Saddleback Valley Financial Services, Inc.

Saddleback Valley Financial Services, Inc. Tax, Accounting, Payroll and Insurance Services Full service tax and accounting firm.

Specializing in:
Individual and Small Business Income Tax
Small Business Accounting/Bookkeeping
Payroll Services & Payroll Taxes
Audit Representation
Group Benefits
Individual and Group Insurance

03/03/2013

This tax season has started off pretty good. I've seen a number of new clients this season and many of them coming from H&R Block. The trend I have seen from the H&R block returns are two-fold.

First, almost every client I have seen with 2011 H&R Block returns have been paying WAY too much for their tax preparation. I've seen ranges from $309-$770 for relatively simple tax returns.

Secondly, H&R Block, from what I understand, usually completes the tax return while you wait there at the office, it shows. I've seen a number of H&R Block prepared returns where it is quite obvious they are just finishing the returns and not taking the time to get the facts straight.

I was told, recently, from an H&R Block representative at a networking mixer that 1 in 5 tax returns are audited. That statistic may be true for H&R Block but I have seen no evidence that that is the case in my 15 years experience preparing tax returns. I don't know if that is a scare tactic they have or if that is a way to justify their tax preparation fees which include audit protection, but I believe if your taxes are prepared correctly and accurately, you won't be hearing from the IRS in most cases.

If you are looking for a fair price for income tax preparation and want your taxes done right, the first time, give me a call. Saddleback Valley Financial Services, Inc. 951-272-8569

02/16/2012

I had to share this because I was so shocked when I heard this from my client. I met with a new client the other day that used "patriotic" tax service (a tax preparation chain). She files a pretty basic return, 1040 and a Schedule A, nothing else. She was charged $454 for her 2010 income tax preparation! The same type of return I prepared for her the other day cost only $165. Just because these companies advertise their low rates doesn't mean they are inexpensive. Shop around.

02/16/2012

Business Use of the Home. I hear a lot people talking about this or asking questions about this. Some things you should know about this are:
1) In order to take a home office deduction, the home office should be used exclusively and regularly as your principal place of business. ie. you can't have a business office outside of your home AND a home office.
2) The area(s) being used for business is supposed to be "exclusively" used for business. Therefore, your bedroom, which happens to have a computer desk in it, can not be used as a home office, it is not exclusively used for business.
3) If you qualify for the home office deduction, you can claim a proportionate amount of your mortgage interest, property taxes, or rent, utilities, and necessary repairs and maintenance as deductions against your Sch C income or Sch E income depending on your business structure.
4) You can also claim a deduction if you store inventory and/or samples that are regularly sold as part of your business and avoid the exclusivity rule, however, there are some rules that apply to this as well.

Contact your tax advisor, or if you do not have one or are looking for a new one, contact myself at 951-272-8569.

Mike Gledhill, CPA, EA

You already pay enough money to the IRS in taxes, your tax advisor shouldn't cost you the rest!

11/16/2011

From time to time I get questions related to this topic. Is person X a 1099 independent contractor or are they an employee? Well the answer isn’t always simple, but here are some general rules.

Does the individual in question pay for their own tools and equipment? Do they furnish their own place to work? Are they at risk for the work being performed? Do they determine how and when the work is performed? If you can answer yes to all the above questions, they are probably an independent contractor.

Employers today are doing all they can to cut their costs. This includes classifying workers as independent contractors and many times incorrectly so. The reason employers do this vary from employer to employer. So of these reasons might be:

1) It is easier to pay someone a flat rate and not worry about payroll taxes.
2) It requires a paycheck for an employee which means, possibly, using a payroll service, paying the employer taxes, Social Security, Medicare, FUTA, and in California, ETT and SUTA. This is an extra cost the employer would not incur with an independent contractor.
3) Employees would be required to be on group health insurance plans, business retirement plans, etc. Many times employers have plans in place where they are deriving a great benefit to themselves in high, tax deductible, contributions to their own retirement plans. Having employees would mean that they would have to put money away for the employees as well, which costs them money.
4) Some employers just don’t know any better.

There can be numerous other reasons why employers classify workers as independent contractors, but doing this incorrectly can result in significant costs, including penalties from both the state and federal government and potential loss of tax deductible contributions to retirement plans or their tax favored status.

Mike Gledhill, CPA, EA
951-272-8569

11/07/2011

Looking for year end tax planning tips? Here are some common ways to save on federal income taxes before the year is out. Consult a tax professional before making these decisions as they may not have the best overall benefit to your specific situation.

1) Pay any state estimated income tax payments before 12/31 that are due by 1/15 of the following year.
2) Consider paying your 2nd property tax payment before 12/31.
3) Businesses can benefit from asset purchases before year end and, in most cases, use an accelerated depreciation rate capturing all or most of the asset value as a deduction in the current year. (Section 179 depreciation)
4) Year end is a great time to make last minute tax deductible donations to your favorite religious organizations or charities. Be sure to keep a paper trail or receipts.
5) Consider evaluating your retirement planning contributions, or start up a retirement plan if you don't yet have one. A good tax professional will be able to advise you on the pros and cons of all sorts of options available to individuals and businesses and help you to determine which plans will work best for you. Avoid, in most cases, using annuity products in tax deferred vehicles. These products are often sold by financial advisors because of their higher commission rates, but are many times not the best choice for the end consumer.

Always keep your tax advisor in the loop when making major tax decisions, many times there can be better alternatives that just may save you a lot of money.

Mike Gledhill, CPA, EA
951-272-8569

11/04/2011

IRS Announces Pension Plan Limitations for 2012
The IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2012. In general, many of the pension plan limitations will change for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged. Highlights include:
* The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $16,500 to $17,000.
* The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.
* The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000.
* The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011. For singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.
* The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $57,500 for married couples filing jointly, up from $56,500 in 2011; $43,125 for heads of household, up from $42,375; and $28,750 for married individuals filing separately and for singles, up from $28,250

06/25/2011

Are you a U.S. citizen with a foreign bank account or signature authority in a foreign bank account with an account value of over $10,000 at any point in 2010 or prior? If so, you will need to file form TDF 90-22.1 by 06-30-2011 for the 2010 year. There is amnesty for prior years dating back to 2004 which allows you to file for those prior years by 08/31/2011. Fines can be up to $50k per year.

03/26/2011

Has your California Corporation received a letter from Corporate Compliance Center asking you to fill out a form for your mandatory annual minutes? Why pay $125 when you've already done 90% of the work for them? Save your money and do it yourself. Contact me if you need some help.

03/17/2011

Are you self-employed or do you have 1099 income? Do you net more than $50k/year? Consider creating an S-Corporation. This will give you added liability protection for you and your business and save you tax dollars, even after costs, professional fees and taxes. It is a great money saver! Contact me if you have questions.

03/15/2011

Tax Tip: Common mistake for many small business owners is to try to deduct an "Auto Allowance". While you can technically do this, it is also considered income to the individual and should be reported on the W-2 if it is a corporation. Instead, stick with the standard mileage rate or actual expense (using a % of business usage calculation).

03/09/2011

Tax Deadlines coming up. Corporations due 03/15/2011. Individuals and Partnerships due 04/18/11 (Due to weekend and holiday). Call 951-272-8569 if you need assistance or if you are looking for a change.

Welcome to the website.
03/08/2011

Welcome to the website.

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Corona, CA
92880

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(951) 272-8569

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