on January 24th, by Big Chief in Blog. Comments Off

The Offices of Gregory W. Beck, CPA – A Professional Corporation Announce New Website Launch

Gregory W. Beck, CPA – A Professional Corporation recently launched a new and improved interactive website for its Orange County, CA-based accounting firm.

Located at http://www.beck1cpa.com, the new website makes it clear to visitors that the strength of Gregory W. Beck, CPA reaches well beyond the typical variety of financial, tax and accounting firm general services. Gregory W. Beck, CPA specializes in meeting the unique needs of non-public, closely held businesses through areas such as strategic business planning and part-time CFO Services.

“Greg has an impeccable reputation and provides a wide range of general and specialized tax skills – we wanted to showcase this range visually and make Greg’s vast experience the focal point of the site.” said Alex Ribble, owner of Digital Marketing Firm Big Chief Creative
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2012 Taxpayer Relief Act Protects Key Individual Tax Breaks

Posted on January 4th, by Big Chief in Blog. Comments Off

2012 Taxpayer Relief Act Protects Key Individual Tax Breaks By Gregory W. Beck, CPA

On Jan. 1, 2013, Congress passed the American Taxpayer Relief Act (2012 Taxpayer Relief Act), which the President has vowed to sign as soon as it is ready for his signature. The 2012 Taxpayer Relief Act will prevent many of the tax hikes that were scheduled to go into effect this year and retain many favorable tax breaks that were scheduled to expire, but will also increase income taxes for some high-income individuals and slightly increase transfer tax rates from 2012 levels. Further, it extends a host of expired and expiring tax breaks for businesses and individuals.

This Special Study explains the key individual tax breaks, including a continuation of the Bush-era tax rates for most taxpayers and a permanent AMT “patch,” that are provided in the 2012
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Latest Tax News For Businesses and Individuals

Posted on December 19th, by Big Chief in Blog. Comments Off

Right now, the only thing that congress and the executive branch can agree on is to disagree. Based on that, 2012 and 2013 will have a lot of uncertainty. Here are some highlights about the tax law that we know now or expect for 2012 and 2013:

Expiring (as in gone) provisions after December 31, 2012:

The 2% Social Security payroll tax cut – expect net checks in 20132 to decrease as Social Security increases back up to 6.2% of wages up to $113,700 (yes the dollar limit is up too!).
The tuition deduction expired after 2011 (not available for 2012) but the education credit is still available for 2012 and beyond.
Mortgage insurance (PMI) is not deductible in 2012.
The 50% bonus depreciation on business assets expires after 12/31/2012.
The estate tax exemption of $5.12 million will decrease to the $1 million level.  The default
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Year-End Tax Planning For Individuals

Posted on November 27th, by Big Chief in Blog. Comments Off

Year-End Tax Planning For Individuals By Gregory W. Beck, CPA

In most years, taxpayers adopt a strategy of deferring income, but with the Bush-era tax cuts set to expire on December 31, 2012, income tax rates and capital gains taxes set to rise, and a 0.9 percent Hospital Insurance (HI) tax applicable to earnings of self-employed individuals or employee wages in excess of $200,000 ($250,000 if filing jointly) effective January 1, 2013, it might make more sense to accelerate income into 2012 instead of deferring it to 2013.

Here are some of the ways you can do this:

Sell any investments on which you have a gain this year and take advantage of the zero percent long-term capital gains tax rate if you’re in the 10% or 15% tax bracket, or a 15% tax rate for higher tax brackets.
If you are expecting a
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Tap Your Retirement Money Early and Minimize Penalties

Posted on November 21st, by Big Chief in Blog. Comments Off

The purpose of retirement plans such as the 401(k) and Individual Retirement Account (IRA) is to save money for your retirement years. As such, the IRS imposes a penalty of 10% for early withdrawals taken from qualified retirement plans before age 59 1/2. Qualified retirement plans include section 401(k) plans, individual retirement accounts (IRAs), and 401(k) plan, tax-sheltered annuity plans under section 403(b) for employees of public schools or tax-exempt organizations.

While you should always think carefully about taking money out of your retirement plan before you’ve reached retirement age, there may be times when you need access to those funds, whether it’s buying a new house or pay for out of pocket medical expenses. Fortunately, IRS provisions allow a number of exceptions that may be used to avoid the tax penalty.

If you are the beneficiary of a deceased IRA owner,
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Three Most Common Budgeting Errors

Posted on November 21st, by Big Chief in Blog. Comments Off

Three Most Common Budgeting Errors by Gregory W. Beck, CPA

When it comes to creating a budget, it’s essential to estimate your spending as realistically as possible. Here are three budget-related errors commonly made by small businesses, and some tips for avoiding them.

Not Setting Goals. It’s almost impossible to set spending priorities without clear goals for the coming year. It’s important to identify, in detail, your business and financial goals and what you want or need to achieve in your business.

Underestimating Costs. Every business has ancillary or incidental costs that don’t always make it into the budget–for whatever reason. A good example of this is buying a new piece of equipment or software. While you probably accounted for the cost of the equipment in your budget, you might not have remembered to budget time and money needed to train staff or
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