Recent Disasters

All of us at C&D are deeply saddened by the Thomas Fire and subsequent devastation and loss of life caused by the mudslides.  Our heartfelt sympathy goes out to all who have lost loved ones, suffered injuries and lost property and irreplaceable possessions.  It is difficult to comprehend the physical and emotional impact of these dual catastrophes.  

We have witnessed incredible and heroic efforts by the first responders to these disasters.  The selfless acts of the fire and police departments, medical personnel and everyday heroes among us, have saved lives and comforted many.  We wish to express our gratitude for their service and courage in face of these powerful forces of nature.

At C&D, we are making a contribution to support the relief efforts.  If you are interested in contributing, the United Way of Santa Barbara County has a listing of organizations accepting donations available on their website

Team Highlight - Getting to Know Us

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Verva Enoch


Verva, a California native, was born and raised in Southern California before relocating to the Central Coast in 1984. If her name sounds familiar to you it’s probably because Verva is a long-time Valley resident since 1988.

She and her husband Bruce have five children and are proud grandparents to 11 grandchildren! When her youngest child was in grade school, Verva returned to school to attend night classes while working full-time. She graduated magna cum laude from the University of Laverne in 1994 and she placed within the top 100 in the nation and 5th in the state of California the year she passed the CPA exam.  She then went on to earn her CVA, Certified Valuation Analyst, in 1999. Adding to her list of accomplishments, Verva has also served as an instructor for the Becker CPA review course.

Verva certainly keeps busy, but in her free time she enjoys wine tasting with Bruce and getting together with friends and family for home cooked meals and wine pairing.  C&D Profile


Leisure Activities: Love to read whenever I get the chance. Almost any genre-if it is well written. Also, love to travel to see family-mostly grandkids these days!

Bucket List: Would love to teach again someday

Community Activities: Member of Rotary for over 20 years, currently Executive Secretary for the Santa Ynez Rotary Foundation and past President of the Santa Ynez Valley Rotary Club 2000-2001. Currently on the Endowment Committee, and former Board Member and Treasurer, for the Solvang Lutheran Home.

Favorite Quote: “We learn not by talking but by listening”

2017 Fall Recruiting

Another great year of Fall Recruiting has come and gone. Our Recruiting Teams attended numerous events hosted by the Universities of Cal Poly and UCSB.  

In September, we met up with Cal Poly accounting students during their annual
CPAC Fall Symposium and the OCOB Olympics.

The first week of October our Team was at UC Santa Barbara — presenting on the Local Panel event and also mingling with candidates at Meet the Firms

Which tax-advantaged health account should be part of your benefits package?


On October 12, an executive order was signed that, among other things, seeks to expand Health Reimbursement Arrangements (HRAs). HRAs are just one type of tax-advantaged account you can provide your employees to help fund their health care expenses. Also available are Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Which one should you include in your benefits package? Here’s a look at the similarities and differences: 

HRA. An HRA is an employer-sponsored account that reimburses employees for medical expenses. Contributions are excluded from taxable income and there’s no government-set limit on their annual amount. But only you as the employer can contribute to an HRA; employees aren’t allowed to contribute. 

Also, the Affordable Care Act puts some limits on how HRAs can be offered. The October 12 executive order directs the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regs or revising guidance to “increase the usability of HRAs,” expand the ability of employers to offer HRAs to their employees, and “allow HRAs to be used in conjunction with nongroup coverage.”

HSA. If you provide employees a qualified high-deductible health plan (HDHP), you can also sponsor HSAs for them. Pretax contributions can be made by both you and the employee. The 2017 contribution limits (employer and employee combined) are $3,400 for self-only coverage and $6,750 for family coverage. The 2018 limits are $3,450 and $6,900, respectively. Plus, for employees age 55 or older, an additional $1,000 can be contributed. 

The employee owns the account, which can bear interest or be invested, growing tax-deferred similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and employees can carry over a balance from year to year. 

FSA. Regardless of whether you provide an HDHP, you can sponsor FSAs that allow employees to redirect pretax income up to a limit you set (not to exceed $2,600 in 2017 and expected to remain the same for 2018). You, as the employer, can make additional contributions, generally either by matching employer contributions up to 100% or by contributing up to $500. The plan pays or reimburses employees for qualified medical expenses. 

What employees don’t use by the plan year’s end, they generally lose — though you can choose to have your plan allow employees to roll over up to $500 to the next year or give them a 2 1/2-month grace period to incur expenses to use up the previous year’s contribution. If employees have an HSA, their FSA must be limited to funding certain “permitted” expenses.

If you’d like to offer your employees a tax-advantaged way to fund health care costs but are unsure which type of account is best for your business and your employees, please contact us. We can provide the additional details you need to make a sound decision.

© 2017

Timing strategies could become more powerful in 2017, depending on what happens with tax reform


Projecting your business income and expenses for this year and next can allow you to time when you recognize income and incur deductible expenses to your tax advantage. Typically, it’s better to defer tax. This might end up being especially true this year, if tax reform legislation is signed into law.

Timing strategies for businesses

Here are two timing strategies that can help businesses defer taxes:

1. Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services. 

2. Accelerate deductible expenses into the current year. If you’re a cash-basis taxpayer, you may make a state estimated tax payment before December 31, so you can deduct it this year rather than next. Both cash- and accrual-basis taxpayers can charge expenses on a credit card and deduct them in the year charged, regardless of when the credit card bill is paid.

Potential impact of tax reform

These deferral strategies could be particularly powerful if tax legislation is signed into law this year that reflects the nine-page “Unified Framework for Fixing Our Broken Tax Code” that President Trump and congressional Republicans released on September 27. 

Among other things, the framework calls for reduced tax rates for corporations and flow-through entities as well as the elimination of many business deductions. If such changes were to go into effect in 2018, there could be a significant incentive for businesses to defer income to 2018 and accelerate deductible expenses into 2017.

But if you think you’ll be in a higher tax bracket next year (such as if your business is having a bad year in 2017 but the outlook is much brighter for 2018 and you don’t expect that tax rates will go down), consider taking the opposite approach instead — accelerating income and deferring deductible expenses. This will increase your tax bill this year but might save you tax over the two-year period. 

Be prepared

Because of tax law uncertainty, in 2017 you may want to wait until closer to the end of the year to implement some of your year-end tax planning strategies. But you need to be ready to act quickly if tax legislation is signed into law. So keep an eye on developments in Washington and contact us to discuss the best strategies for you this year based on your particular situation.

© 2017

C&D llp Receives CalCPA Award

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C&D is honored to be a recipient of the CalCPA award recognizing our dedication and commitment to our profession.  We participate in the CalCPA "100% Firm Membership Program" which provides exclusive professional development benefits for our staff and helps us ensure we can provide excellent service to our clients.  

Ranked in the 66th percentile, we were featured in the "Top 150 Firms" article in the September 2017 issue of California CPA magazine.

Two ways spouse-owned businesses can reduce their self-employment tax bill

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If you own a profitable, unincorporated business with your spouse, you probably find the high self-employment (SE) tax bills burdensome. An unincorporated business in which both spouses are active is typically treated by the IRS as a partnership owned 50/50 by the spouses. (For simplicity, when we refer to “partnerships,” we’ll include in our definition limited liability companies that are treated as partnerships for federal tax purposes.) 

For 2017, that means you’ll each pay the maximum 15.3% SE tax rate on the first $127,200 of your respective shares of net SE income from the business. Those bills can mount up if your business is profitable. To illustrate: Suppose your business generates $250,000 of net SE income in 2017. Each of you will owe $19,125 ($125,000 × 15.3%), for a combined total of $38,250. 

Fortunately, there are ways spouse-owned businesses can lower their combined SE tax hit. Here are two. 

1. Establish that you don’t have a spouse-owned partnership

While the IRS creates the impression that involvement by both spouses in an unincorporated business automatically creates a partnership for federal tax purposes, in many cases, it will have a tough time making the argument — especially when:

  • The spouses have no discernible partnership agreement; and
  • The business hasn’t been represented as a partnership to third parties, such as banks and customers.

If you can establish that your business is a sole proprietorship (or a single-member LLC treated as a sole proprietorship for tax purposes), only the spouse who is considered the proprietor owes SE tax. 

Let’s assume the same facts as in the previous example, except that your business is a sole proprietorship operated by one spouse. Now you have to calculate SE tax for only that spouse. For 2017, the SE tax bill is $23,023 [($127,200 × 15.3%) + ($122,800 × 2.9%)]. That’s much less than the combined SE tax bill from the first example ($38,250). 

2. Establish that you don’t have a 50/50 spouse-owned partnership

Even if you do have a spouse-owned partnership, it’s not a given that it’s a 50/50 one. Your business might more properly be characterized as owned, say, 80% by one spouse and 20% by the other spouse, because one spouse does much more work than the other. 

Let’s assume the same facts as in the first example, except that your business is an 80/20 spouse-owned partnership. In this scenario, the 80% spouse has net SE income of $200,000, and the 20% spouse has net SE income of $50,000. For 2017, the SE tax bill for the 80% spouse is $21,573 [($127,200 × 15.3%) + ($72,800 × 2.9%)], and the SE tax bill for the 20% spouse is $7,650 ($50,000 × 15.3%). The combined total SE tax bill is only $29,223 ($21,573 + $7,650). 

More-complicated strategies are also available. Contact us to learn more about how you can reduce your spouse-owned business’s SE taxes. 

© 2017

Team Highlights — Getting to Know Us


Tammy Vogsland

Managing Partner

Tammy may have been born and raised in North Dakota, but after graduating from Moorhead State University, Minnesota, Summa Cum Laude with a degree in accounting and passing the CPA Exam, she and her husband decided to move to California to pursue their careers in warmer weather.

They initially settled in Santa Barbara area where Tammy spent 15 years building her practice. She joined C&D in 1999 and 4 years later, in 2003, became a partner. Tammy and her husband, Jeff, have one son, Wyatt who turned 20 this summer.  Wyatt is studying at SBCC while also working in the construction field, and Jeff has an overseas position with ExxonMobil.

Her passion for horses led Tammy to the Santa Ynez Valley in 1991 and she has been riding ever since.  Traveling and pursuing adventure activities with her guys is Tammy's idea of fun.  They had a great family trip to Whitefish, Montana this summer where they water skied, jet skied, went whitewater rafting and ATV’ing.  In her spare time, Tammy also enjoys hiking, exercise, cooking and reading.  C&D Profile

Favorite Things:

Food:  Almost anything except onions! 

Musician:  Classic Rock and Country

Movies, Books:  Action, adventure and mysteries

Hobbies/Sports:  Horseback riding, C&D softball team, hiking around the Valley

Bucket List:  More time riding, owning a ranch and when the time is right, an extended trip to Italy/France

Community Involvement:  Baseball Boosters, supporting local organizations, former Treasurer of Santa Ynez Valley Historical Society and Advisory Committee for The Latkin Foundation

2017 Q4 tax calendar: Key deadlines for businesses and other employers

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Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2017. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. 

October 16

  • If a calendar-year C corporation that filed an automatic six-month extension:
  • File a 2016 income tax return (Form 1120) and pay any tax, interest and penalties due.
  • Make contributions for 2016 to certain employer-sponsored retirement plans.

October 31

  • Report income tax withholding and FICA taxes for third quarter 2017 (Form 941) and pay any tax due. (See exception below.)

November 13

  • Report income tax withholding and FICA taxes for third quarter 2017 (Form 941), if you deposited on time and in full all of the associated taxes due.

December 15

  • If a calendar-year C corporation, pay the fourth installment of 2017 estimated income taxes.

© 2017