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When it comes to preparing your tax return, whether you use a professional, do them yourself or just ignore them, there are a number of trouble spots or tax traps of which you should be aware and for which you should plan.
Listening to the news, we hear often of increasing deficit and decreasing tax revenues. This along with the complexity of these, “traps,” makes it apparent that taxes are not going to become simplified or less costly. In addition, these trends show that it has become necessary to plan for these during the year and not just wait and see what happens, when your taxes are prepared. Because of all of this, one’s tax situation should not be ignored during the year, but should be monitored periodically.
There are several areas of concern. However, there is one particular issue that is trapping more and more taxpayers into increased tax bills and that issue is the Alternative Minimum Tax, AMT. This is somewhat of a stealth issue because it seems that very few individuals know of its existence, yet every year its provisions are affecting more and more people.
The AMT, is a separate method of determining income tax. Despite the name, every taxpayer is potentially subject to this tax. The AMT is actually a flat tax, having its rates being either 26 percent or 28 percent depending on one’s level of income. If you are subject to this tax, you must prepare your income tax return and determine your tax using both the regular and alternative rules. You compare the tax calculated under both methods and pay the larger amount.
Most good software companies do the AMT calculations, when you use their products. However care must be taken to properly code preference items. Since the Internal Revenue Service is focusing on compliance, errors in doing this could generate letters from the IRS questioning items on your return.
The AMT appears to be a big secret, as most people I speak with have no idea what the AMT is. The AMT is in response to reports that wealthy taxpayers were paying no income tax due to “special deductions” only available to the rich. The AMT began in 1969 and reportedly was originally intended to apply to only 155 taxpayers.
The first step is to calculate AMT income. In general, this is calculated by adjusting the taxpayer’s current regular taxable income, using all the traditional laws, with a number of tax preference items and adjustments.
Tax preference items are additions to income with income that is generally excluded from regular taxable income. These items include tax-exempt interest from certain private activity bonds, depletion, intangible drilling costs and accelerated depreciation from certain property placed into service before 1987.
While tax preference items appear generally for the wealthy taxpayers, adjustments affects almost everyone and can either increase or decrease alternative income. These adjustments include the standard deduction or some itemized deductions, the personal exemptions, incentive stock options and the passive activity loss limitations, which include losses from residential and commercial rental activities.
From the total of regular taxable income with preference items and adjustments either added or subtracted, an exemption reduces that total. The exemptions for 2008 returns are $46,200 for single or head of household taxpayers, $69,950 for married filing jointly taxpayers and $34,975 for married taxpayers who file separately. This calculation will provide Alternative Minimum Taxable income, AMTI. This figure is multiplied by either 26 percent or 28 percent depending on one’s income. And you now have the AMT tax. This tax is compared to your tax liability calculated by regular tax rules and guess what? You pay the larger of the two taxes.
These calculations are found on IRS form 6251 and are a bit more complex than I have mentioned here. There is also a worksheet available from the IRS which will estimate, if you are subject to this tax. The complexities come from income from capital gains, large income over the AMT limits and AMT credits. However, to explain everything would take way too much space for one article. The State of California also has an AMT, which follows the federal rules somewhat closely.
The problems with the AMT are too numerous to fully mention. Not only are the rules extremely complex, but the exemptions amounts have not been regularly indexed for inflation, as California has regularly done.
In addition, the adjustments of the itemized or standard deductions and personal exemptions place the burden of this tax squarely on the shoulders of taxpayers that were never intended to be part of this system. The exemption amount for tax years 2007 and 2008 were scheduled to drop dramatically which would of caused millions of unsuspecting taxpayers to fall under the AMT. Only at seemly the last minute were “patches” added to the laws which kept the exemptions at the current levels.
The big question is, what will happen for tax year 2009? The AMT would be a very easy way to dramatically increase tax revenue. In addition, should this happen, some of your tax planning may become meaningless.
It is estimated by the taxpayer’s advocate’s office that without major changes, the AMT could affect over 30 million taxpayers by the year 2010. With the economy and tax revenue, as it currently stands, this appears to be a tax that is not going away soon.
With all the fallout from the “financial crisis” it is becoming very clear that the financial and tax rules have changed and will continue to change. Most likely the change will not be in the favor of ordinary taxpayers. The consequences of not knowing how your financial actions will affect your tax return could cause you to have a very large tax liability next year.
Jon Meyer is a local tax accountant and enrolled agent with over 25 years experience in tax preparation. The office of Jon the “Tax Man Meyer “also offers retirement planning and insurance options. Questions regarding this article can be made by calling 928-5200.
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ANDERSON SPRINGS – Things are tough all over, and people struggling with addiction are seeing a steady decline in services during a time when the services are paramount.
At the same time, economic hardships often contribute to escalating numbers of substance abuse and alcohol related problems in society.
Lori Carter-Runyon, executive director of Hilltop Recovery Services, said she was shocked when she received the call that the Ford Street treatment program in Ukiah was closing.
“They have been in business for so long and are providing such a needed service, I would have never imagined that they were being hit so hard from the budget crisis,” she said.
She and husband Ryan Runyon, who run the men’s inpatient recovery program, were asked by Centerpoint Inc., the agency they are contracted through, how many of the men from Ford Street they could take in at the Lake County facility.
Hilltop, located off of Socrates Mine Road, had eight beds available. The Runyons knew they might not get paid for months with the uncertainty of state IOUs looming.
The men from Ford Street needed to be somewhere, though. Options included homelessness and, for some, prison if they couldn’t be placed.
“It is my understanding that Centerpoint was able to place everyone – some went to the Bay Area- others to Humboldt County and some went home,” Carter-Runyon said.
She said that as the news spread about Ford Street, Hilltop residents asked if this was going to happen at the Lake County facility, and even staff wanted to know if they were in jeopardy of soon joining the ranks of the unemployed.
“I’ve done my best to assure them that we were OK for the time being – but I am definitely nervous,” said Carter-Runyon. “We are such a young program, being in business for only two years, and now we are the only local men’s residential treatment facility.”
She’s highly attuned with the state budget because it directly impacts the ability to continue operations. The agency they are contracted through for state referrals notified them some time ago that they may not be getting paid on schedule. Hilltop’s contractor lost six providers and another 13 through the state.
“They let us know that if the state was not paying them, they would not be able to pay us,” Carter-Runyon said. “As soon as I received this information I began tightening the reins on spending and prepared for the worst. I had our credit increased on the company credit card, and have gone to our bank to ask for a line of credit.”
At the present time they have enough funds on hand to make it through March, and with the bank loan could make it through April, but the bank denied the loan based on the state budget issues. They have a contract that is not state funded and a few private pay clients that provide some money. The program is primarily dependent on contracts funded through the state.
“It’s a relief that the budget was passed, but no money is being released yet. If we don’t see change, we’ll have to close our doors April 15,” Carter-Runyon said.
She added, “I’m doing my best to budget everything, and pay the minimum amounts so Hilltop can survive. We are going to need help.”
Clucky Plucky Poultry of Kelseyville donated 480 pounds of chicken, helping to feed the residents of Hilltop Recovery. Worldmark Wyndham Resorts donated patio furniture last spring and continue to donate bedding. Many community members donated much-needed men’s clothing.
Treatment saves money. The cost of incarceration compared to treatment puts the burden of millions more dollars on the taxpayers backs.
“The community support is extremely needed. It may be the thing that keeps us above water – with clothing, shoes, linens and foods donated, I can focus on the paying my employees, the utilities and keeping the residents fed until the funds are released,” Carter-Runyon said.
For more information on Hilltop Recovery and how to help, call 987-9972 or visit the center's Web site at www.hilltoprecovery.com.
E-mail Mandy Feder at
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The Saw Shop Gallery Bistro is arguably Kelseyville’s least best-kept secret. I doubt that there are more than a handful of people in the county who haven’t at least heard of it if not actually eaten there. Since its opening it has maintained its paradigm of fine dining.
I’ll admit that I ate there a couple of years ago and I was disappointed. Back then I thought the food was overpriced and not very inspired, and I wondered why everyone kept talking about the place. But recently I’ve been hearing a lot of good comments about what Chef Jeremy Zabel has been doing during his reign there.
During a recent outing in Kelseyville my wife and I decided to try the Saw Shop again so I could evaluate Zabel’s changes. I haven’t personally met Zabel so I had no idea what to expect; this could be very interesting.
The menu can best be described as concise but eclectic. There’s a little bit of something from all over the world. I started with the tuna sashimi with the soy orange reduction and followed it with the prawns in Thai red curry. My wife ordered the chipotle tomato soup followed by the four cheese macaroni. Everything on the menu was less than $10 so that was a noticeable change from my previous visit right from the start.
The chipotle tomato soup was perfectly seasoned for me and was just what I would have hoped it would be from the menu description, but alas, it was my wife’s dish. She thought it was a tad, just a tad, too spicy, but she has a tender palate. She ate it all so it mustn’t have been too big a deterrent for her; the excellent flavor obviously outweighed the heat.
The tuna was very high quality (easily spotted by a sushi connoisseur like myself) but there was a little bit of sinew that was distracting to me. The orange soy reduction drizzled over the fish is fantastic and a composition I never would have even considered.
There was also a micro-green salad consisting partially of arugula and radish with other greens I couldn’t quite identify that I greedily wolfed down. I love micro-greens, they’re just so pure and new tasting. Amusingly (to me) I had already begun writing a column about micro-greens just before we left for The Saw Shop.
The four cheese macaroni was rich and evenly flavored with Gouda, parmesan, cheddar and, OK I’ll admit it, we don’t remember the fourth one. I don’t take notes as I eat since it causes the staff to stare at you. It also was flavored with bits of applewood bacon, which went perfectly with the cheese blend. It was fantastic in an “Oh my god this is so good but so rich” sense. The penne pasta was al dente and oozed cheese when stabbed with a fork. My wife claimed it was a flavor that she could eat every day. The portion was a good size and it was so rich that she couldn’t finish the entire plate, no matter how hard she tried.
The Thai red curry was as close to being like real Thai food without actually being in a Thai restaurant. The shrimp were huge and the chunks of vegetables were well cooked without being overdone. Red curry is typically the hottest of the curry blends and while it wasn’t too hot for me, if you aren’t a chile head be forewarned. There was a side of rice that will help cool the heat if you need it. I used the rice to soak up all of the red curry sauce so I wouldn’t miss a drop.
The wine list is filled with local wines by the bottle or by the glass. The variety is a little tight but with good exposure. I’d still like to see more selection of local wines that aren’t quite so common in local restaurants. For example, I found it a little odd that The Saw Shop is mere steps from the Rosa d’Oro tasting room yet carries none of their wines. The beverage prices are average for most restaurants.
Our waitress Annie was efficient and personable, but for some odd reason I was distracted by the necktie loosely worn around her neck. My weird psyche kept thinking ,“If there WAS a lumber mill here that would easily get caught in the machinery”... I know, a complete non sequitur, but that’s just how my brain works.
The art that decorates the wall is beautiful and is all for sale, but my taste in art is limited to sculptures of naked women and paintings of dogs playing poker so I felt a little intimidated by the opulence. My wife, the one of us that has good artistic taste and style, spent a couple of minutes wandering the dining room examining the displays. She informed me that there were some very good quality pieces.
So I came away from the place everyone is always talking about wanting to talk about it too. If you haven’t been to The Saw Shop recently it is definitely worth it. My wife and I were fortunate to sneak in just before a lunch rush, but if you don’t want to wait it’s a good idea to call ahead for a reservation.
The Saw Shop Gallery Bistro, 3825 Main Street, Kelseyville; telephone 278-0129. Visit the restaurant on the Internet at www.sawshopbistro.com, where you can see sample menus and wine lists, find out about events and read about Executive Chef Jeremy Zabel.
Ross A. Christensen is an award-winning gardener and gourmet cook. He is the author of "Sushi A to Z, The Ultimate Guide" and is currently working on a new book. He has been a public speaker for many years and enjoys being involved in the community.
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I called many businesses to formulate this list; some of them told me to “check our Web site” but when I did they had no current events posted, so I am sorry if I missed any.
Many thanks to the Lake County Visitor Information Center and the Lake County Marketing Department who compiled much of this information.
As a special note, the Moore Family Wineries Irish feast on March 14 needs an RSVP by March 1, so if you intend to attend let them know ASAP.
March 1: Fish Fry, Howard’s Grotto, Clearlake. Lioness Club benefit for community projects and scholarships. $8 at the door. 3 p.m. to 7 p.m. 994-0441.
March 1: Sunday Brunch in the Garden, The Blue Wing, Upper Lake. Brunch served 10 a.m. to 3 p.m. George Husaruk will be playing the flute, 11:30 a.m. to 2 p.m. 275-2244.
March 2: Monday Blues, The Blue Wing, Upper Lake. 6:30 p.m. to 9 p.m. Blues Farm will perform. 275-2244.
March 3: Meet the Winemaker, The Saw Shop, Kelseyville. 6 p.m. Robleto Winery. 278-0129.
March 6: Meet the Winemaker, The Blue Wing, Upper Lake. 6 p.m. to 9 p.m. Jed Steele and Joy Merrilees will be pouring Steele Wines.
March 7: Pruning & Pastries, Six Sigma Ranch, Vineyards & Winery, Lower Lake. 10 a.m. to noon. Vineyard Manager David Weiss demonstrates hands-on winter pruning. $10 per person, pastries will be served. Reserve a space by March 5. 994-2086.
March 8: Sunday Brunch in the Garden, The Blue Wing, Upper Lake. Brunch served 10 a.m. to 3 p.m. Stephen Holland on guitar and vocals, 11:30 a.m. to 2 p.m. 275-2244.
March 9: Monday Blues, The Blue Wing, Upper Lake. 6:30 p.m. to 9 p.m. Hanson Raitt Band will perform. 275-2244.
March 14: Wine Tasting and Art Show, Best Western El Grande Inn, Clearlake. 5 p.m. to 8 p.m. Seventeenth annual event featuring local wines and exhibitions from local artists. Silent auction, raffle, door prizes and music. Benefit for the Park Study Club’s scholarship fund. Tickets are $20. 995-9316.
March 14: Irish Feast with Molly Brennan’s, Moore Family Winery. A three course Irish feast with wine and live Irish music at the Moore Family Winery’s Tasting Room. $40 per person. RSVP to Stepheny by March 1. 738-0507
March 15: Sunday Brunch in the Garden, The Blue Wing, Upper Lake. Brunch served 10 a.m. to 3 p.m. Travis Austin will be playing flamenco guitar, 11:30 a.m. to 2 p.m. 275-2244
March 16: Monday Blues, The Blue Wing, Upper Lake. 6:30 p.m. to 9 p.m. Twice As Good will perform. 275-2244.
March 21: Winemaker’s lunch, Ceago Winery, Nice. 11 a.m. to 2 p.m. Jim Fetzer will host a luncheon celebrating the spring equinox with a food prepared by Chef Nicolas. Wine club members; $40; nonmembers, $50.
March 22: Sunday Brunch in the Garden, The Blue Wing, Upper Lake. Brunch served 10 a.m. to 3 p.m. Chris Forshay on guitar and vocals, 11:30 a.m. to 2 p.m. 275-2244.
March 23: Monday Blues, The Blue Wing, Upper Lake. 6:30 p.m. to 9 p.m. Levi Lloyd Band will perform. 275-2244.
March 27: Lake Wind Ensemble, Tallman Hotel, Upper Lake. Featuring Beth Aiken on oboe, Ann Hubbard on bassoon and Nick Biondo on clarinet. Pam Prisco will pour Steele Wines. Tickets to this event can be obtained by calling the Tallman Hotel reception desk at 275-2244. The cost for each reception and concert is $40.
March 28 and 29: The Fifth Annual Tulip Festival, Tulip Hill Winery, noon to 4 p.m. Live music, wine, food and winery tours and 50,000 tulips will be in bloom. $25 in advance $30 the day of the event.
March 29: Sunday Brunch in the Garden, The Blue Wing, Upper Lake. Brunch served 10 a.m. to 3 p.m. Sarah Tichava on guitar and vocals, 11:30 a.m. to 2 p.m. 275-2244.
March 29: Wine Tasting Basics, Moore Family Winery, Gary Johnson will be matching MFW with small bites, free logo glass and wine wheel. 5 p.m. to 7 p.m. $25. RSVP to Stepheny by March 25. 738-0507.
March 30: Monday Blues, The Blue Wing, Upper Lake. 6:30 p.m. to 9 p.m. Lake Blues All-Stars will perform. 275-2244
Ongoing activities
The New Cool at Konocti Harbor featuring David Neft. Konocti Harbor hosts “The Piano Man” David Neft, playing the grand piano from 6 p.m. to 9 p.m. every Friday and Saturday in the relaunched dining room. www.konoctiharbor.com.
Langtry Estate and Vineyard is offering exciting and innovative tour programs. Guests ride in battery-operated Global Electric Motorcars. Tours are offered Tuesday through Saturday. The Tephra Vineyard Lunch Tours are offered at 11 a.m. and 1 p.m. $40 per person includes lunch and wine tasting. 21000 Butts Canyon Road. Reservations required 24 hours in advance. Info: 987-2385.
Tuscan Village Friday Concert Series, Main Street, Lower Lake. Live music, food, wine tasting. Presented by 2Goombas and Terrill Cellars. 5:30 p.m. to 8:30 p.m. Info: 994-3354.
Beer Master Dinner Series, Molly Brennan’s 175 N. Main St., Lakeport. Second Tuesday of each month, 6:30 p.m. to 9:30 p.m. Different brewery featured each month, with beers paired with each course of a five-course meal including dessert. Advance reservations required. Info: 262-1600.
If you have a food or wine related event and would like to have it listed in the coming months, please feel free to call Ross at 998-9550.
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A children’s story: For, EJF, ADLN, ARB, JNW, JBLD, JJD, RTMW, TLH and all children, everywhere.
One sunny morning Brownette woke up and it was her birthday. It had taken her a long time to become 7 years old and she was glad. As she stretched and yawned she heard a noise at her bedroom window.
TAP, TAP, TAP, TAP, TAP, TAP, TAP. She counted each sound. Seven taps. She arose from her bed and went to the window. She was surprised to see a tiny horse on the ledge.
“Birthday greetings, Brownette. Today is your lucky day. My name is Euphrates (U-FRAY-TEEZ). I am the African Birthday Horse. Each day, I find an African child whose birthday it is. I grant them the ability to travel through time with me, to be any age they want to be. So choose three ages you want to be, Brownette. But remember, the last age you choose is the age you must stay. Which age would you like to be first?”
“I think I’d like to be 20 like my older sister, Orangine. She always tells me that, twenty is a good age to be.”
As soon as Brownette said the word ‘twenty,’ the room grew to a gigantic size. Or rather, she shrunk, because suddenly she was smaller than Euphrates.
“Climb aboard, Brownette. It will be a short ride. Twenty is not so far away. When we land, I’ll disappear, but when you’ve had enough of twenty, I’ll be near. Just shout my name loud and clear.”
Brownette mounted Euphrates. She suddenly felt like she was on an elevator going sideways. Just as she was getting used to this strange feeling, it stopped. Euphrates disappeared. She was still in her room but something was different. She felt bigger. She walked over to her mirror and was surprised to see she looked all grown up. She wanted to rush downstairs and show her Mommy and Daddy how she had grown, but before she could the phone rang. She answered it.
“Hello.”
“Hello, Brownette. This is Nathan. How are you?”
“Fine, thank you. How are you?” Brownette answered slowly, not sure who Nathan was.
“Brownette, I have been wanting to ask you a long time if you would marry me,” asked Nathan.
“Hold on a minute. I have to do something.”
“EUPHRATES!”
The African Birthday Horse appeared.
“I told you I’d be near,” said he.
“I don’t think I like this age very much. Can I be 40 now? Mommy and Daddy are 40 and they’re pretty cool.”
“Climb aboard to see what’s in store at the age of 10 times four,” rhymed Euphrates.
When the feeling stopped she was in a strange house, in a strange kitchen with seven strange little children tugging on her skirt. They were all talking at once.
“MOMMY I CAN’T FIND MY SHIRT HE HIT ME I DID NOT SHE DID IT AND I TOLD YOU I WAS TELLING MOMMY I’M HUNGRY CAN I GO OUTSIDE MOMMY MOMMY MOMMY!”
“EUPHRATES!”
The African Birthday Horse appeared.
“What is it, child?”
“Forty is not the age for me. I think I would just like to be me.”
In a very short time, Euphrates had Brownette back in her room at her right age. It had been fun riding with Euphrates but she was glad to be back. Plus she still had her birthday to enjoy. And she did just that. She even had cake and ice cream twice – once at home and once at her grandparent’s house. But she never forgot about Euphrates, the African Birthday Horse!
Keep prayin’, keep thinkin’ those kind thoughts!
*****
Upcoming cool events:
The Lake County Branch of the NAACP will hold its annual Black History Program on Feb. 28 at Praises of Zion Baptist Church, 3890 Emile Ave., Clearlake, from 1 p.m. to 4 p.m. The public is invited. For more information call 995-2545.
Calling For Light: A Spring Concert of Poetry and Music. Carolyn Hawley, Piano. Chopin and original Works. Accompaniment to Poetry. T. Watts, accompaniment on Trumpet. Lake County Poets Laureate Mary McMillan, Sandra Wade, Carolyn Wing Greenlee, James Bluewolf and Jim Lyle. Sunday, March 15, 3 p.m. Galilee Lutheran Church, 8860 Soda Bay Road, Kelseyville. Tickets are $10 in advance at Watershed Books, Lakeport and Wild About Books, Clearlake. $15 at the door. Children may attend for free. A benefit for KPFZ 88.1 FM.
T. Watts is a writer, radio host and music critic. Visit his Web site at www.teewatts.biz.
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LAKEPORT – A Lake County Superior Court judge on Friday turned down a motion to reduce charges against a man accused of felony manslaughter involving a boat and boating under the influence.
Sacramento defense attorney Victor Haltom sought the charge reductions on behalf of his client, Bismarck Dinius, 40, of Carmichael.
Dinius is facing charges that arise from an April 2006 boating collision on Clear Lake, during which Willows resident Lynn Thornton, 51, was fatally injured, dying a few days later.
He was at the tiller of a sailboat owned by Thornton's fiance, Mark Weber of Willows, when the sailboat was hit by a speedboat driven by Russell Perdock, currently a captain in the Lake County Sheriff's Office.
Following an investigation which the Sacramento County Sheriff's Office was called in to lead, Dinius was charged in the case. The District Attorney's Office alleges that the sailboat's running lights weren't on and says Dinius was under the influence of alcohol. Perdock was not charged in the case.
Following several hours of delays due to other cases, Dinius' case was heard Friday afternoon by Judge Richard Martin.
Haltom had filed a request that the felony charges against Dinius be reduced to misdemeanors. In his argument he went one step further, referring to a procedure which gives a magistrate or superior court judge the authority to grant a full dismissal of all charges.
Deputy District Attorney John Langan offered no opposing arguments during the afternoon court session.
Judge Martin said he had spent a significant amount of time researching Haltom’s basis for the motion.
Then, in a 20-minute response, Martin denied Haltom's request, explaining that, despite the technical and creative merits of Haltom’s motion, it was not timely, as a window of opportunity to submit motions of this type had come and gone.
Martin further explained that the next window of opportunity available to the defense to request a review of such a motion would be between the point of conviction and the time of sentencing.
Following the decision, Haltom asked the court to allow members of Lynn Thornton’s family to address the court. Several of them – who had mailed letters to the judge stating their position in defense of Dinius – were present in court on Friday.
Martin denied the request to hear from the family, suggesting that the best place for such testimony is in front of a jury.
While still in the courtroom and discussing future court dates with Martin and Langan, Haltom informed the court that he would be seeking DNA samples from Perdock. Haltom openly expressed his doubts as to the validity of the blood samples allegedly taken the night of the incident.
“I have good reason to believe that the blood in the vials may not be Perdock's blood,” said Haltom.
Prior to the hearing, Dinius told Lake County News that he was cautiously optimistic about the motion's possibility of success. The worst-case scenario for him now is that he could end up spending four years in prison for the manslaughter charge.
After the hearing Dinius said he felt that local authorities will force the case to go before a jury.
Before the hearing, Haltom stated that the ability to charge Perdock in the case runs out on April 26 due to the statute of limitations. He made that point in court as well.
Langan remained in the courtroom on court business and was unavailable for comments immediately after the hearing.
The next court appearance in the case is March 27, during which Dinius does not need to be present. Other pretrial hearings are scheduled for April 20 and May 15, with his trial tentatively scheduled to begin on May 19.
E-mail Harold LaBonte at
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