February 28, 2017

Home Energy Federal Tax Credits: Most (but not all) expired on December 31, 2016

If you are planning energy efficient modifications to your home in 2017 and assumed you would get a federal tax credit for your efforts, you may be out of luck.

13 home energy federal tax credits (including those involving energy efficient insulation, roofs, windows, and doors) expired on December 31, 2016.  2 federal tax credits remain (for home solar pv and solar water heating systems) for another 5 years, although the credits begin to decrease after 2019.  It is unknown if the 13 expired credits will be renewed this year, or if the decrease in the remaining 2 credits will be amended.

And it only gets more complicated ...

Additional items of note:

  1. State and local home energy tax credits may not conform to federal tax law.  Be certain to check state and local tax codes to see what energy efficiency tax credits, if any, you are eligible for.
  2. Home energy federal tax credits apply (or applied) only to owner-occupied homes, both existing construction updates and new construction.  Rental homes are not eligible for these credits.
  3. If you lease your home solar system (rather than purchasing it), you are not eligible for any home energy federal tax credit.  (Bet your solar company didn't tell you that, did they?)
  4. But wait, there's more!  What is the definition of "home" for this credit?   Is your home, well, really a home in the eyes of our politicians that enact these laws?  Multi-family housing (more than 3 stories) is treated as a commercial building and is not eligible for the home energy federal tax credit program, but it is eligible for the commercial building tax deduction.  The relevant standards for this commercial buildings tax deduction are located in ASHRAE 90.1-2001.  (ASHRAE stands for the American Society of Heating, Refrigerating and Air-Conditioning Engineers.)  Apartment buildings are also considered commercial buildings and fall under this statute.  More more information (or perhaps a larger headache), refer to this Energystar.gov page.
Tax, Financial, or Insurance Concerns?

Mary Rae Fouts, EA  assists nationwide clients that have complex or technical concerns involving tax, financial, and insurance matters.  For more information about Mary's Tax, Consulting, and Expert Witness Services visit Fouts Financial Group.

Mary Rae Fouts

February 27, 2017

2016 Form W-2 - Still haven't received one from your employer?

If you are employed, your employer is required to give you a Form W-2 with annual wage and withholding information.  Employers are required to send Form W-2s to employees by January 31 of the next year, or the following business day if January 31 falls on a weekend or federal holiday.  2016 Form W-2s should have been sent to employees by January 31, 2017.

Wage and withholding information provided on Form W-2 is necessary for proper completion of annual individual income tax returns.  If you are expecting a 2016 Form W-2 and have not yet received it, here are a few tips from the IRS about what to do now.

Tax Concerns?

Mary Rae Fouts, EA provides tax planning, preparation, and representation services for taxpayers with complex or technical tax issues.  As an Enrolled Agent licensed by the United States Department of the Treasury, Mary is allowed to provide tax services in all 50 states and U.S. territories.  For more information about Mary's Consulting, Tax, and Expert Witness Services visit Fouts Financial Group.

Mary Rae Fouts

February 24, 2017

Coffee Flavor: Can you guess where it primarily comes from?

I do enjoy my morning coffee!  I purchase whole beans, and either I or my husband Jim (He actually makes better coffee than I do! 😋)  grind the beans with a bit of cinnamon stick, then make a pot of drip coffee.  I like old fashioned drip coffee better than any other preparation.  Served in a mug with a bit of milk (unsweetened almond milk at home, or 2% milk if on travel).

Coffee Flavor - Where it comes from may surprise you!

Did you know that coffee bean roast color determines 80 percent of a coffee's flavor?    Not the type of coffee bean, not the source location, but the roast color!  I did not, and was amazed to learn that fact.  Not to mention the characteristics of light roast coffee match my general personality!  😊  Learn more about selecting coffee here.

Credit:  thanksgivingcoffeecompany.com
Mary Rae Fouts

February 22, 2017

Unconditional Love: Adopt a shelter dog today!

Dogs at public animal shelters often suffer from public stigma.  Far too many people think all of the animals are there because they have behavior problems, and no one wants them.


Dogs end up in public animal shelters for many reasons:  strays never claimed by owners, owner surrenders, dogs seized due to abuse and neglect.  And yes, some dogs do end up at the shelter due to human aggression, dog aggression, or other animal aggression.  But, dogs will only be made available for adoption if they pass behavior tests and are deemed adoptable by shelter staff.

All of the Beloved Canine Companions ... ok, dogs! ... I've had the privilege to have as family members since moving to California have come from public animal shelters in Martinez, Pinole, and Antioch, California.  They ended up there for various reasons:  (1) found as a stray by animal control and never claimed by human owner, (2) surrendered by owner because owner had no time for the dog, and (3) seized by police for severe abuse and neglect in a backyard puppy mill.

And wonderful dogs all!  Here are our current Faithful Canine Companions, Chow-mix Lexi and Husky-mix Sid, playing on the beach during a recent trip to beautiful Carmel.  They are one very bonded pair!

And, I confess to my dog affinity for Northern Breed Mixes and Herding Breed Mixes.  They will always have the doggie place in my heart.  Guilty as charged!

There are more dog breeds and mixes than just Pit Bulls and Chihuahuas at public animal shelters.  Visit your local shelters and have a look for yourself.  Here are 2 gorgeous northern breed dogs available for adoption today at the Contra Costa Animal Services Shelter in Martinez, California:

Mr. Peanut says:  "May I please go home with you today?"

UPDATE 02/23/2017 - The dog shown below is no longer named Myrna Loy at the shelter.  She has been renamed Minerva.  If calling the shelter about an animal, always identify the animal by the animal ID number that begins with #A, as sometimes the names are not in the computer system, or are entered incorrectly in the computer system.

Also, when visiting animal shelters please note that an animal's kennel location may have changed.  Don't leave if the animal is not in the kennel you suspect; ask someone for assistance.

Myrna Loy (now named Minerva as of 02/23/2017) says:  "May I make my Forever Home with you?  I'm a nicely sized dog and promise to be good!"

So many wonderful animals waiting for their forever homes.
Forever unconditional love and companionship.

Visit your local animal shelter today.  You might just find your new Forever Friend!

Mary Rae Fouts

February 21, 2017

Hwy 17 commuters show us that adding a chainsaw to your vehicle's emergency bag is a pretty good idea after all.

Are you prepared in the event of a local or regional emergency?  Well, these Santa Cruz, California area commuters were more than prepared, and willing and able get the job done.  A huge fir tree recently fell over Hwy 17, the main route between Santa Cruz and the San Jose area.

And what happened?  Did commuters and travelers simply wait for Caltrans to show up and clear the road?

Nope.  People got out of their vehicles, equipped with chainsaws, brooms, and good old muscle power, and cleared the tree and highway themselves.

Not that is what I'd call being prepared, ready, and willing.

Read the entire story and view more photos here.  For a quick peek, take a look at Santa Cruz resident Liza Miller's comments, and one of her photos, below.  Pretty amazing, huh?

Photo credit:  Liza Miller, published on eastbaytimes.com
"SANTA CRUZ — High winds knocked down an enormous fir tree near the summit of Highway 17 at approximately 3 p.m. Monday, blocking all four lanes and prompting a massive effort to clear the roadway by stranded travelers.Liza Miller was commuting home to Santa Cruz from work when traffic came to an abrupt stop.

“I was maybe the seventh car back. It took me a while to realize what I was looking at. There was this giant tree across all lanes and people were jumping out of their cars and running up there. I thought a car was trapped, but people had just begun instinctively clearing the highway,” she said."

Be prepared.  

Have emergency exit routes planned from your home in the event of fire.

Have water, food, medicines, and emergency supplies on hand
in the event of an earthquake or other natural disaster.

Review your homeowners, business, renters, and other property insurance coverage
 to be certain you have adequate coverage.

And especially if you live in a wildfire or flood prone area,
have a to-go bag ready and be prepared to evacuate.

Stay safe, everyone! 

Mary Rae Fouts

February 20, 2017

New York Times Crossword Puzzle: Happy 75 Birthday!

I am an avid crossword puzzler.  One of the reasons I subscribe to daily delivery of the New York Times newspaper is for the daily crossword puzzle.

Wow!  An age 13 crossword dynamo has his crossword published in the New York Times!
Photo credit:  newyorktimes.com 

So imagine my surprise to read in yesterday's Sunday paper that the Times' daily crossword puzzle was celebrating its 75th birthday.  I had always assumed the puzzle was much older than that.  While the Times had published a crossword puzzle much earlier in 1913, it delayed daily publication.  Why?  The newspaper's editorial board thought the crossword puzzle was "a sinful waste of time".

How's that for an out-of-touch newspaper editorial board?

Fast forward a bit ... The New York Times was the last major metropolitan newspaper to offer a daily crossword puzzle.  Yep, the final holdout.  It finally did so in 1942 after the bombing of Pearl Harbor, to provide a comfortable distraction to war-weary people.

And so the daily New York Times crossword puzzle began.  And has flourished.  Can anyone argue that the New York Times daily crossword puzzle is not the most popular newspaper crossword puzzle?

And another fascination piece of trivia:  In the past 75 years of daily publication, there have only been four different crossword puzzle editors at the New York Times!  Maybe the crossword puzzle editors and the United States Supreme Court Justices had something in common?  (As in lifetime appointments. 😃 )

Read about the history of the New York Times crossword puzzle here and here.  And if you are not already a crossword puzzler, do give this most enjoyable, relaxing, and sometimes hair pulling challenging pastime a chance.  Sharpen a few pencils, poor a cup of coffee or tea, or glass of wine or other favorite beverage, and get to puzzlin'!

Mary Rae Fouts

February 17, 2017

Roast Turkey: Say goodbye to dry flavorless roast turkey with easy-to-make slow roast turkey

Slow Roast Turkey

Easy to Make
Fall-Off-the-Bone Tender
Delicious and Flavorful
Plenty of Leftovers ("Reruns") for Future Meals
Good All Year Round - Not Just Thanksgiving

17-pound Diestel turkey ready to go in the oven!

All done after slow roasting for about 9 1/2 hours!

Recipe?  Check out my previous blog about roast turkey for the easy, no fail recipe.  For fruits, veggies, and herbs, this roast chicken had plenty of onion, celery, orange, lime, and fresh garden herbs including sage, bay leaf, flat leaf parsley, marjoram, and rosemary.

Make a roast turkey soon and look forward to easy, comfort food meals with the leftovers:  club sandwiches on sourdough bread, hearty "stoups" using the roast turkey au jus, BBQ turkey sandwiches on buns, turkey tacos or turkey and bean enchiladas, and chef dinner salads.  Delicious and nutritious comfort food and its finest.

Plus, your kitchen area will smell absolutely divine with the wonderful buttery aroma as the turkey slowly roasts.  The above photos are from our last Christmas turkey, but we eat turkey all year round:  whole roast turkey, roast bone-in turkey breast, boneless turkey cutlets, ground turkey burgers, and freshly-sliced turkey/smoked turkey from the my grocer Lunardi's deli.

Roast turkey:  it's not just for Thanksgiving anymore.  Perfect anytime of the year.

Mary Rae Fouts

February 15, 2017

Mudslides and Landslides: Think you have insurance coverage?

In rain saturated Northern California, mudslides are occurring in hilly and mountainous areas.  Here is a recent mudslide into a hillside home in nearby Orinda, California.  The home was red tagged.  At the time of the slide, 5 neighboring homes were also in danger.

Home destroyed by mudslide in Orinda, California, February 2017.
Photo credit:  Eastbaytimes.com

Mudslides and Landslides
Does your insurance cover home and business property damage?

If you assume you have insurance coverage for mudslides and landslides, check your coverage very ... very ... carefully.  Standard homeowners and business property insurance policies do not provide insurance coverage for either mudslides and landslides, as these events are classified as earth movement, much like an earthquake.  An additional insurance policy known as a "Difference in Conditions" policy must be be purchased to provide insurance for mudslides and landslides.

Insurance, Tax, or Financial Concerns?

Mary Rae Fouts, EA assists clients who have complex or technical insurance, tax, and financial concerns, including those related to homeowner and business-related insurance.  For more information about Mary's Tax, Consulting, and Expert Witness Services visit Fouts Financial Group.

Mary Rae Fouts

February 13, 2017

Oroville Dam: Nearly 200,000 Northern California residents ordered to evacuate due to risk of emergency spillway failure and catastrophic flooding

I've always said I would never live:

(1) Next to a body of running water, or
(2)  On a hillside or mountainside.

Now I'll add number 3 to the list:

(3) Downstream from a dam.

Imagine going about your business on a Sunday afternoon, only to received a reverse 911 call ordering you to evacuate given the risk of catastrophic flooding if the earthen emergency spillway fails on the Oroville Dam, the tallest dam in the United States.  Nearly 200,000 Northern California residents received just this order to evacuate yesterday.  Yes, nearly 200,000.  Many people evacuated with only family members, pets, and little or no belongings.

Oroville Dam spillway failure
Photo Credit:  Washington Post

If the emergency spillway fails, experts predict the earthen spillway area will collapse, allowing a 30 foot wall of water to cascade from the dam.  The consequence?  Catastrophic flooding in communities downstream (south) in the highways 70 and 99 corridors,  including the communities of Marysville and Yuba City.  Experts have not released any expectation if the Sacramento area would be affected.

The Oroville Dam was built in the 1960s.  It is located in northern California near the community of Oroville, about 138 miles (by car) north of where I live in Pleasant Hill, California.  The dam serves many purposes, including production of electricity, supplying water to farmers for irrigation, and supplying drinking water to approximately 22 million California residents.  Experts are saying that the Oroville dam itself is not 'currently' at risk of failure.  Not sure that offers much comfort for affected California residents.

The earthen emergency spillway was opened on Saturday, the first time it had been activated since the dam was completed in 1968.  Yes, the first time.  Is that amazing, or what?

Weather is currently dry, but more rain is expected to begin Wednesday night, with ongoing period of rain forecasted for the next week.  Yes, the next week.  The mountains around the Oroville Dam area forecasted to receive approximately 8 inches of rain.  An amazing 20 inches of rain fell in that area during prior 10 days or so.  After a number of years of drought, this winter has been the wettest on record for California.  I can vouch that Pleasant Hill where I live is saturated.

Stay safe, everyone.  *** Update 2/15/2017 - The mandatory evacuation order was lifted yesterday afternoon, replaced by an evacuation warning order.  By media accounts, most affected people have preparations in place to evacuate again on short notice.  ***

Mary Rae Fouts

February 7, 2017

Retirement Plans: Did you take an early (before age 59 1/2) withdrawal?

If you take an early withdrawal (before age 59 1/2) from a tax qualified retirement plan, you may be subject to regular tax plus a federal income penalty tax.  Learn more at this IRS Tax Tip.

But wait, there's more!  Some states also impose a state income penalty tax for early retirement plan withdrawals.  To avoid unpleasant financial surprises, make sure you know the tax implications before making these withdrawals.

Tax, Insurance, or Financial Concerns?

Mary Rae Fouts, EA assists clients who have complex or technical tax, insurance, and financial concerns, including those related to retirement plans.  For more information about Mary's Tax, Consulting, and Expert Witness Services visit Fouts Financial Group.

Mary Rae Fouts

February 6, 2017

Carmel: Canine Paradise

In my next life, I want to come back as a dog.  
A Carmel dog, that is!

Sid and Lexi livin' the dream on the beach in beautiful Carmel, California ...

Staying at Doris Day's Cypress Inn is a must!  Carmel's most dog friendly inn, wonderful service, food, gorgeous rooms, and luxurious features for humans and canines alike.  The homemade popovers at breakfast are reason enough to stay at "Doris' House"!

And remember to always live in the present as my Faithful Canine Companions Sid and Lexi do.  Every day is truly a gift!

Mary Rae Fouts

February 3, 2017

Selling your home? Plan ahead to avoid an unpleasant capital gains surprise.

Are you thinking about selling your home and purchasing a different residence?  Plan ahead to address any possible federal capital gains tax that may be due on the sale of your home.

Some people mistakenly think a homeowner can still rollover all gain from the sale of one personal residence into the purchase of another personal residence.  Nope, the rollover rule changed way back in 1997 to the current exemption of $250,000 of gain for single taxpayers, and $500,000 of gain for married taxpayers filing a joint tax return.  Plus, it does not matter if you purchase another residence or not, the $250,00 / $500,000 federal capital gain rules apply.  You should also check state and local laws, as some states and cities also have specific tax regulations addressing real estate sales, including personal residence sales.

This may not seem like a big deal in some parts of the country, but it is a big deal in parts of the country - including California - that have seen substantial appreciation in residential real estate.

Even if you have no current plans to sell your home, keep records of improvements made to your home.  That way you will be able to accurately calculate the cost basis for your home, if you do decide to sell it in the future.

For more information about federal tax rules and residential real estate sales, refer to IRS Publication 523.

Tax, Insurance, or Financial Concerns?

Mary Rae Fouts, EA assists clients who have complex or technical tax, insurance, and financial concerns, including those related to real estate transactions.  For more information about Mary's Tax, Consulting, and Expert Witness Services visit Fouts Financial Group.

Mary Rae Fouts