• 3 Common Tax Mistakes Entreprenuers Make

    April 15 is coming soon.  As an entreprenuer you have some extra work to do.  The temptation is to get the returns done as quickly as possible.  Speed can lead to mistakes, however, and in the case of filing your tax returns, mistakes can lead to penalties and audits. Here is a quick summary of three of the most common tax mistakes entreprenuers make that may eventually end up on the desk of one of our certified tax law attorneys:

  • A New 3.8% Income Tax Increase For You, Compliments of Obamacare

    If you are a high-income taxpayer, 2013 was a drag. You had to pay the new Net Investment Income Tax (NIIT), essentially a 3.8% assessment on some of your investment income. The NIIT was passed into law in 2010 to help pay for ObamaCare (the Affordable Care Act), but it didn’t take effect until 2013. The NIIT affects everyone whose modified adjusted gross income is above $200,000 for an individual or $250,000 for a couple. This income bar won’t be adjusted for inflation as the law is written, which is also a drag. What’s subject to the NIIT, you ask? Quite a bit...

  • Brace For A Higher Tax Burden In 2014- Notes From Ernst & Young's Tax Policy Outlook

    Ernst & Young (EY) recently released their 2014 outlook for global tax policy. As of the publication of this report, EY had surveyed 61 countries, including the United States. Just 10 countries out of the 61 surveyed had announced any reductions to statutory corporate income tax (CIT) rates for 2014. Based on the fragile nature of the world's recovery from the Great Recession, this isn't particularly surprising, no matter what your political leanings are. Something that got our attention, though, was the fact that there will be fewer changes to headline corporate, personal and indirect tax rates in 2014 compared with 2013 and 2012. Instead, more governments are putting legislative changes in place that will adjust and expand the tax base for 2014 and beyond, often at the net expense of taxpayers. Some other interesting notes from the report:

  • Can it be Trashed Now? Tax Record Retention Guidelines

    Paper, paper and still more paper!

    When can these documents be destroyed? We get questions about tax backup documentation from clients often.  To assist you, we provide some ideas to carefully consider when deciding about destruction of any documents.

  • Estate Planning: How Your Vacation Property Can Provide Savings

    Property values in Santa Barbara and on the Central Coast have, for the most part, recovered from the Great Recession. Property values are generally rising. For many families, primary residences, vacation homes and vacation rentals are their most valuable assets, and therefore worthy of some thought to protect and leverage them. There are good estate planning techniques available to take advantage of these properties. One of the more straightforward of these techniques is the use of a Qualified Personal Residence Trust, otherwise known as a "QPRT". Gifting a primary residence or a second home to a QPRT is a clear-cut way for grantors to significantly reduce the value of their taxable estate with minimal disruption to their daily lives, and to ultimately pass more assets along to their heirs.

  • Federal Tax Revenue Officially Above $3 Trillion for First Time Ever

    The Treasury Department has released figures showing that federal tax revenue exceeded $3 trillion in fiscal year 2014. This is a new record. There was a nearly $247 billion increase in revenue in fiscal year 2014 from 2013. There were two large tax increases passed in that time: the 2013 tax increases to offset the expiration of Bush-era tax cuts, and the tax hikes in the Affordable Care Act. The economy is still bumping along pretty slowly. Even in a slow economy, though, just a little bit of growth will equate to more tax revenue for the federal government...

  • For Seniors Looking For New Investments, Some Tips

    You may know somebody in the twilight of their life that has worked and saved and invested diligently over the decades, and is now reaping the rewards of that lifelong effort. This somebody may even be you. All the smart 65+ folks I know don't shut their brains off in retirement- if they are even retired. In fact most I know are still eager to find something new to succeed in.  For the Seniors that haven't invested in a while that want to get back in the game, though, there are a few things to keep in mind while considering new investment products that weren't relevant earlier in life.

  • Kickstarter Funds Raised Are Taxable Income- Or Are They?

    Kickstarter has a tax help page on their website that states that funds raised on Kickstarter are generally considered income. Their website also says that recipients may be able to classify funds as "nontaxable gifts", with no additional guidance as to what qualifies as a gift.  So how do you know if the funds are income or gifts, and what are the tax implications? 

    For creative entrepreneurs, a Kickstarter project is an alternative way to raise money. For those not familiar with the paradigm, it works like this: A Kickstarter Project Creator sets a funding goal and a deadline date for their project. If people like it, they can pledge money to the project. If the project does not raise enough money to meet the funding goal within the project deadline, everybody gets their money back. All or nothing. 

  • Real Estate Co-Ownership Agreements

    With the high price of real estate, we increasingly see arrangements between parents and children, unmarried couples, or friends who pool money to buy residential property. Owners often do not understand their rights and responsibilities. This article is intended to educate potential co-owners by asking questions that affect their relationship.

    A written co-ownership agreement maximizes the odds of a successful relationship. It does so in two ways. First, it documents the parties’ understanding. The best time to decide what each person gives and receives, and when, is before any disagreements arise. Secondly, creating the agreement means that the parties must think about and resolve issues they otherwise might not consider. Resolution is much easier before we have a stake in the outcome.

  • Tax Inversions: An Unpatriotic Loophole Or An All-American Response to Overtaxation?

    President Obama recently called corporate tax inversions an "unpatriotic tax loophole".  The multi-national American corporations that are the beneficiaries of the loophole responded by saying that, if the U.S. had a lower corporate tax rate and a simpler tax code, fewer companies would pursue inversions. Although tax inversions have been around since the early 1980's, tax inversions have been in the news in 2014.

    What, exactly, is a tax inversion? How much do tax inversions actually affect corporate taxes? Is the tax inversion loophole different than other tax loopholes? How soon are tax inversions going to be shut down by DC?  

  • The Big Roth IRA Mistake

    Raiding a retirement account is a last resort: you’re losing tax-free compounding interest on the amount you withdraw, and you can’t replace the money withdrawn. In this day and age, though, the last resort is being tapped more than any of us would like. 

    The big mistake occurs because people don't know the answer to the big question, "Do you know how much you can pull out of your Roth IRA tax-free and penalty-free before retirement?"

  • The Most Expensive Way To Transfer Your Wealth Is To Die With It

    Anyone who has thought about what to do with the wealth they've accumulated when they die has also thought about the cost of transferring that wealth. We all know we can't take it with us when we go, and we all go. Death is one of those "law of nature" things. Right now, Baby Boomers are in the middle of the greatest transfer of wealth in our nation's history ($59 trillion, according to the Center on Wealth and Philanthropy at Boston College), yet the savings/investing statistics for this generation are not good. Baby Boomers didn't start investing soon enough, didn't invest enough, and now it costs more per dollar to preserve what there is. OK, so I guess this generation just blew it.

    Instead of wringing their hands and moaning, "woe is me", though, the Baby Boomers are already over it, and looking to the future. Now it's about the grandchildren.

  • Understanding Federal Estate Taxes

    Federal and state taxes are important factors to consider when administrating a trust, going through probate court, or in any stage of the estate planning process. Taxes are so important that even the idea of an estate exists largely for taxation purposes. After all, as the name implies, only the “taxable estate” is subject to taxation after death. For your estate to survive the probate process intact, you must understand your taxable estate and how to protect it.

  • US Treasury Targets More Estate Taxes in 2015

    IRSThe United States Department of the Treasury will not do much in 2014, what with it being an election year and all. The year 2015, however, is a different story.  It is not too early to make some reasonable guesses as to what estates and estate planners can look forward to.  In fact, the 2014 General Explanations of the Administration's Fiscal Year 2014 (the Green Book) proposals that pertain to estate planning offer a view of what could potentially happen in 2015. Here are some bullets on a few of the key provisions of the Green Book proposals.

  • What are Death Taxes And What Does The POTUS Want Changed?

    "Death Taxes" generally refer to estate taxes. Estate taxes are any taxes applied to the transfer of a person’s assets at death. Taxable assets include personal property such as a house, cars, furniture or musical instruments, business assets like land, equipment and inventory, and investments like stocks, bonds and real estate.

    President Obama proposed a change to estate tax policy in his January State of the Union address that was aimed at removing the step up basis at death provision. The proposed change would affect a lot of families and family-owned businesses, including many in Santa Barbara, Ventura and San Luis Obispo counties.

    So what is the step up basis and what is its purpose? The step up at death basis works like this:

  • You Just Inherited An IRA, Want More From It?

    You just inherited a $300,000 Roth IRA from a recently deceased relative. If you handle it correctly, you can parlay this into a very pleasant addition to your retirement income. Since the Roth IRA income is tax-free, you can cash it in right now, and you'll get all $300,000. Very nice. You could also leave it alone for 21 years, and your $300,000 would grow to $756,072. Also nice. There is, however, an even better way to make the IRA inheritance work for you.

Practice Areas And Regions Served

Rogers, Sheffield & Campbell, LLP primarily serves individuals, families and businesses up and down California's Central Coast and North Los Angeles County, including many Santa Barbara, San Luis Obispo, and Ventura County communities.

Our experienced legal team includes business lawyers, real estate lawyers, tax lawyers, estate planning lawyers and civil litigation lawyers. Our areas of legal practice expertise include Business Law, Entity Formation, Real Estate Law, Tax Law, Estate Planning, Wills, Trusts, Probate, Wine Law, Vineyard Law, Civil Litigation and Alternative Dispute Resolution.

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