2015 TAX NEWSLETTER
Happy Holidays! The 2015 Tax Season is fast approaching. As a valued customer, A 4 Able Tax Services thank you for your business and
trust. We are pleased to have you as a client and value your business.
It was announced by the Internal Revenue Services on Monday, December 21, 2015
that the Nation’s tax season will begin as scheduled on
Tuesday, January 19, 2016. The IRS will begin accepting individual electronic returns and begin processing
paper tax returns on that day.
The filing deadline to submit 2015 tax return is Monday, April 18, 2016, rather
than the traditional April 15th date. Washington, D.C., will
celebrate Emancipation Day on that Friday, which pushes the deadline to the
following Monday for most of the nation.
State Income Tax Rate
California has nine state income tax rates ranging from 1 percent to 12.3
percent. This state also assesses a 1 percent surcharge on taxable
incomes of $1 million or more.
Personal Income Tax
California collects income tax from its residents at the following rates.
For single and married filing separately taxpayers:
o 1 percent on the first $7,749 of taxable income.
o 2 percent on taxable income between $7,750 and $18,371.
o 4 percent on taxable income between $18,372 and $28,995.
o 6 percent on taxable income between $28,996 and $40,250.
o 8 percent on taxable income between $40,251 and $50,869.
o 9.3 percent on taxable income between $50,870 and $259,844.
o 10.3 percent on taxable income between $259,845 and $311,812.
o 11.3 percent on taxable income between 4311,813 and $519,697.
o 12.3 percent on taxable income of $519,688 and above.
A 1 percent surcharge, the Mental Health Services Tax, is collected on taxable
incomes of $1 million or more, making California highest marginal rate 13.3
For married persons filing joint returns and heads of households, the rates
same but the income brackets are doubled.
Beginning January 1, 2015, if you, the taxpayer keeps records consistent with
reporting amounts as tip wages to the IRS, they will presume
those amounts are optional and not subject to sales tax. On the other hand, if the taxpayer’s record show amounts to be reported as non-tip
wages to the IRS, they will consider those amounts mandatory and taxable.
For more information about tips, see the Board of Equalization’s publication 115, Tips, Gratuities, and Service Charges, on their website at
Inheritance and Estate taxes
California has no inheritance tax, and its estate tax has been phased out in
connection with federal estate tax law changes. Executors of
estate of persons who died on or after January 1, 2015, are no longer required
to file a California estate tax return.
State Refund Status
You will need the following information to check the status of your 2015
California personal income tax refund:
• Your social security number.
• Your mailing address. If your address has changed since you filed your return, please update your
• The refund amount shown on your tax return.
• A compatible browser and operating system such as Internet Explorer, Firefox,
Opera or Chrome for Windows. For the Mac a compatible
browser would be Safari, Chrome or Opera.
Internal Revenue Services
Beware of a new nationwide scam targeting taxpayers. In a new effort to take money from unsuspecting victims, fraudsters are sending
phony tax bills on what looks like official IRS letterhead. They are also sending out e-mails from false websites that contain “IRS” in the Web
address. In addition, scammers claiming to be IRS employees continue to call taxpayers,
telling them they owe taxes and must pay up fast.
Keep your guard up and don’t fall victim to any of these scams. Here are five things the scammers often do but the IRS will not do. Any one
of these five things is a tell-tale sign of a scam. The IRS will never:
1. Call to demand immediate payment, now will we call about taxes owed without
first having mailed you a bill.
2. Demand that you pay taxes without giving you the opportunity to question or
appeal the amount they say you owe.
3. Require you to use a specific payment method for your taxes, such as a
prepaid debit card.
4. Ask for credit or debit card numbers over the phone.
5. Threaten to bring in local police or other law-enforcement groups to have you
arrested for not paying.
If you get phone call from someone claiming to be from the IRS and asking for
money, here’s what you should do:
• If you know you owe taxes or think you might owe, call the IRS at
1.800.829.1040. The IRS workers can help you with a payment issue.
• If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the
Treasury Inspector General for Tax
Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
• You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “imposter Scams.” If the complaint involves someone
impersonating the IRS, include the words “IRS Telephone Scam” in the notes. The FTC Complaint Assistant is located at www.ftc.gov.
Additional information about tax scams are available on IRS social media sites,
including YouTube and Tumblr where clients can search
“Scam” to find all the scam-related posts.
Required Minimum Distribution
Taxpayers born before July 1, 1945 and a retiree, must take the required minimum
distribution (RMD) from their individual retirement and
workplace retirement plan by December 31,2015. For those who reached 70 ½ during 2015, a special rule allows the first year required
minimum distribution recipient to wait until as late as April 1, 2016 to receive
to receive their first RMD.
The required minimum distribution applies to participants in various workplace
retirement plans including 401(k), and 403(b) and 457(b)
plans. The required distribution rule also applies traditional IRA, Simplified Employee
Pension(SEP) and Savings Incentive Match Plans for
A tax credit reduces the amount income tax you may have to pay. For example, an education credit helps with the cost of higher education
by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two
types of credits. A non- refundable tax credit means you get a refund only up to the amount you
owe for taxes. A refundable tax credit means
you get a refund, even if it is more than what you owe.
If you’re making a gift by check ensure that the done deposits it by Dec.31.That way,
the money will count as a 2015 gift for federal gift tax
purposes. If you give a certified check by year-end, it will count as a 2015
gift. Take advantage of the full $14,000 per done gift tax exclusion
this year. If you’re giving securities, endorse them over to the done and deliver them by
year-end, if you want the gift to count for 2015.
Health Flexible Spending Account
Be sure to check your health flexible spending account. You must clean it out by December 31st, if your employer hasn’t implemented either
the 2 ½ -month grace period or the $500.00-dollar carryover rule. Otherwise, you will forfeit any money left in your account.
Keep track of the cost of moving to a new job. If the new job is at least 50 miles farther from your old home than your old
job was, you can
deduct the cost of the move even if you don’t itemize expenses. If it’s your first job, the mileage test is met if the new job is at least 50 miles
away from your old home. You can deduct the cost of moving yourself and your belongings. If you drive your own car, you can deduct 23
cents per mile for a 2015 move, plus parking and tolls.
Tax- free withdrawals from 529 plans used for paying eligible college expenses
cannot be used as a qualifying education expense in figuring
your American Opportunity Credit. You can’t use the same college expense for both benefits. For example, if you take $8,000 from a 529
plan for college tuition, you can’t also use that $8,000 as a qualifying education expense in figuring your
American Opportunity /credit.