EUCALYPTUS SQUARE: 9815 Carroll Canyon Road, Suite 204, San Diego, CA 92131
(858) 800-7996 | Serving California since 1997
(858) 800-7996 | Serving California since 1997
We like to think that the tax code is a place to find coupons for reducing your income tax. So we are constantly reading, learning and applying current coupons to our client's income in order to reduce their tax to the fullest extent allowed by law.
Often referred to as triple tax free (tax deductible, tax deferred growth, and withdrawals for medical expenses are ALWAYS tax free.) Our vote for the Best Retirement Plan (disguised as a health plan)
No earnings limits on who can contribute (unlike IRAs, ROTH - IRAs) (Can add $1,000 if over age 54)
(Non taxable income if not itemizing)
and Married individuals filing separate tax returns and dependents
And surviving spouses
If Married $1,600 per qualifying spouse
Maximum contributions allowed to reduce taxable income
Plus $1,100 if over age 49
Plus $4,000 if over age 49
Plus $8,000 if over age 49; (Note - plus $11,250 for ages 60 to 63)
Starting January 2026 - Catch-ups must be ROTHS (if earned over $150,000 in FICA wages during 2025)
$80,000 if over age 49
Reduced income tax rates applied
NOTE: Short term capital gains (1 year or less) are taxed at ordinary rates up to 37%)
NOTE: Any amount of unrecaptured &1250 gain is taxed at 25% (gains on real property attributable to straight-line depreciation)
NOTE: Any amount of collectibles are taxed at 28%
- must be under 17 year-olds to qualify (in addition to other requirements)
$1,400 is the refundable portion per qualifying child
Phase out $200,000 single and $400,000 joint
First 7.5% of AGI not deductible
Phase out $500,000 to $600,000 (down to $10,000)
Permanent
$40,000 Increases 1% per year through 2029
2030 limit reverts back to $10,000
California does not have a limit (but can't deduct state income tax)
Permanent
Loans prior to 2018 grandfathered in at $1,000,000
2026 - Mortgage insurance premiums are considered acquisition debt
California limit is $1,000,000 + $100,000 home equity debt
Must be personal car & lease payments don't count
Has to be a new car & lender must furnish interest statement
Vehicle under 14,000 pounds
Final assemble in US
Report VIN Number
Phase out $100,000 single & $200,000 joint
CALIFORNIA DOES NOT CONFORM
CALIFORNIA DOES NOT CONFORM
First .5% of AGI not allowed
No phase out
Applies to both cash and property
2025 last year to get full deduction
Consider DONOR ADVISED FUNDS in 2025
Educator expenses above the "above the line deduction"
Regardless of filing status
Certain Industries only (No SSTBs)
Phase out $150,000 single and $300,000 joint
Below the line deduction
Self-employed can receive this deduction (limited to income)
Still subject to Social Security and Medicare taxes
CALIFORNIA DOES NOT CONFORM
Joint is $25,000
The piece over normal pay rate (usually the half in time & one half)
Phase out $150,000 single and $300,000 joint
Below the line deduction
CALIFORNIA DOES NOT CONFORM
In addition to standard deduction
Single deduction is up to $1,000
Must elect (Form 4547)
Goes into an investment account
Grows tax deferred
Can add $5,000 (after tax money) per year up to age 18
Withdrawal - Earnings most likely taxed at LT capital gains rates
Can be used for anything - not restricted to education
Can not be withdrawn before age 18