Tax Reform 2017 – Individuals

I have very mixed feelings about the proposed tax law changes. Some of my clients will benefit; others will be left in the dust.

Because we live in a high income tax state, there is less to love about this bill than if we did not. The bill only allows for the deduction of $10,000 of state and local property tax, no deduction for state income tax. California has the country’s highest marginal income tax rate — 13.3%. Ouch! That’s a big deduction to lose.

The bill has some good news for those who take the standard deduction or who — because their itemized deductions are only slightly higher than the current standard deduction — just barely benefit from itemizing. The standard deduction will double.  Unfortunately, personal exemptions are being eliminated. So, a family of three would find the additional standard deduction ($12,000) wiped out by the elimination of personal exemptions ($12,150). Okay, so it’s not such good news, after all…

But there really are glad tidings for those who benefit from the child tax credit; the credit is increased from $1000 to $1600. Further, there is a small credit — $300 — proposed for those who have non-child dependents (dependents who don’t qualify for the child tax credit).

Taxpayers with mortgages in excess of $500,000 (uh, like most of California, where the median home value is just over this amount; median home value here in Ventura County is $565,000) will be hurt. Currently, interest is deductible on mortgage acquisition debt up to $1,000,000; this bill cuts that limit in half. This will not only hurt California home buyers, but it will handicap our construction, mortgage and other related industries, as well.

With the exception of charitable contributions, many other deductions will be saying bye-bye, as well. Student loan interest and moving expense will no longer be deductible. A big loss for many will be the non-deductibility of alimony (this basically means alimony will be taxed twice — by the payer as well as the recipient).

Medical expense will no longer be deductible. For many of us, this is not a big loss. Normally, it’s difficult to get over the current 10% of AGI (adjusted gross income) that we have to absorb, so we don’t see a lot of deductible medical expense. However, for seniors in care facilities, this is a huge expense; in fact, it’s what keeps many of them from incurring a tax liability. This will hurt them most.

One positive for many middle income taxpayers will be the repeal of the dreaded Alternative Minimum Tax. The AMT began as a ‘punishment’ for those who took advantage of ‘too many’ deductions. It was never indexed for inflation, so, as incomes grew, the AMT exclusion did not. Now, many middle income families are snared in its trap. Personally, I’d be happy to see it disappear.

Overall, passage of this bill as it is currently written will be painful for many middle income Californians, particularly wage earners. It will be interesting to see how much of this becomes law.



Come help us as celebrate new beginnings!
Date: January 18, 2017
Time: 5:30PM to 7:30PM
Place: 1445 E Los Angeles Ave – Ste 203

Light refreshments will be served.

Please bring a toy or treat for our friends at the Simi Valley Animal Shelter.

Hope to see you there!


‘IRS’ Phone Scammers — BUSTED!!

Indian police said three nondescript office buildings on the edge of this booming Mumbai suburb were packed with hundreds of people posing as Internal Revenue Service officials in a scam that has vexed Americans for years.

Authorities arrested 70 people Wednesday alleging they helped manage nine call-centers where around 700 people made thousands of calls a day to try to trick Americans into sending them
Police raided the buildings Tuesday night, authorities said. Witnesses near one of the buildings said employees who were assumed to be doing the standard kind of call center work such as helping people manage their bank accounts or buy insurance emerged in police custody covering their faces to hide their identities.
Police said the call center workers had one job: dial people in the U.S., accuse them of failing to pay their taxes and threaten them with jail time if they didn’t pay up immediately. Police didn’t give an estimate on how much money the operation netted, but the ability to employ hundreds of English-speaking people suggests it had significant revenue.

“You can call it a scam center,” said Parag Manere, a deputy commissioner of police in Thane, just east of Mumbai.

Police said those suspected of playing leading roles in the alleged fraud were being held on suspicion of cheating by impersonation and extortion. The role of hundreds of others present was still being investigated, police said. The people arrested were in custody on Wednesday evening and couldn’t be reached for comment. It was unclear if they were represented by lawyers.
U.S. authorities have struggled to combat an epidemic of swindlers targeting taxpayers. The Treasury Inspector General for Tax Administration, an IRS watchdog, said it has received more than 1.7 million complaints in the last three years from people reporting phone calls from swindlers impersonating IRS agents. More than 8,800 victims have paid more than $47 million as a result of these scams, it added. Representatives of the IRS and the TIGTA watchdog declined to comment on the raid.

Last year a man named Sahil Patel was sentenced to 14 years in prison in New York for running the U.S. side of a huge IRS fraud that used call centers in India. That scam squeezed about $1.2 million from hundreds of victims in the U.S. by impersonating law-enforcement officials of the Federal Bureau of Investigation and the IRS, and claiming people owed money for bogus financial crimes. The scammers made thousands of calls and used technology to hide where they were calling from and where victims’ payments were being sent.

At a news conference Wednesday, Thane police shared a recording of a call they said was taken off the call center’s computers. A caller with a heavy Indian accent told a man he owed more than $11,780 and was facing arrest within hours, a five-year prison term and $100,000 fine if he didn’t settle. The call was handed to a “senior treasury officer,” who told the man he can pay whatever he can afford right away by going to the nearest Walgreens to buy Apple iTunes gift cards worth $1,000.

“Keep yourself on speaker and get dressed,” the man was told at one point. “We are running short of time within two hours you will be taken into custody.”

In the end, the man wasn’t victimized and revealed he was just stringing the caller along to waste his time.

Mr. Manere, the deputy police commissioner, said the centers raided had been set up expressly for fraud. In some cases, they would ask people to buy gift cards for iTunes or other retailers as a way of transferring funds. In others, money was deposited in bank accounts, police said.
Param Bir Singh, Thane’s commissioner of police, said there could be more call centers engaged in similar activities in the suburb. “It could be bigger than this,” he said.
India has long been a home for call center businesses, which are part of an outsourcing industry that employs millions and is rarely connected to wrong doing.

Excerpted from Shefali Anand – Wall Street Journal 10/05/16 (Laura Saunders in New York and Newley Purnell in New Delhi contributed to the article).

NOTE from Paula — IRS will never contact you by phone, except in response to a call from you. They’ll never contact you via e-mail at all. Should you have any questions regarding a communication from IRS (or someone pretending to be from IRS), please give us a call. Let us make your life less taxing.

NumberCrunchers Business & Financial Services 805-527-8758.

You Know You’ve Always Wanted To

A taxpayer has been charged with mailing a threatening communication after he responded to a notice from the Internal Revenue Service about overdue taxes by scribbling a profanity on the letter and mailing it back to the IRS.

Enrique Santiago of the Bronx, N.Y., allegedly wrote, “I do not live at this address anymore, so go f–k yourself,” on the IRS notice and told the post office to return it to the sender. The IRS had intended the notice for his nephew, named Enrique A. Santiago, but he had moved out of the elder Santiago’s home a month earlier after a “physical altercation” with his uncle, according to the New York Post. Santiago shares a similar name with his nephew, who owes the IRS $3,032.57 in unpaid taxes.

In addition to the curse-filled missive, the elder Santiago also allegedly put white powder in the envelope, causing an IRS office in Long Island to be locked down until authorities determined it was only soap. He was charged with providing false information and mailing a threatening communication.

Michael Cohn


YEAcal — Getting a Head Start in Business

Simi Valley has some incredible kids. Annika Paseta is one of them. It’s my pleasure to serve as a sponsor and advisor to the Young Entrepreneur Association of California — YEAcal, for short. Later this spring, they’ll be my captive audience as I drum into them the importance of their numbers. I look forward to watching them grow (and becoming the entrepreneurial leaders that’ll support my retirement). 😉 If you have a teen interested in becoming her/his own boss, let us know!

Following is a recent Ventura County Star article about the organization.

Simi Valley Teen Wants Entrepreneurs To Get An Early Start in Business

Visit their website at: YEAcal – Young Entrepreneur Association of California


Scam Alert! Beware!

Look what greeted me this morning from “Internal Revenue Service!” You might get one as well. Should you receive one, DON’T OPEN IT. It’s either a virus or a scam.

Remember, IRS will not contact you via e-mail. They will certainly not contact you to “verify” your confidential information. When you get these, just delete them!

And, while we’re here, IRS will also not call you. For the past couple of years, taxpayers have been victims of fraudulent collection calls purporting to be from IRS. The caller is usually very aggressive, often attempting to intimidate you by claiming a pending federal lawsuit or arrest; they will threaten to come to your home or work. They let you know they mean business. The calls are usually from foreign countries, but the phone numbers mimic the IRS’. If you proceed with the call, they’ll usually request payment via cash card (that’s a major tip-off this is fraudulent). They’re also very persistent; they’ll call several times or leaving a number of messages.
The Internal Revenue Service will generally only contact you via snail mail. If you have a refund due, all the information they need is on your tax return. If you owe them and have not paid, they will send you several notices (including a couple that will be sent via certified mail).

These scams continue because they’re so profitable. Don’t be one of their victims. Should you have questions about ANY communication you receive from a tax agency, call us before you act.


It’s That Time Again!

It hasn’t been that long…or has it?

Dee is waaaaay ahead of me; some of you already have your organizers! The rest are on the way. Be sure to take a look and make sure the date works for you (yes, guys, you have to open the envelope). If it’s not convenient, please let us know as soon as possible. My calendar fills up very quickly; we want to be sure and find you a good spot. Just give Dee a call at 805-527-8758 to make any changes.

Please remember that we don’t schedule any appointments after March 31. Be sure we have all your data — including any missing information — by that date. That ensures you’ll file before April 15th without an extension. If we don’t have everything by that date, we’ll automatically file an extension for you so you won’t be penalized.

Thank you all so very much for your referrals; our clients are our biggest source of new business. Of course, we’ll continue to give you our “Thank You” discount for your first referral, but we have something new this year! For each of your second and subsequent referrals, you’ll be entered into a little drawing to win a $250 Best Buy gift card. So, please continue sending us your family and friends. We’d love to have them — and we’d love to see you $250 richer!

Finally, don’t forget we have a new address: 1445 E Los Angeles Ave (the US Bank Building), Suite 203 in Simi Valley.

Thanks, take care — and see you soon!



InTheBlack™ Success Clinic: DIY Tax Programs — One Size Fits All?

Like it or not tax season is here and many individuals will choose the “do-it-yourself” option versus seeking the help of a professional tax preparer. NumberCrunchers Business & Financial Services warns that “do-it-yourself” is not right for everyone. On Saturday, February 20 from 10:00 a.m. to 12:00 p.m. the firm will present its first 2016 InTheBlack™ Success Clinic, “DIY Tax Programs — One-Size Fits All?” The seminar will provide tips on how to determine if DIY is the best choice versus seeking out a professional, the pros and cons of various providers and tricks/traps to look out for when preparing your own returns.

“Everyone’s tax situation is unique; many of the “do-it-yourself” tax programs are very basic and might not cover every eligible deduction. You’d be amazed at the tax savings a professional can uncover just in conversation. The law changes every year and in some cases tax programs may not be current and may not be sophisticated enough to address your unique situation. It’s important to do a little homework,” said Paula Williams, Enrolled Agent and principal with NumberCrunchers.

DIY Tax Programs — One-Size Fits All? will cover:
• the best software tax programs (what’s current);
• how to research new tax laws;
• how to research eligible deductions;
• how to ask for help (tax program help line)
• the pros of DIY tax returns; and
• the cons of DIY tax returns

The seminar will be held at the US Bank Building at 1445 East Los Angeles Avenue in Simi Valley, Suite 301 Room W. Admission for the seminar is $20 per person; receive a $5 discount with the donation of doggie toys and/or treats for Ventura County Animal Services. To register for the seminar call Dee Boyd at 805-527-8758; attendees may also register the day of the event, however seating is very limited. Registration will begin at 9:30 a.m. Each attendee will receive handout materials and have the opportunity to win some great door prizes.


We Have a New Home!

After 17 years in our Erringer office, we’ve moved! As much as we hated giving up our tongue-in-cheek, but priceless, 1776 address, we love the new space.

On October 19, we had a small (well, actually, it was standing room only) gathering of clients and friends over to celebrate. There was fabulous food by Mayz Kitchen, great door prizes celebrating our 25th year in business and boxes of donations for the Ventura County Animal Shelter. Mayor Bob Huber did our ribbon cutting and a representative from the office of my new neighbor, Congressman Steve Knight, were here as well. If you were able to make it, thanks! If you missed it, no worries. You’ll see it soon enough. 🙂 I think you’ll especially love your view of the mountains as I crunch your numbers.

Thanks again for your business, your referrals and, most of all, your friendship!

Ribbon Cutting

Huber & Knight


Extra! Extra! Read All About It!!

Tune in here for more news of current goings on at NumberCrunchers, staff news, press releases and just about anything else you want to know about us, our upcoming events, community activities, etc.

By the way, if you have big news you’d like to share – just send it to us! Who knows; you might be our big news!