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New Online Conveniences for Clients

We have several exciting announcements to share with you! 

We have an updated website to better serve you.   Of particular note is our Client Corner (top right corner of website), allowing you a single place to login to our various tools, including Portal, Share Files, and Intacct.  We are also now offering online credit card payments through our Client Corner. 

As you are likely aware, in response to client demand we will now be delivering tax returns electronically through our secure client portal.  We are pleased to offer you this option to access your information anytime through the Client Corner (Portal/Payroll Login section) of our new website.  We hope you will appreciate the convenience of this new portal service, which will allow us to better secure your documents (avoiding mailing challenges) and continue our efforts to "go green."  In order to utilize the portal, you must be registered; feel free to contact our office for assistance.   For instructions on how to utilize the Portal, please visit the Client Corner, Instructions section. 

We are also able to accept your documents electronically through our Client Portal or our Share Files program (both located in the Client Corner of the website). 

We are excited about these new tools that will allow us to serve you better.  Please contact us ( with any questions.

Tax Implications of the President's 2015 Budget Proposal

On March 4th, 2014, President Obama released his proposed budget for the 2015 fiscal year. The proposal included numerous tax benefits for both individuals and businesses. However, there are other provisions of the proposal that reduce or eliminate other benefits or alter previously “permanent” tax credits, deductions, or deferrals.

Some highlights include:

  • Sec. 179 Depreciation Expense “permanently” increased from $25,000 to $500,000 annually, possibly retroactive back to 1/1/14
  • Increase of the Estate Tax rate from 40% to 45%, while decreasing the exclusion amount from $5 million to $3.5 million for estate taxes, and down to $1 million for gift taxes
  • Requiring minimum distributions from some Roth IRAs
  • Placing a cap on the amount of deferred capital gain from like-kind exchanges of real property to $1 million per taxpayer per year
  • Expanding the eligibility for the Small Employer Health Insurance Credit by defining a qualified employer as a group with 50 full time equivalents rather than 25
  • Subjecting owners that materially participate in a professional service business (health, law, engineering, performing arts, accounting, architectural, actuarial services, brokerage and consulting) to self-employment taxes regardless of the form of ownership (i.e. S Corporations, Limited Partners and LLC Members)
  • Tax carried (profits) interests as ordinary income, rather than capital gain, and subject the income to self-employment taxes
  • Repeal LIFO method of accounting for inventories

Commerce Clearing House (CCH) has produced a more in-depth overview of the President’s proposal that is available online at

Should you have any questions regarding how these proposed changes could affect you or your business, please contact us at (209) 527-4220 or

Same-Sex Couples: IRS Provides Additional Guidance on Tax Implications

On June 26th, 2013, the Supreme Court found the Defense of Marriage Act (DOMA), the law barring the federal government from recognizing same-sex marriages legalized by the states, unconstitutional. As a result of this ruling, the Internal Revenue Service has announced full recognition of same-sex marriages for federal tax purposes even if the state in which they are domiciled does not recognize the validity of same-sex marriages. The terms “spouse”, “husband and wife”, “husband”, and “wife” will now include an individual married to a person of the same sex.  These conclusions do not apply to registered domestic partners, civil unions, or other similar formal relationships.

Here are just a few of the major implications of this ruling:

  • Income Tax: Married same-sex couples will now be required to file a joint return or as married individuals filing separately. Couples involved in legal separations or living apart for more than six months will not be treated as married. Filing as married may result in increased income tax liability due to the “marriage penalty” phenomenon, thus making this ruling advantageous for some couples and detrimental for others.
  • Estate, Gift, and Generation-Skipping Transfer Tax Considerations: An individual is eligible for an unlimited marital deduction for gifts made to a United States citizen spouse or for property passing to a United States citizen surviving spouse upon the individual’s death. Under the “portability” provisions of the estate tax, the unused estate tax exemption of the first spouse to die may be used upon the death of the surviving spouse. A number of other transfer tax provisions are premised upon the treatment of an individual as the spouse of another individual. This is due to the marital status of an individual being a significant factor in estate and transfer tax planning.
  • Qualified Plans and Fringe Benefits: Some employers have extended health insurance and other fringe benefit coverage for same-sex domestic partners of their employees, whether their relationship is described as a legal marriage or civil union or the other individual is simply identified as a domestic partner by the employee. However, under section 3 of DOMA, such employers could not treat the benefits as being provided to a spouse and have generally been required to treat the value of these benefits as taxable compensation to the employee. Such taxable income was likely reported on Form W-2 subject to federal income tax and employment tax withholding and reporting. These benefits provided to legally-married same-sex couples are not taxable to employees in light of the Windsor decision, and the guidance from the IRS advises individuals and employers as to the process for seeking refunds of income taxes and employment taxes. Many employers will be required to amend their qualified plans in order to maintain their qualified status and may be required to make corrections to their plan operations. No such changes will be required until further guidance is provided.
  • Effective Dates and Amended Returns: The IRS’ new guidelines will be published on September 16, 2013, and will become effective on that date. However, the IRS will allow taxpayers to claim federal benefits retroactively in cases where it would prove advantageous to the taxpayer.

For any original income tax return filed on or after September 16, whether for 2012 or an earlier taxable year, an individual’s marital status must be determined consistent with the guidance. In other words, if the individual is legally married under applicable state or foreign law as of the end of the taxable year for which the return is filed, the individual must file a joint return or as a married individual filing separately. For Individual returns filed before September 16th, a same-sex couple may file as two single individuals or as married individuals.

In a situation where an original return has already been filed, an amended return may be filed at the taxpayer’s discretion in order to file as a married individual filing separately or a married couple filing a joint return, however, potentially significant limitations may apply.

The IRS has published online the full text of the revenue ruling, as well as answers to frequently asked questions of legally married same-sex couples and registered domestic partners and individuals in civil unions. Due to the many complex tax implications brought about by the Supreme Court’s DOMA ruling, we highly recommend individuals and employers seek the tax planning advice of a seasoned tax professional.  Please let us know if we can assist you or answer any questions. Contact us at (209) 527-4220 or

New Fiscal Cliff Legislation Will Affect Many Taxpayers in Coming Years

As you may have already heard, the foreboding “Fiscal Cliff” was narrowly avoided recently with the passing of legislation on January 1, 2013. The legislation, titled the American Taxpayer Relief Act, allows Bush-era tax rates to sunset for individuals in the top tax brackets; permanently patches the alternative minimum tax (AMT); revives expired or expiring tax extenders; provides for a maximum estate tax of 40 percent with a $5 million exclusion; and delays sequestration. Below, we outline some of the most iinfluential changes brought about by this federal legislation. Details can be found online on the CCH website.

For Individuals

Individual Income Tax Rates

The lowered Bush Era income tax rates will be carried forward for all individuals, with the exception of taxpayers with taxable income above $400,000 ($450,000 for married taxpayers or $425,000 for heads of households), who will be taxed at a 39.6 percent rate.

Dividends and Capital Gains

Taxpayers in the 39.6 percent tax bracket will be subject to a higher dividends and capital gains tax rate of 20 percent, up from 15 percent. All other taxpayers will continue to pay a maximum rate of 15 percent. A zero percent rate will apply to all capital gains and dividends for taxpayers below  the 15 percent income tax bracket.   

Marriage Penalty Relief

The Economic Growth and Tax Relief Reconciliation Act’s (EGTRRA) increased basic standard deductions for married couples filing jointly, will be extended.

Permanent Alternative Minimum Tax (AMT) Relief

A permanent AMT patch, adjusted for inflation, will be retroactive to 2012.  Without this relief, taxpayers would have been limited to the previous exclusion amount of $33,750 for single taxpayers and $45,000 for married taxpayers.  The act increases this amount to $50,600 for single taxpayers and $78,750 for married taxpayers.

Pease Limitation

The “Pease” limitation on itemized deductions will be revived. The Pease limitation trims the deductibility of most itemized deductions by the lesser of three percent of adjusted gross income above a specified threshold or 80 percent of a person’s itemized deductions. The limit would apply to individual taxpayers with income of more than $250,000 and couples with income of $300,000 or more. Although most itemized deductions are affected, the provision exempts deductions for medical expenses, investment interest, and casualty losses.

Personal Exemption Phase-Out

The personal exemption phase-out will be reinstated, but with slightly higher AGI starting thresholds (adjusted for inflation): $300,000 for married filing jointly, $275,000 for head of household, and $250,000 for single.

Federal Estate, Gift, and Generation-Skipping Transfer (GST) Taxes

Federal estate tax rates will be permanently set at 40 percent with an annually (inflation) adjusted $5 million exclusion for estates of descendents dying after December 31, 2012.  “Portability” between spouses will be extended permanently. Deductions for state estate taxes will be extended. A number of other provisions affecting conservation easements, qualified family-owned business easements, the installment payment of estate tax for closely-held businesses, and repeal of the 5 percent surtax on estates larger than $10 million have also been extended. A 40 percent tax rate and unified estate and gift tax exemption of $5 million (inflation adjusted) for gifts made after 2012 has been provided for.  A number of GST tax-related provisions are also extended.

State and Local Sales Tax Deductions

The election to claim an itemized deduction for state and local general sales taxes in lieu of state and local income taxes has been extended through 2013.

Child Tax Credit

The $1,000 child tax credit will be extended permanently.

Earned Income Credit

Enhancements to the earned income credit (EIC) will be extended through 2017. These enhancements include a simplified definition of earned income, reform of the relationship test and modification of the tie breaking rule.

Adoption Credit

Bush-era enhancements to the adoption credit and the income exclusion for employer-paid or reimbursed adoption expenses up to $10,000 will be extended permanently.

Child and Dependent Care Credit

The current 35 percent credit rate and $3,000 cap on expenses for one qualifying individual and the $6,000 cap on expenses for two of more qualifying individuals will be extended permanently.

Employer-Provided Child Care Credit

Credit for employer-provided child care facilities and services will permanently be extended.

American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC), an enhanced version of the HOPE education credit, will be extended through 2017.

Education Incentives

A number of enhancements to tax incentives designed to promote education have been extended, including:

  • Deduction for qualified tuition and related expenses (extended through 12/31/2013)
  • Suspension of the 60-month rule for the $2,500 above-the-line student loan interest deduction (permanently extended)
  • Enhancements to the Coverdell Education savings accounts (permanently extended)
  • Exclusion from income and employment taxes of employer-provided education expenses up to $5,250 (permanently extended)

Other Individual Tax Extenders

A variety of other individual tax extenders have been extended either through 2013 or permanently. Read the CCH Legislation Update, page 8, for details.


For Businesses

Code Sec. 179 Small Business Expensing

The enhanced Code Sec. 179 small business expensing will be extended through 2013. The dollar limit for 2012 and 2013 is $500,000 with a $2 million investment limit. The rule allowing off-the-shelf computer software is also extended.

Bonus Depreciation

50 percent bonus depreciation will be extended through 2013. Some transportation and longer period production property is eligible for 50 percent bonus depreciation through 2014.

Research Tax Credit

The Code Sec. 41 research tax credit will be extended through 2013.

Work Opportunity Tax Credit (WOTC)

The WOTC, which rewards employers that hire individuals from targeted groups with a tax credit, will be extended through 2013.

Qualified Leasehold/Retail Improvements, Restaurant Property

The 15-year recovery period for qualified leasehold improvements, qualified retail improvements, and qualified restaurant property will be extended through 2013.

Other Business Tax Extenders

A variety of other business tax extenders have been extended through 2013. Read the CCH Legislation Update, page 10, for details.


Energy Incentives

For Individuals

The Code Sec. 25C credit, available to individuals who make energy efficiency improvements to their existing residence, has been extended at the $500 credit limit level through December 31, 2013.

Renewable Resources

The Sec. 45 production tax credit for facilities that produce energy from wind facilities has been extended through 2013.

Other Energy Tax Incentives

A variety of other energy incentives have been extended through 2013. Read the CCH Legislation Update, page 10, for details.


To find out more about how the American Taxpayer Relief Act could affect your financial future, please contact our office at (209) 572-4220 or We will be happy to assist you.



Changes to Estate, Gift, and Trust Tax Rules for 2010 to 2012

If you think about it, every major life event has an associated tax implication. The birth of a child leads to an additional exemption on your personal tax return, marriage results in a changed tax filing and withholding status, and death leads to an entirely new set of tax consequences. While the decedent might be well beyond the reach of the IRS and state taxing authorities at his death, his heirs are not. The value of any estate that is left to them must be reduced by estate taxes payable.

The 2010 Tax Relief Act has made significant changes to estate and gift taxes through 2012 and offers many new planning opportunities. Here is an overview of the changes.

Estate Tax in 2010

The Tax Relief Act of 2010 has a special provision for 2010 decedents. Executors managing estates of decedents who died in 2010 will have to choose how the estate should be treated for tax purposes:

  1. The estate is subject to estate tax on the estate value above $5 million (per individual or $10 million per couple), and it receives an increased basis in the assets that pass to the heirs.


  1. The executor can elect to pay no estate tax on the value of the estate and provide a modified carryover basis to the heirs.

The tax treatment the executor chooses will depend on, among other factors, the total value of the estate, the amount of appreciation built into the assets (excess of market value over purchase price paid by the decedent), and the intended disposition of any inherited assets by the heirs.

Gift Tax in 2010

Gifts made in 2010 are subject to a $1 million exclusion, and a maximum tax rate of 35%.

Gift Tax for 2011 and 2012

For gifts made in 2011, the estate and gift taxes share a combined $5 million (per individual, $10 million per couple) lifetime exclusion and a maximum tax rate of 35%. Any gifts made during a decedent’s lifetime will reduce the amount available to be excluded from the taxable estate.

Estate Tax in 2011 and 2012

Estates of decedents dying after December 31, 2010 will be taxed at a maximum 35% rate on the value of estate assets in excess of a $5 million exclusion (reduced by any gifts made prior to the date of death.)

Generation Skipping Transfer (GST) Tax in 2011 and 2012

Trusts funded or created in 2011 may take advantage of a GST exemption that is equal to the $5 million exclusion amount provided for estate tax purposes.

New Provision for Portability

Under the 2010 Tax Relief Act, any unused exemption that remains after the death of one spouse is available for use as an addition to the exclusions available to the surviving spouse’s estate. Special rules apply to decedents with multiple spouses.

Please contact Colleen Meenk at if you need additional details or have questions about the changes as they apply to your specific situation.

Click here to read the whole letter.

Featured Article

Conference Recaps
AICPA National Construction Industry Conference  On December 3rd, Adriane Reams, CPA and Javier Padilla, CPA attended the AICPA National Construction Industry Conference in Las Vegas. They gathered the following four tips to help our construction clients.  First, utilize a dashboard to calculate key metrics, as key ratios should be considered both before and after tax planning.  Second, project managers should be continuously updating projected costs on jobs to keep financial information accurate. Third, establish a technology plan for project management and bookkeeping. Final tip, hold regular job status meetings to keep project managers accountable! Keep an eye out for the Grimbleby Coleman dashboard, which is being developed to our clients track key metrics.  California Almond Board Conference  Principals Jeff Coleman, CPA, Jeff Bowman, CPA and Tax Manager Chad Van Houten attended the California Almond Board Conference in Sacramento December 9-11th.  The team learned that conference attendance was up to 2,900 total attendees, an increase of 400 people from 2013, which is a clear indicator that the industry is growing. The drought was a major topic at the conference, both in presentation and casual conversation. Almonds now surpass peanuts as a consumer snack pick, another clear indication of the growing demand and popularity for almonds. "Gaining a better understanding of what our clients are dealing with helps us better serve them," Van Houten expressed.  

Featured News

Grimbleby Coleman Associate Earns Toastmasters Leadership Position, Travels to Malaysia for Group

Debby Baker, an Experienced Senior Associate at Grimbleby Coleman CPAs, recently traveled as part of the official delegation to the International Toastmasters Convention in Kuala Lumpur, Malaysia. 

Baker, who has worked for Grimbleby Coleman for the past 10 years, joined Toastmasters seven years ago on the advice of a friend. Toastmasters members meet and work to improve both their speaking and leadership skills in 14,650 clubs throughout 126 countries. 

Baker says before she joined Toastmasters, her lack of confidence during presentations had begun to take a toll on her personally and professionally. The group was key to improving her outlook, and she has thrived in the organization: In June, Baker was elected Lieutenant Governor of Education and Training for District 33. 

District 33 is responsible for the Central Valley, Southern California and Southern Nevada, home to 205 Toastmaster clubs with more than 3,000 members. The top three officers from every district are invited to the International Toastmasters Convention, which earlier this year took place in Kuala Lumpur, Malaysia. Baker journeyed to Malaysia on behalf of District 33, something Baker never predicted or imagined herself doing for a public speaking club. 

“I have grown exponentially as a Toastmaster,” Baker said. “Not only have I become confident while giving a speech to hundreds of people, but I am also practicing what I am learning within the organization, at work, and many areas of my life. Toastmasters has made the difference for me.”

Learn more about Toastmasters International District 33 on their website: 

Featured Staff

Manoj joined Grimbleby Coleman as an Associate after four years in banking and 2 years in the transportation industry. In this role, he assists with tax planning engagements and business returns and greatly enjoys seeing his client relationships morph from professional to friendship. Manoj holds a Bachelor of Science in Business Administration with a concentration in accounting from California State University, Stanislaus. 

A long time Livingston, California resident, Manoj stays very active in his community. He's been involved with Livingston Rotary, was a Livingston Planning Commissioner, and a Livingston Medical Group board member. He also volunteers at the Livingston Guru Sikh Mission. "And I would like to get involved with other organizations in the future." 

In his free time, you might find Manoj traveling, enjoying time with his daughter, or relaxing with friends and family. 

His favorite number is 21. "My dad, brother and I were all born on the 21st." How's that for a coincidence? 

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