2013 Year End Tax Planning Ideas

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2013 Year End Tax Planning Ideas

Sep 16, 2013 Posted by Sanjiv No Comments

We are now accepting appointments for the year end tax planning.  October and November are great months to get your financial books in order and plan for the year end tax.  We would like to see you in our office to discuss your unique needs.  While you set up that appointment consider some of these ideas:

Charitable gifts of appreciated property

The tax advisers suggest the tax payers that they can donate to charitable organizations through stocks, bonds, exchange traded funds and mutual funds instead of donating through cash. Donating through these appreciating financial instruments can attract tax deductions.

Tax deferred vs. Taxable investments

It requires some prudence to classify the investments intelligently so as to save tax. High income producing assets like stocks and other high dividend paying financial instruments should be classified in the deferred tax accounts, so that tax can be paid only when income arises from it. If these are classified in the taxable accounts category, then taxes paid on these would have to be frequent. Intelligent classification of products can help to save reasonable amounts of taxes. It is the duty of the tax adviser to suggest these classifications to his client.

Fund Roth IRAs for working teens and twenty-somethings

Fund Roth IRAs are an excellent option for the younger generation and the working teenagers. Usually the young are very interested to put in their hard earned money in tax savings schemes so that they can save for college education, buying property or even to maximize retirement benefits. Roth IRAs are an option where the working younger generation invests after tax funds.

The young generation is eligible for a lower tax bracket and hence pays limited tax and invests in these accounts. When the fund reaches its maturity or when the individual attains full retirement age, the benefits of the Roth IRA can be withdrawn free of any income taxes.

Loan money to kids for college or home purposes

The usual practice of the kids is to get a student loan for higher education if their parents’ income level is too high to qualify for a financial aid. However, these do not qualify for any tax deductions. Instead the other way to get tax deduction is for the parent to give a family loan to the kid for higher education. To claim tax deductions on these family loans, the paper work is very important. It should be in writing and the interest rates should be similar to what the bank rates are and upon good performance through grades, the parents can write off a part of the loan in future.

Converting IRA into a Roth IRA

Some of the employers give their employees option to convert their Individual Retirement accounts into Roth Accounts as the latter helps to withdraw the retirement benefits at a future date without any tax charges. The Roth IRA is very helpful for the younger generation as they need to pay only a minimal amount of tax while investing in these accounts.

Tax deductible gifts – Your 2013 Holiday Gift Guide

Sep 16, 2013 Posted by Sanjiv No Comments

Tax deductible gifts are the order of the day, to save taxes while holidaying. People who find tax deductible gifts as a mundane option, need to think again as the US government has introduced lots of attractive gifts in the tax deductible category as long as they are used for the right purposes.

Some of the technological gadgets that are classified as tax deductible are computers, tablets, smart phones, kindles, cameras, video cameras and modern GPS’s. The pre-requisite for making these gadgets tax deductible is that these have to be used for official purposes only. Self educational gifts are also tax deductible as this is pursued to develop one’s current skill sets. Some of the educational gifts that can be claimed for deductions are books, subscription paid for educational magazines, tuition fees paid for a course etc.

People who work from home are not left behind. There is something in this scheme for these people also. A person can gift himself a new office or some furniture and claim the same for tax deductions as these are used for official purposes; only in this case, the office is at one’s home itself. Furniture especially is a very good example of a tax deductible gift and the tax payer has the added advantage of using this for domestic purposes also.

A tax payer can gift himself a brand new car and claim tax deductions for the same as long as it is used for official purposes. There is no other pleasure than splurging in a new car and getting a tax benefit for the same. A full time employee can also claim for these deductions as long as the employer does not already reimburse this. Cars are used as tax deductible gifts mostly by contract employees, freelancers and entrepreneurs who do not have direct employers to reimburse these.

The tax payer should always note that the gifts can be tax deductible only if it is used for purely official purposes and if the IRS recognizes these gifts only if it is absolutely necessary for the business needs. Care should be taken that a gift used for personal reasons should never be claimed for tax deductions. This is a serious offence and there are high chances that the tax payer might get enquiries for audit by the IRS and this causes loss of reputation for the individual.

However the tax payer can prudently use some of the gifts for personal as well as official purposes and still claim tax deductions. Computers, for example, can be used for personal purposes as well but the individual should exercise control to claim deductions only for the official expenses part. The tax payer should keep a clean record of all receipts in order to claim tax deductions.

With these effective tax savings gifts, one can not only enjoy holidays but also have enough money to save for a rainy day. One must smartly use the tax laws to save money, the ethical way.

Dublin/San Ramon/Pleasanton

Feb 17, 2013 Posted by Sanjiv No Comments

Certified Public Accountant Dublin San Ramon CA

We are a public accounting firm of Pleasanton / Dublin / San Ramon market. Pleasanton Office of Sanjiv Gupta CPA provides accounting, tax preparation and consulting services for entire Contra Costa county residents. You can find the latest tax law updates and useful tax saving tips on our website.  You can also post your tax questions on our blog or send us a message from home page. 

Things to Know Before Hiring an Independent Contractor

Dec 10, 2012 Posted by Sanjiv No Comments

Hiring an independent contractor for jobs around the home or the office is the easiest thing to do when trying to complete non-essential business jobs such as remodelling. Depending on the type of contractor that you seek out and hire, you may get either good quality work or poor quality work. So what are some of the things that you need to put in mind before deciding on which contractor to hire. These things to look out for usually go a long way in helping you determine the suitability of a particular contractor and assure you of quality work once the job is done.

First of all, you should consider the work that is required and whether the contractor has the capacity to complete it. Most contractors will overstate their capability to handle a particular job. As such, it is up to you to perform a due diligence analysis and set a threshold that will assure you of the capacity of the contractor. Ni addition, some contractors may be blacklisted by the professional associations due to poor business practices. It is therefore important to ask for references before a contractor can begin handling a particular task.

The amount of money that you are willing to pay should also be taken into account. All things constant, money is the bottom line of all the transactions that take place between contractors and yourself. Depending on the amount of money that you are willing to spend, you should find a contractor who is willing to do the kind of job that you want at the price that you are willing to pay. You should also come up with a way to determine the quality of the job and the payment model, especially for the jobs that take a long time.

Copyrights are the ownership rights that an individual takes upon completion of a job. It is important that you and the contractor discuss  the copyrights and the extent to which either of you is going own that piece of work. In most cases, the contractor owns the resultant piece of work until such a time that the final payment is made. This should be taken into the same consideration as the implication with regard to taxes that are likely to come from having such a transaction. Taxation issues account for a very large potion of the business costs that different business meet over time.

You should account for the fact that contractors can quit at any time they wish to. This means that there is a very high likelihood that the job will not be completed on time. Most of the time, if you are paying the contractor per day, then it is most likely that they will extend the duration during which the work is to be done in order to earn a few more dollars. Such issues with contractors should be taken into account before the contract has been signed, and execution has begun.

Scams in Property Taxes: Please Take a Note

Aug 5, 2012 Posted by Sanjiv No Comments

Everyone wants their property taxes reduced. In an attempt to reduce taxes many people fall prey to tax scammers. To be safe from these scammers the taxpayers need to be careful about the following things:

  • Many times you may receive letters that look like they are from government offices but in reality they are usually from the private companies trying to fool you into giving them money.
  • Homeowners should also stay clear from any company that offers to file an assessment challenge in return of an upfront fee.
  • Homeowners should also avoid any kind of services that requires a copy of the property deed or the social security number.

Many of you must have received letters that claim to get your property assessment done for a fee that can be as nominal as a few dollars to a couple of hundred dollars. But in reality these companies just take your money and fill out property assessment form which you can do yourself without any charge. And in some cases these companies just take the money and do nothing at all.

While the government agencies send out their forms sometime in June these scammers send their form much early. In some of the states if the value of the house has gone down from the previously assessed value then the property taxes are automatically reduced. So the scammers usually target those homeowners who are hoping for a reduction in taxes. These companies send their forms or letters earlier than the government agencies and claim that they will reduce the taxes. Many homeowners pay a considerable amount to them and in June their taxes are reduced. What the homeowners fail to realise is that their taxes were naturally supposed to go down and the company has not actually done anything.

But if you are actually looking for one such company to handle your property taxes then it is better that you avoid any company that proposes to do your work for an upfront fee or your property deed or social security number. It is also better to keep away from companies that claim that they are affiliated with government agencies.

Worked in US. Now in India. How do I file?

May 5, 2012 Posted by Sanjiv No Comments

People come to United States from India for various reasons and for the similar reasons Indians go  back to India.  However, during this transition we often forget to deal with taxes.   United States Tax is based upon world wide income.  If you are a green card holder or citizen or US resident living in India than you are required to pay taxes on your income in India and United States.  This can be quite complicated.  Common questions asked by out clients are:

  • What income should I report ?
  • Should I included my retirement plan income?
  • Should I file taxes in India ?
  • Do I need come to United States to File the Tax Return?
  • I paid taxes in India, Can I get credit in United States ?
  • What kind of deductions can I claim?
  • I do business in India and US, what return do I need file ?
  • What form to file ?

Doing business in two countries can be quite difficult but our office can make your life bit easier. Our firm specialize in filing taxes for US residents living in India.  You can contact our office for a telephonic appointment or send us the details via contact us form on our home page.  Recently, Sanjiv Gupta discussed this topic on television.  You can watch that clip here for some answers.

You may be in India on temporary assignment or moved to India for some other reason but don’t forget to take care of taxes in United States.  As you know penalties for late filing and late payment are big and IRS do not accept “I moved to India” as an excuse for not filing or paying on time.   There are many credits and deductions you can take advantage but you must file your return.  Even if you can not come to United States, our firm can help you file your tax return. You can contact our office at 510-825-7563 or send message via contact us form on our home page.

Hiding Income in India is a Crime

IRS considers non reporting for income from any foreign sources a crime.  IRS has partnered up for foreign tax agencies to make sure US residents can be help accountable.   IRS is actively pursuing those individuals and businesses that hide income or assets in India or other foreign country to evade taxes.   Goal of IRS is ensure that US residents and citizens are reporting their foreign income and paying the correct tax in United States.

Consequences for Evading Taxes on Foreign Source Income

There is no mercy for those who knowingly fraud United States.   Failure to file proper tax return or failure to report foreign income can result in additional taxes,  substantial penalties, interest, fines and even imprisonment.

Do you know some one who is hiding Income in India

IRS has launched a whistle blower program and encourages you to report promoters of off-shore tax avoidance schemes.  If your financial adviser or CPA is telling you to hide income in foreign country than you are talking to a wrong person.  You should report such person to IRS.  You can also apply for reward by filing Form 211 for the reporting of such schemes.


San Jose CA | CPA

Apr 10, 2012 Posted by Sanjiv No Comments

Certified Public Accountant San Jose CA 

We are the Individual and Businesses public accounting firm of San Jose CPA.  Office of Sanjiv Gupta, San Jose CPA, provides accounting, tax and consulting services for entire San Jose residents.  You can find latest tax information and useful tax saving tips on our website.  You can also post your tax questions in our blog or send us a message from home page.  We are a boutique San Jose CA  Certified Public Accounting (CPA) firm specializing in individual and small business tax and accounting services.   Our San Jose CPA Firm has been serving the San Francisco and San Jose CA Community for last one decade.


Call Sanjiv Gupta San Jose CPA  Firm at 510-825-7563


Want make an appointment with San Jose CPA?

Simply call us at  510-825-7563  or Visit us at:


39111 Paseo Padre Pkwy # 117,
Fremont, CA 94536
  • Phone:             510-825-7563
  • Phone:             510-818-0437

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  • Monday – Friday: 9 a.m. – 5 p.m.
  • Saturday: 2 p.m. – 6 p.m.
  • Sunday: Closed

Give us call today to set up an appointment!

  • Street side parking is availble in front of the office or there is huge parking lot in the back of the office.


San Jose CPA | Certified Public Accounting Firm

Sanjiv Gupta of San Jose CPA firm has many years of experience helping both Indian and US clients.  We can help you file FBAR or ammend your tax returns to bring you in compliance with new laws.   You can consult with us to transfer money from US to India or From India to United States.   We can help you set up new business or help with tax and accounting services.   Many clients looking for San Jose CPA services contact our office for qualtiy accounting services.



What You Must Know About 2012 Tax Challenges

Apr 2, 2012 Posted by Sanjiv 1 Comment

What You Must Know About 2012 Tax Challenges

2012 presidential election summons the close of all tax benefits introduced by George Bush. This would usher in an unavoidable clash because of the new tax rules, many deductions and unchanged tax rates.

It is indeed tough to prepare a perfect tax return sheet amidst changing rules and implementation of stringent penalties. Therefore in this article we are to take a look at how to tackle the most common filing challenges

Newly implemented Capital profit rules

Worried about how to calculate taxes on you invested income this year? Heres the key rule: bought stocks after Jan 1, 2011 then you are not eligible to count your cost basis or the tax exempt investment amount. Your broker will help you calculate the amount as per your preferred method. Mostly brokers send notice of FIFO; First-in and First-out which reports your selling off older shares. Before filing or tax return analyze 1099 and ask your broker to mend all errors. Talking about 1099, Roman Ciosek, wealth management assistant at HighTower’s Strata is advising customers to slow down in their tax filing process. According to Ciosek there will be a number of amendments on the 1099s. However if you have sold your earlier shares whether willingly or because your broker advised you then you cannot alter your cost-basis.

$1billion in unclaimed tax refunds

Apart from what is discussed above, everything more or less remains in place. You can jolly well counterbalance your gains with losses. While doing so first take into account the long term (considered over a year) profits on assests that incurred tax at or over 15% and balance them with your long term losses; then balance short term gains taxed as minimum income with short term losses. Having calculated the long term accounts and the short term income separately, now you are required to match your long term records to the short term report.  If your loss margin is high considering deducting a little near to $3000 from your income. This way you will be able to manage all taxable amount the next year as well.

How to plan: when you proceed with tax filing you can choose to toggle between accounting ways. Your common options are “last-in”, “first-out” & “Specific share identification”.

Before using FIFO it is a better idea to select particular stocks / shares that you want to sell. This is more appropriate when you have pitched in at over-time stock selling program and have derived your biggest profit out of the initial batch. On the other hand if you have great many capital losses with which you can counterbalance your capital profits then 2012 is a good year to enjoy good number of tax benefits.

This calculation will be same when accounting for mutual funds, dividend-reinvestment plans, exchange-traded funds and 2013 bonds. If you haven’t received any mails yet from your broker’s company, then wait till you get your options to choose a particular method of calculating your tax amount. Don’t treat the paper work casually.

Retirement plans

Filing challenge: If you have plans to finance Roth IRA for 2011, then better have it done before April 17, 2012. IRA is a tax deductible scheme which will provide you a tax concession on your investment, but will calculate taxes on withdrawal of money from this traditional plan. Roth requires you/other liable people to pay upfront taxes. This is one reason why the Roth is considered good investment idea for long-term by most tax-payers.

The changes were introduced in 2010 that everyone could convert their IRA to Roth irrespective of income group. This is indeed facilitating unless you have an exorbitant tax bill. However to calculate tax-return for 2012 you have to abide by the conversions introduced in 2011.

IRS warns of ‘dirty dozen’ tax scams

To tide over your 2010 tax payments if it took you two years then you are required to clear all due amounts this filing season 2012. The time is ticking already and you have only until the filing day to undo 2011 alterations.

How to plan: open or reinvest in IRA for 2012 and also transfer an existing IRA into Roth. Such conversion will help you trim down higher tax rate during your retirement days (than what you have to pay now). For those that were planning to go ahead with conversion plans this is the right time to take the call. If the conversion is done before the Bush tax laws expire then you won’t be required to pay more than 35% on the upturn, which by the year end can go up much higher than what is anticipated.

Home selling: Not a very good idea

Filing challenge: If you are happy to have earned much after selling off your house then wait, your profit might as well come under taxable charges. For single home sellers anything above $250,000 will be taxable. For married couples the same rule applies on a marginal amount of $500,000.

Wondering what happens if you sell your house at an under-rated price? You will be considered unlucky, simply because you can’t file for tax-return on the initial amount / cost of your residence. However if you lent your house out on a mortgage and the contract period was cut short by reconstruction/ restoration purpose  then you might as well get a tax-break. Such deals are also applicable on conditions such as short-notice sale or when losing your home to foreclosure. This type of tax-breaks means liberation from paying due debts.

Should you buy a home in 2012?

How to plan: This tax-break plan closes this year 2012. So in case you want a tax break, then better not waste time.

Education tax cuts

Filing challenge: the American government though has been lenient with educational grants; however some important scholarships are schemed as tax-cut loans. Sorting these educational tax cuts is difficult. Some of the variety of schemes are the lifetime learning credit taxable over $2,000 per return, the American opportunity credit tax-free till $2,500 per undergraduate student, the tuition and fees deduction $4,000 max for a single student per family. However you can only file one application for education tax cut per year.

Get help to solve your tax doubts

According to Justine Ransome, national tax officer at Grant Thornton the American opportunity credit is the biggest money saver scheme. Taxes are sorted as per income brackets/slabs; but American Opportunity Credit provides the highest tax-cut, $180,000 for married couples and half the amount for singles.

How to plan: Bad luck the American opportunity credit expires this year but well you will have various simpler choices the following year.

Health care write-offs

Filing challenge: health care costs will be deductible at higher rates. This means that you can file for only those that surpasses 7.5% of you Adjusted Gross Income. But it seems likely that increasing medical costs can wrap the matter neat and tidy. Allison Shipley, PricewaterhouseCoopers’ principal of personal financial services opines that if a person’s income is drastically reduced and the medical expenses increases on the other hand, then the individual can produce all medical expense bills and enjoy tax-cuts.

It’s saving time:

Heres what the tax-cut expenses include: general physician and dentist’s bills , doctors prescription, medications, specs, hearing kits, wheel-chairs, patient’s transportation, consultation fees, care-giver charges and a few insurance costs.

H&R Block Manager Arrested for Identity Theft

Mar 27, 2012 Posted by Sanjiv No Comments

Last month I wrote about IRS agent stealing tax payers’ information to file bogus tax returns and this month another similar case has come to light.  In a recent incident, H&R Block manager, Damon Charles Dubose, 38, of North Hills, Southern California was arrested for stealing identity of tax payers.

According to complained filed against Dubose, he prepared bogus tax returns in the names of past customers.  Intention was to collect tax refunds and credits, according to prosecutors, and then use the popular H&R Block Emerald cards to withdraw the funds from ATM.

Did Dubose simply walked up to ATM and collected the refund?

Yes, off course.  He was seen by the local patrolling officer loitering near the ATM’s of three different banks and guess what?  He was wearing pantyhose over his face as well as a scarf and beanies.

Did he actually withdraw the funds from ATM is not clear but authorities found $2960 in Dubose car and another $6900 in Dubose girlfriend home.   In addition to cash, official found hand written information of many tax payers.

Is Dubose behind bars?

Not for now.  He was released on bond and is scheduled to appear in court on April 30th.

Tax Tips That Offer Better Results for Small Businesses

Feb 17, 2012 Posted by Sanjiv No Comments

Come the month of January/February and the nation prepares itself for tax sessions. It is time to check that all your financial records are in perfect order. The Certified Public Accountant who will start corporate accounting can call you any time and ask for your spontaneous cooperation if certain papers to prepare the actual audit results are missing. Are you ready? Still worrying if 2012 will be an expensive Tax-year? Follow the below-stated tips to prepare yourself better for the tax-return file.

 Establish your business as an entity with the state:

This is a great tactics as it allows you to enjoy tax benefits by protecting your personal assets and possessions from your business’ sponsors or financers. This you can simply do by listing your business as an entity with the state. Being an entity of the State increases your brand value and authenticates you as trustworthy and reliable entity to both the clients and the IRS. In order to enjoy this kind of tax benefit or tax break you need to undergo paperwork proceedings with the Secretary of State. This process is completely different and is in no way similar to the process of filing with the country records office for an assumed-name certificate. Any one with such a paper gets the permission to conduct business under an assumed or imaginary name. If the firm is recognised as a legal entity then it attracts some amount of costs which is normally capitalized for tax purposes and considerable amortization is done for a period of 15 years. The first tax tip states that for the current year if the total start-up expense for a firm does not exceed $50000 annually then up to $5000 can be deducted from the expenses.

 Business owners need to keep a track of their expenses

The domain of tracking expenses covers home, office, auto and client development expenses. All these expenses are integral to the development of the business and as such are considered to be an integral part of it. The costs incurred on these heads are liable to be deducted from tax but to get the benefits there are certain rules to be followed. The IRS will ask you for the mileage bills in cases of business automobile usage. It is very well known that small businesses overstate automobile expenses and so bills must be kept for the actual information. If you fail to keep a record of your transport cost then the IRS can decline a small or major part of your deduction from auto expenses. Just like auto and home-office expenses, client development costs are also subjected to some specific rules. In matters of deductible client development costs there must be clear mention of time, date and place – these includes details such as when you went to meet the client, the business contact’s name and the business you thought of generating as a direct effect of your expenditure. Unreasonable client development expenditures are not considered and only 50% of the business meal prices and other client entertainment expenses are deductible.

 Small business owners need to invest in equipment

There is a provision of total tax cut of $139000 on total business equipments expense ranging between $560000 and less. This is calculated annually. If in any case repair extends the life of equipment or the equipment is used for a different cause other than the requirement of the company, then the cost will be regarded as an improvement which is entitled to be capitalized and depreciated for the purpose of tax deduction.

 Need to collect past due accounts

If you are running a proper business you must be well aware that for some obvious reasons there may be a few clients who will refuse to pay you the due money. The work will become easier for you if you have some valid documents to prove your claim such as a receipt, contract, or a written slip which documents the fact that these people owe you money. This will place you in a position to exercise your right to collect past-dues. For speeding up the collection process write a note to your client requesting him to clear off their payment and if they express their inability or refuse to pay then you can place your claim on this amount as a “bad business debt loss” for tax purposes. But the debt has to be appropriate and on business grounds. Only then will it be granted for tax deduction by the IRS.

 The need to protect payroll taxes

Beware of using the pay roll taxes for financing any kinds of business operations or proceedings such as clearing the dues of the creditors and suppliers. This is one common mistake that small businesses commit. Pay-roll taxes are strictly inspected by the IRS and in cases of tax-default or evasion the IRS can also freeze your personal assets. Even though you have established yourself as an organized business firm the IRS will not entertain any reason while calculating payroll taxes.