DiSabatino CPA Blog

Mike DiSabatino CPA

Mike is the founder of the firm of Michael DiSabatino, CPA.  He produces this blog to keep his clients and friends informed of new tax laws, tax saving strategies, as well as, business tips. 

If you have a question or comment for Mike, please use our Contact Form to reach out for us.

More time to file, pay for California taxpayers affected by the COVID-19 pandemic

 “During this public health emergency, every Californian should be free to focus on their health and wellbeing,” said State Controller Betty T. Yee, who serves as chair of FTB. “Having extra time to file their taxes helps allows people to do this, as the experts work to control the spread of coronavirus.”

This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes:

  • Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.
  • Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.
  • Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.

The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period.

Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.

The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.


 As always, feel free to pass this Tip along to friends, and reach out if you need help with your personal tax and finance situation. 

DiSabatino CPA
Michael DiSabatino
651 Via Alondra Suite 715
Camarillo, CA 93012
Phone: 805-389-7300
ww.sharpcpa.com
 
This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. All rights reserved.
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Kiddie Tax Rate Hike Rolled Back

Parents of young children will always have plenty to worry about. New tax legislation passed at the end of 2019 eliminates at least one of these worries. The new law repeals a provision that increased the tax a child had to pay on unearned income.

Best of all, these revised "kiddie tax" rules may be claimed retroactive to 2018, when the change initially took effect. It’s as if it never happened!

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Do I Really Need That #!*>x$! Tax Form 1095? Stop holding up your tax filing

Tax Form 1095 has been nothing but a headache since its introduction. This federally mandated form adds complexity, creates taxpayer confusion, and cost billions of dollars to produce. The purpose of the form is simple: to relay proof of your health insurance coverage, but too many taxpayers are now delaying filing tax returns while waiting for this form.

Top line: STOP WAITING for the form to file your tax return! At least for most of you.

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March DiSabatino, CPA Newsletter

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 March 2020

In this Issue:

 

This Month:

  • March 16th: Due date for partnership and S corporation tax returns (Forms 1065, 1120S)
  • March 17th: St. Patricks Day
  • Reminders:
    • Daylight saving time begins Sunday, March 8

   The tax filing deadline is right around the corner! As you're busy gathering your tax documents or reviewing your tax return, included here is a caution concerning the security of IRS online applications and websites. 

If you're an independent contractor, there is an article outlining tips for surviving the world of self-employment. 

This issue also includes an article on the pros and cons of renting or buying a home and an interesting article on new viewing alternatives targeting younger audiences. 

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

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Make the Most of Recent Retirement Rule Changes - Reap the benefits of new laws

Recent legislation makes changes to popular retirement savings plans like IRAs and 401(k)s. Here are the major changes and how you can benefit from the new rules.

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Elections. Elections. Elections. - Tax savings can be found in the elections you make!

Every year is an election year when it comes to making decisions on your annual income tax return. Here are four common examples that can create tax savings opportunities if you elect the correct option.

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The IRS Says "Gotcha!" Late filing of S corporation and partnership returns can be costly

The last couple of years, the IRS has been penalizing late filers of S corporation and partnership tax returns. This despite the fact that late filing of the tax returns (Forms 1120S and 1065), due March 15th, often does not impact the receipt of the taxes due on April 15th. Those that are getting this penalty are often couples and other small firms who have formed these business entities to provide legal protection for their shareholders.

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February DiSabatino, CPA Newsletter

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February 2020

In this Issue: 

This Month:

  • February 14: Valentine's Day
  • February 17: Presidents' Day
  • Reminders:
    • Collect all tax forms (W-2s, 1099s, others)
    • Set up tax appointment
    • Rebalance investment portfolios

   The 2019 tax filing season is in full swing. If you have not already done so, now is the time to collect your tax forms, organize your records and set a schedule to get your tax return completed.

Deep in the Form 1040 instructions is an annual recap of federal income and how the money is spent. Since most taxpayers no longer see these instructions, a recap of this information is provided here for your review.

Given late breaking tax laws, now is a good time to read a review of how newly passed retirement rules could help you save more. This issue also includes an article with several interesting facts about Valentine’s Day and for small business owners, some information is provided to help your employees navigate the new W-4 paycheck withholding form. 

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

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January DiSabatino, CPA Newsletter

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 January 2020

In this Issue: 

This Month: 

  • January 1: New Year's Day
  • January 15: 4th Quarter Estimated Payments Due 
  • January 20: Martin Luther King Jr. Day 
  • Start Tax Planning for the New Year
    • Adjust Withholdings
    • Organize Filing Records
    • Schedule Tax Consultation 
    • Rebalance Investment Portfolio

   Welcome 2020. A new year calls for a fresh look at your financial strategies. Consider how to make the most of your savings accounts — and don't forget you still have time to fund your IRA! You can also try the following fail-proof tricks to keep your New Year's resolutions on track.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

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December DiSabatino, CPA Newsletter

December 2019

In this Issue:

This Month:

  • December 22: Hanukkah begins
  • December 25: Christmas Day
  • December 26: Kwanzaa begins 
  • January 15: 4th Quarter Estimated Payments Due 
  • Take Final Year-End Actions: 
    • Deductible Gifts 
    • Capital Gains/Losses
    • Charitable Giving 
    • Dividend Income 

   It's almost New Year! Have you done your yearly credit report checkup yet? While you're at it, protect yourself from charity scams this season by reviewing some big red flags, and learn how to prioritize cash flow in your business. 

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

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November DiSabatino, CPA Newsletter

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 November 2019

In this Issue:

This Month:

  • November 11: Veterans Day
  • November 28: Thanksgiving
  • November 29: Black Friday (Shopping Deals Day)
  • Reminder: Conduct year-end tax and financial planning

2020 is coming quick — are you prepared? Take stock now and learn about the year-end moves that'll help you save. Plus, consider how the 2020 Social Security changes will affect your plans. And make sure you're hitting the employment tax deadlines.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

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October DiSabatino, CPA Newsletter

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 October 2019

In this Issue: 

This Month:

  • October 1: SIMPLE IRA plan establishment due
  • October 15: Extended individual and C-Corp Tax Return Filing Deadline
  • October 31: Halloween

   Autumn's in full swing, meaning it's time to start preparing for the busy months ahead. You can get ready by learning about the Form 1040 updates you'll see this 2019 tax season, as well as the new Marketplace Facilitator sales tax laws for anyone that sells through Amazon or eBay. You can also brush up on your rights if a bill collector ever harasses you.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

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How to Maximize Deductions for Assisted Living

It's possible that someone in your family will need assisted living care at some point in their life. This care can be at an assisted living facility, a nursing home, or in their own home. Often, assisted living care is expensive and not fully reimbursable by typical health insurance policies. Thankfully, there is a medical expense itemized deduction when the out-of-pocket amount exceeds 10 percent of your adjusted gross income.

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The Marriage Penalty is Alive and Well

Despite what you may think, the marriage penalty is still alive and well. Whether you’re changing your filing status in 2019 because of marriage, divorce or another event (or it’s staying the same), you should review this information and plan accordingly.

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A Smarter College Housing Option

Does your child, grandchild, or someone else you know need a place to live while attending college? Instead of renting a dorm or apartment, buying a condo or small house might make more sense. This can save money and provide tax breaks, but you need to do the math and be aware of the risks.

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August DiSabatino, CPA Newsletter

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August 2019

In this Issue: 

  • I Owe Tax on That? 5 Surprising Taxable Items
  • Headed to the Fair? Avoid These Spending Traps
  • Smart Tactics to Manage Student Debt
  • Cash Flow Concepts That Can Save Your Business

This Month:

  •  September 2: Labor Day

Summer is starting to wind down and the kids will soon be headed back to school. Now is a great time to review if you've had, or will have, any special taxable events this year. The first article highlights five taxable items that come as a surprise to many people. This month's newsletter also includes spending traps to avoid when headed to the fair, ways to manage the burden of student loan debt, and cash flow strategies that can save your business.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

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Avoid the Pitfalls of Selling Property to Family

Suppose you own property you intend to transfer to your loved ones. Perhaps you are considering giving your children an ownership interest in your principal residence. Before you act, you should review the tax consequences of your decision. Specifically, tax law includes several provisions involving sales to related parties. As you might imagine, this covers relatives like your children, grandchildren and siblings, but it also applies to business entities you own. Here are four common situations you may encounter, and tips to help you avoid tax trouble:

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IRS ALERT: Two New Tax Scams

The IRS remains on the lookout for tax scams that can blindside unsuspecting taxpayers. Now two variations of past scams are currently making the rounds. Here’s what you need to know:

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Retirement Basics: Understanding Tax Efficiency

One of the basics in retirement is to be as tax efficient with your income as possible. In 2019, income tax rates range from 0 to 37 percent, plus a potential 3.8 percent net investment tax. Understanding how these progressive tax rates apply to ordinary income creates a tremendous retirement planning opportunity.

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Don't Fall for These 5 Audit Myths

When it comes to the perception of IRS audits, conjecture reigns supreme. The combination of the complex tax code and a government agency with the full authority to enforce it leads to some pretty wild ideas. Separating truth from fiction is an important exercise for everyone. Here are five audit myths that, if believed, can cost you during an audit:

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