Tax Time

At the beginning of 2013, many tax rates and breaks were made permanent. The increased certainty brought by these tax law changes has in some ways made tax planning in 2014 a little easier. But the changes also brought tax hikes to many higher-income taxpayers. In addition, some new and expanded taxes under the Affordable Care Act (ACA) now affect higher-income taxpayers. The ACA also has a tax impact on many businesses, and last year’s tax law changes only temporarily extended (generally through 2013) many valuable tax breaks for businesses.

It’s also important to remember that, even though many tax law provisions are now “permanent,” this simply means that they don’t have expiration dates. With tax reform still on its agenda, Congress may make some major changes in the future. So in your 2014/2015 planning, don’t count on the tax regime remaining the same indefinitely.

What does this all mean? Tax planning in 2014/2015 is as essential as ever. Meet your tax challenges head on, the worst thing you can do is to be in denial about your tax situation. So I have highlighted some tax topics for the current year. But there isn’t space to touch on all of the available tax-savings opportunities. So please contact your tax advisor to learn exactly which strategies can benefit you the most.

When it comes to tax planning and your investments, it can be difficult to know where to start. First, tax treatment of investments varies based on a number of factors. You need to understand the potential tax consequences of buying, holding and selling a particular investment. Higher-income taxpayers also need to know when higher capital gains tax rates and the ACA’s net investment income tax (NIIT) kick in. Yet, it’s unwise to make investment decisions based solely on tax consequences — you should consider your risk tolerance and desired return as well. Finally, your portfolio and your resulting tax picture can change quickly because of market volatility. Vigilance is necessary to achieve both your tax and investment goals.

2014/2015 may be another good year for families to save taxes. Most of the child- and education-related tax breaks on the table the last several years are available once again to parents — or in some cases to grandparents or to students themselves. Make sure that you and your family are taking advantage of the credits, deductions and other tax-saving opportunities that apply to you. Savvy, strategic tax-related decision-making can become a family tradition, if it’s not already.

Important 2015 Tax Dates:

January 15, 2015		4th Quarter 2014 Estimated Tax  Payment Due
April 15, 2015		Individual Tax Returns Due for Tax  Year 2014
		Individual Tax Return Extension Form  Due for Tax Year 2014
		1st Quarter 2015 Estimated Tax  Payment Due
		Last Day to make a 2014 IRA  Contribution
June 15, 2015		2nd Quarter 2015 Estimated Tax  Payment Due
Sept. 15,  2015		3rd Quarter 2015 Estimated Tax  Payment Due
October 15, 2015		Extended Individual Tax  Returns Due
		Last Chance to Recharacterize  2014 Roth IRA Conversion
January 15, 2016		4th Quarter 2015 Estimated Tax  Payment Due

COLLEGE CHRONICLES - : In its fourth year of ranking online degree programs, U.S. News & World Report had a lot more material to judge: The number of distance education programs that colleges reported to the magazine increased by more than 40 percent, to about 1,200, from last year. Many of the top-ranked programs hail from institutions in the University of California system - including graduate engineering at UCLA and graduate criminal justice at UC Irvine. But Pennsylvania State University World Campus took the top spot for bachelor's programs. And in the inaugural ranking of online MBA programs, Indiana and Temple Universities and the University of North Carolina tied for first. See who emerged victorious in other categories: http://bit.ly/1cBnAsN

UNIONS COME COURTING ON CAMPUS: Adjunct faculty at dozens of colleges are forming unions to demand better pay - and to challenge higher education's increasing reliance on part-time teachers. Sensing an opportunity to bolster their numbers, national unions are pouring resources into the movement. In the past two years, they have added thousands of contingent faculty to their membership rolls. And their efforts may get a boost from a recent National Labor Relations Board ruling that creates the most favorable conditions for faculty organizing in three decades. Successful unionization drives have been held at elite private colleges such as Georgetown, at public flagships such as the University of Oregon and at small niche colleges such as the Otis College of Art and Design in Los Angeles. The non-tenured faculty who have propelled the movement say they feel an unexpected kinship with the fast-food workers who have been staging protests at McDonald's. Their schedules are unpredictable, their wages low and many feel that their contributions go unrecognized, even though they make up more than half of all teaching faculty in the U.S.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Kevin Costner (60), AJ Foyt (80), Mary Pierce (40), Howard Stern (61), The Amazing Kreskin (80).

BOXER PUNCHES OUT - All eyes on Newsom, Harris for Boxer seat: Most of the attention turned to Lt. Gov. Gavin Newsom and Attorney General Kamala Harris ... the contest could be among the most expensive Senate races in history. For years, the state's political class has buzzed about the tantalizing possibility that Newsom and Harris would one day collide ... Democratic operatives close to the pair ... said there was virtually no chance Newsom and Harris, political contemporaries who began their careers in San Francisco, would square off; instead, they said, one would run for Boxer's seat while the other would agree to wait until 2018, when the state's governorship will be open and the other Senate seat could be, too. 'They're going to make a pact,' said Joe Cotchett, a prominent San Francisco-area trial attorney who is friends with Newsom and Harris.

SPORTS BLINK - Boston picked to bid for [2024 summer] Olympics. The USOC ... will back Boston's ... bid over those from San Francisco, Washington ... [and] Los Angeles. ... During the next two-and-a-half years, [Boston] will be part of a competition that could include ... Paris, Rome, Hamburg or Berlin, Budapest, and Istanbul.

COLLEGE FOOTBALL PICK OF THE WEEK – College Playoff Championship Game: Monday 1/12, 8:30 PM ET, ESPN: #2 Oregon Ducks (13-1) vs. #4 Ohio State Buckeyes (13-1). The Ducks will be too much for THE Ohio State, Oregon 45 Ohio 24   Season to date (12-7)

COLLEGE HOCKEY GAME OF THE WEEK – Sunday 1/18, 2:00 PM ET, Bravo: #6 University of Mass-Lowell River Hawks (14-4-3) at #2 Boston University Terriers (12-3-4). A big Hockey East tilt, BU too tough at home, they win 5 – 3.   Season to date (1-0)

NFL PICK OF THE WEEK – Sunday 1/18, 3:05 PM ET, Fox: Green Bay Packers (13-4) at Seattle Seahawks (13-4). Seabirds win and head to a second consecutive Super Bowl, 28 – 20.   Season to date (13-6)

THE SWAMI’S WEEK TOP PICKS –

(NFL, Jan. 18) Indianapolis Colts (13-5) 24 at New England Patriots (13-4) 27

(SCIAC Game of the Week, Jan. 17) Women’s Hoops – University of La Verne Leopards (5-8) 52 at Claremont-Mudd-Scripps Republicans (11-3) 74

(NCAA hockey, Jan. 17) St. Lawrence University Saints (9-10-2) 2 at #4 Harvard University Crimson (10-2-2) 5

(NHL, Jan. 17) New York Islanders (28-13-1) 3 at Montreal Canadians (26-12-3) 4

Season to date (4 – 2)

MARKET WEEK - As fourth-quarter earnings season gets under way, investors are bracing for the softest U.S. profit growth in years, pinched by collapsing oil prices and a strong dollar. That double whammy ... will test the market's ability to prolong its extended bull run and will likely make for continued bumpy trading in the weeks ahead. Over the past few months, the Dow ... and S&P 500 have carved out new record highs, while suffering frequent setbacks. Both indexes hit fresh peaks in the final sessions of last year but have since experienced two straight weeks of declines.

Still, many investors and stock-market strategists say an improving U.S. economy ... will be enough momentum to keep the six-year-old bull market running. That optimism will be put to the test by the earnings season that kicks off Monday when Alcoa Inc. reports results after the close of stock trading. Overall, companies in the S&P 500 are expected by Wall Street analysts to report that profits rose 1.1 percent from a year earlier in the fourth quarter ... That would mark the slowest pace of growth since the third quarter of 2012, when earnings declined 1 percent.

DRIVING THE WEEK – Alcoa today kicks off a fourth quarter earnings season that is expected to be lackluster, pushed down by plunging oil and the rising dollar. ... Detroit auto show begins today ... JPMorgan and Wells Fargo report Wednesday. Bank of American and Citigroup report Thursday and Goldman Sachs on Friday ... President Obama has an event at the Federal Trade Commission this morning intended to "lay out his next steps in his plan to improve confidence in technology by tackling identity theft and improving consumer and student privacy" ... Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen this morning speaks at a Businesses Roundtable event ... Treasury Deputy Secretary Sarah Bloom Raskin this afternoon will meet with bankers to discuss cybersecurity ... NFIB small business survey tomorrow expected to tick down to 98.0 from 98.1 ... JOLTS report Tuesday at 10:00 a.m. expected to show openings dipping to 4,800K from 4,834K ... Retail sales Wednesday at 8:30 a.m. expected to be down 0.1 percent headline and core ... Consumer prices Friday at 8:30 a.m. expected to be up 0.2 percent headline and 0.1 percent core ... Industrial production at 9:15 a.m. Friday expected to be flat ... Univ. of Mich. consumer sentiment at 9:55 a.m. Friday expected to tick up to 94.2 from 93.6.

Next week: Words of the month, an interview with a student, and Dear Rink Rats.

Until Next Monday, Adios

Claremont, CA

January 12, 2015

#V-38-248

CARTOON OF THE WEEK –  M. Wuerker