Pacific Sunrise Tax Services

10/26/2026

The Federal Reserve announces its next rate decision on October 28th. Most economists expect rates to hold, with a possible increase in December. Here is the tax side that gets overlooked:

Interest from savings accounts, CDs, and money market funds is taxed as ordinary income, at the same rate as your paycheck.

In California, that interest is also taxed by the state, at up to 13.3%.

Interest on U.S. Treasury bills and bonds is exempt from California income tax.
At similar yields, a Treasury can leave you with more after tax than a bank account.

Compare yields after tax, not just the headline rate.

10/22/2026

“No tax on overtime”: the California catch

If you get overtime in California, the new federal overtime deduction may be smaller than you expect.

The deduction only covers the overtime premium required by federal law, which is the “half” in time-and-a-half for hours over 40 in a week.

California daily overtime (over 8 hours in a day) and double time come from state law. They do not qualify.

The deduction is capped at $12,500 ($25,000 joint) and phases out above $150,000 of income ($300,000 joint).

Starting with 2026 W-2s, employers must report qualified overtime separately. You generally cannot deduct a different amount than what the W-2 shows.

Employers: make sure your payroll system separates federal overtime from California overtime before year-end W-2s go out.

10/16/2026

The extended deadline for 2025 individual returns passed yesterday! If you still need to file, every additional month adds to the penalty. Here's what you need to know:

-Late filing penalty: 5% of the unpaid tax per month or part of a month, capped at 25%

-Late payment penalty: 0.5% per month on unpaid tax, plus interest. When both apply, the combined rate is 5% per month

- Returns more than 60 days late face a minimum penalty of $525 or 100% of the tax due, whichever is less

- Owed a refund? Generally no filing penalty applies, but refund claims expire three years after the original due date

- Never filed an extension? The penalty has been running since April 15, and the IRS can prepare a substitute return for you that ignores your deductions and credits

- Penalty relief, such as first-time abatement, may be available with a clean compliance history

09/08/2026

Business owners often wait until their CPA asks for documents to start organizing records. By then, the window to catch a deduction or fix a classification issue before filing has usually closed. A few habits that prevent this:
1. Reconcile bank and credit card statements monthly, not annually
2. Track mileage and home office expenses as they happen, not from memory in March
3. Flag any large or unusual transaction the same month it occurs

The clients who do this spend less time and money at tax time.

08/20/2026

A lesson from a recent engagement: a client came in thinking their LLC automatically meant liability protection covered everything, but it doesn't extend to tax treatment. Some things worth knowing:

A single-member LLC is disregarded by default and taxed on your personal return (Schedule C), not as a separate entity

Electing S-corp status can reduce self-employment tax, but only makes sense once net profit is consistently high enough to justify the added payroll and compliance costs

The LLC structure and the tax election are two separate decisions. One doesn't dictate the other

If you formed an LLC and never revisited how it's taxed, it's worth a conversation. It can potentially save you a lot of headache and/or money down the road.

08/12/2026

Something I've noticed working with small business owners: the ones who keep clean, current books almost never get surprised by their tax bill. The ones who reconstruct everything in March always do.

Bookkeeping isn't glamorous, but it's the difference between planning and scrambling.

08/03/2026

California's New EV Rebate: MyFirstEV 🚗⚡

If you're a first-time EV buyer in California, a new state rebate is rolling out this summer:

- Up to $3,500 off a new EV, or $1,750 off a used one — applied instantly at the dealership, no waiting for a check this program offers first-time buyers $3,500 off a new vehicle or $1,750 off a used model, delivered at the point of sale by participating automakers

- 13 automakers are participating, matching the state's investment for a combined $270 million in total available credits

- Expected to launch this month according to the Governor's latest announcement

- No income cap — the program instead uses vehicle price caps as the qualifying gate, a shift from past means-tested rebates

- There's a notable wrinkle: the standard $50,000 price cap is waived for EVs built by California-headquartered, EV-only automakers. This exemption benefits Rivian and Lucid

- If you're considering an EV purchase, this could stack with other state/utility incentives and is worth checking your eligibility before you buy

07/30/2026

"Working with Pacific Sunrise Tax Services took the stress out of tax season completely. Kenny explained everything clearly and made sure I understood my return."

Ready to feel that same way about your taxes?

07/22/2026

Behind on bookkeeping?

It happens.

We offer QuickBooks setup and ongoing bookkeeping support so your books are clean and your tax return isn't a scramble every spring.

One CPA, handling both the numbers and the filing.

07/21/2026

Trump Accounts are officially open — here's what they actually are (and aren't):

🏦 It's a new tax-advantaged account for kids (IRC §530A) — think of it as an IRA that starts at birth.
💵 Eligible kids born 2025–2028 get a one-time $1,000 federal deposit.
👪 Family and friends can contribute up to $5,000/year combined; employers can kick in up to $2,500 of that.
📈 Money grows in qualifying U.S. index funds during childhood — no picking individual stocks.
🔒 It's locked until the child turns 18, then it converts into a regular traditional IRA with normal IRA rules (taxes on withdrawal, etc.).
🚫 There is no tax deduction for contributions into the account, but taxes are assessed at ordinary rates when taking distributions.

If you're already funding a 529 or thinking about one of these for your kids or grandkids, it's worth a real conversation about how the two fit together — not just opening an account because it's new.

Trump Accounts provide eligible American children with tax-advantaged investment accounts courtesy of President Donald J. Trump.