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Californians can expect Head of Household Audit Letters

The California Franchise Tax Board (FTB) has mailed more than 120,000 audit letters to taxpayers to verify their head of household (HOH) filing status on their 2011 state income tax returns. Each year, the FTB reviews the tax returns of taxpayers who claim the HOH filing status because the qualifications are commonly misunderstood. Taxpayers can generally claim the HOH filing status if they are unmarried, have cared for a qualified person for more than half the year, and paid more than half the cost of maintaining their home.

Taxpayers who do not qualify will have their tax reassessed using either the single or married-filing-separate filing status. Nearly 28,000 California taxpayers who claimed the HOH status last year did not meet its requirements.

The FTB encourages taxpayers who receive an HOH audit letter to respond promptly by completing the enclosed questionnaire. Failure to respond could result in a tax assessment and penalty.

News Release, California Franchise Tax. Board, August 8, 2012

By Linkenheimer LLP|2020-09-03T20:06:02+00:00August 13th, 2012|audit, CPA, head of household, HOH, letter, Linkenheimer, Santa Rosa, state income, taxpayers california franchise tax board|0 Comments

Tax Increases Coming in 2012 under Affordable Care Act

Tax Increases Coming in 2012 under Affordable Care Act

Fast forward to next year and we are looking at a number of important tax increases on the horizon. The tax increases falls under the the Affordable Care Act (the Patient Protection and Affordable Care Act, P.L. 111-148, and the Health Care and Education Reconciliation Act of 2010, P.L. 111-152), and include higher Medicare taxes for high earners, a 3.8% surtax on unearned income of higher-income individuals and caps on FSA contributions. Companies also get to look forward to compliance issues, along with new health insurance deduction limitations and fees.

Increased Medicare tax for high-earning workers and self-employed taxpayers. For the tax year beginning after 2012, an additional 0.9% hospital insurance tax applies to wages and self employment income in excess of $250,000 for joint returns, $125,000 for married filing separately and $200,000 in all other cases.

Surtax on unearned income of higher-income individuals. Starting in 2013, an unearned income Medicare contribution tax is imposed on individuals, estates, and trusts. The tax is 3.8% of the lesser of either (1) net investment income or (2) the excess of modified adjusted gross income over the threshold amount ($250,000 for a […]

By Linkenheimer LLP|2012-07-27T22:35:00+00:00July 27th, 2012|2012, act, affordable, affordable care act, care, CPA, health care reform, Linkenheimer, medicare, Santa Rosa, tax increase|0 Comments

Health Care Reform Updates

The U.S. Supreme Court on Thursday declared the mandate in Sec. 5000A, requiring U.S. citizens and legal residents to maintain minimum essential health coverage, to be a permissible exercise of Congress’s taxing powers under the Constitution.

So what does this mean for you?

Individual mandate to take effect starting 2014
All tax provisions upheld
Penalty on states for refusing expanded medicaid unconstitutional
Premium assistance tax credit to help offset cost of coverage
Limits on health FSAs and other arrangements continue
Small employer health insurance tax credit preserved
Codified economic substance doctrine sustained

Those are the highlights, but there are plenty of other details involved in the new legislation.

For additional articles, click here (CCH) and here (JOA)

By Linkenheimer LLP|2020-09-03T20:06:02+00:00July 18th, 2012|CPA, Health care, Linkenheimer, reform, Santa Rosa, Supreme court, tax|0 Comments

John Jones Recognized by Press Democrat for Global Eye Care Projects

John Jones’ good deeds have not gone unnoticed. On Sunday, July 8th, the Press Democrat released an article detailing his many trips to Nicaragua. Over the past 17 years, John has led and organized over 10 trips to Third World countries delivering basic health services. During those 17 years, he has helped over 15,000 people see more clearly.

John is normally accompanied by members of his local church or by fellow Rotarians. His outreach trips have included destinations such as Nicaragua, Mexico, Haiti, Guatemala, Samoa and Vietnam.

His most recent project, involves raising $100,000 for the first ever surgery center in the Rio San Juan region of Nicaragua. This remote region is home to 26,000 people who have virtually no medical care available locally. As the leader of his Rotary clubs efforts, they have already raised $46,000.

Even though he isn’t an eye doctor, the CPA has had a profound affect on the region, providing life changing health services, including eye exams and distributing eye glasses.

To read the Press Democrat article, click here.

By Linkenheimer LLP|2020-09-03T20:06:03+00:00July 17th, 2012|Advisor, charity, CPA, eye glasses, John Jones, Linkenheimer, Nicaragua, Santa Rosa|1 Comment