tax

California Tax Updates for June 25

August Calendar

Update 1:

Many California businesses are downsizing or have closed permanently due to COVID-19. The California Franchise Tax Board (FTB) has released a detailed set of steps needed to fully close a CA business entity, including links to resources from the CA Secretary of State and other state departments. The FTB highlights the need to close out tax accounts by filing delinquent returns and paying all balances due on taxes, filing a current annual or quarterly return as final, filing the appropriate closure forms with different state agencies, notifying employees and other stakeholders of the intent to close and dissolving all accounts associate with the business. For more: https://bit.ly/37e3cjI

Update 2:

Businesses that hold unclaimed property in California get extra time to file reports. Due to COVID-19, the CA State Controller (SCO) has postponed the due date for holders of such property, including unclaimed wages, to submit their Remit Reports and Remittances for properties reported on their […]

By |June 25th, 2020|business, ca, CA tax, ftb, New Tax Laws|0 Comments

California Tax Updates for June 18

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Post 1:

Have you wondered what the California Taxpayers’ Rights Advocate actually does? The CA Dept. of Tax and Fee Administration just released a report highlighting the accomplishments of the Taxpayers’ Rights Advocate’s Office (TRAO). The annual report for 2018 through 2019 gives examples of the services it provides, and information about the tax appeals assistance programs. Also listed are the goals of the Advocate, including a primary goal of ensuring that taxpayers contacting the office with issues that haven’t been resolved through normal channels have their concerns promptly and fairly addressed. Here’s the TRAO report: https://bit.ly/37cwSxS

Post 2:

California sales and use tax deadlines are coming up soon. The CA Dept. of Tax and Fee Administration (CDTFA) reminds sales and use taxpayers that June 24, 2020, is the filing due date for the May 1 through June 15, 2020 prepayment; and June 30, 2020, is the […]

By |June 18th, 2020|business, ca, CA tax, california, sales tax|0 Comments

The History of April 15th and Tax Day

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April 15 isn’t most Americans’ favorite day, and that’s because most years, it’s the official, federal tax deadline (for the first time in 65 years, tax day now falls on a different day, July 15, 2020) . Tax Day, as it’s called, has a long and interesting history in the States that goes all the way back to Abe Lincoln’s leadership. Federal income tax was introduced with the Revenue Act of 1861 to help fund the Civil War, and subsequently repealed, re-adopted, and held unconstitutional. The early taxes were based on assessments, not voluntary tax returns. Tax payment dates varied by act.

1861: The First Federal Income Tax 

Abraham Lincoln, who was an American president from 1861 to 1865, proclaimed the first federal income tax his first year in office. 1861—particularly August 5—is the historical day that marks the future-changing decision. At the time, Lincoln announced a 3% tax rate for anyone who made over $800 a year (roughly $24,000 with today’s inflation). The decision was made to help fund the Union’s efforts during the civil war. Though we are still being taxed today, Lincoln’s tax system was repealed in 1871.

1894: Tariff Act of 1894 Rules […]

By |April 15th, 2020|irs, Linkenheimer, New Tax Laws, tax deadlines|0 Comments

Cash Payments and Tax Relief for Individuals in New Law

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A new law signed by President Trump on March 27 provides a variety of tax and financial relief measures to help Americans during the coronavirus (COVID-19) pandemic. This article explains some of the tax relief for individuals in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Individual cash payments

Under the new law, an eligible individual will receive a cash payment equal to the sum of: $1,200 ($2,400 for eligible married couples filing jointly) plus $500 for each qualifying child. Eligibility is based on adjusted gross income (AGI).

Individuals who have no income, as well as those whose income comes entirely from Social Security benefits, are also eligible for the payment.

The AGI thresholds will be based on 2019 tax returns, or 2018 returns if you haven’t yet filed your 2019 returns. For those who don’t qualify on their most recently filed tax returns, there may be another option to receive some money. An individual who isn’t an eligible individual for 2019 may be eligible for 2020. The IRS won’t send cash payments to him or her. Instead, the individual will be able to claim the credit when filing a 2020 return.

The income thresholds

The […]

By |March 31st, 2020|child, individuals, New Tax Laws, relief, tax planning|0 Comments

Can You Deduct Charitable Gifts On Your Tax Return?

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Many taxpayers make charitable gifts — because they’re generous and they want to save money on their federal tax bills. But with the tax law changes that went into effect a couple years ago and the many rules that apply to charitable deductions, you may no longer get a tax break for your generosity.

Are you going to itemize?

The Tax Cuts and Jobs Act (TCJA), signed into law in 2017, didn’t put new limits on or suspend the charitable deduction, like it did with many other itemized deductions. Nevertheless, it reduces or eliminates the tax benefits of charitable giving for many taxpayers.

Itemizing saves tax only if itemized deductions exceed the standard deduction. Through 2025, the TCJA significantly increases the standard deduction. For 2020, it is $24,800 for married couples filing jointly (up from $24,400 for 2019), $18,650 for heads of households (up from $18,350 for 2019), and $12,400 for singles and married couples filing separately (up from $12,200 […]

By |March 3rd, 2020|charity, deduction, deductions, New Tax Laws, tax planning|0 Comments

Age-Related Tax and Financial Milestones

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In an era filled with uncertainty, you can count on one thing: time marches on! This article covers some important age-related tax and financial planning milestones that you should keep in mind for yourself and loved ones.

Ages 0–23

The so-called “Kiddie Tax” rules can potentially apply to your child’s (or grandchild’s) investment income until the year he or she reaches age 24. Specifically, a child’s investment income in excess of the applicable annual threshold is taxed at the parent’s marginal tax rate.

Note: For 2018 and 2019, the unfavorable income tax rates for trusts and estates were used to calculate the Kiddie Tax. Recent legislation changed this for 2020 by once again linking the child’s tax rate to the parent’s marginal tax rate. However, you may elect to apply this change to your 2018 and 2019 tax years. If we feel an election would be beneficial for 2018, we will recommend amending your return.

For 2020, the investment income threshold is $2,200. A child’s investment income below the threshold is usually taxed at benign rates (typically 0% for long-term capital gains and dividends and 0%, 10%, or 12% for ordinary investment income and short-term gains). Note […]

By |February 28th, 2020|estate, irs, New Tax Laws, tax implications|0 Comments

Cents-Per-Mile Rate for Business Miles Decreases Slightly for 2020

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This year, the optional standard mileage rate used to calculate the deductible costs of operating an automobile for business decreased by one-half cent, to 57.5 cents per mile. As a result, you might claim a lower deduction for vehicle-related expense for 2020 than you can for 2019.

Calculating your deduction

Businesses can generally deduct the actual expenses attributable to business use of vehicles. This includes gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you can claim a depreciation allowance for the vehicle. However, in many cases depreciation write-offs on vehicles are subject to certain limits that don’t apply to other types of business assets.

The cents-per-mile rate comes into play if you don’t want to keep track of actual vehicle-related expenses. With this approach, you don’t have to account for all your actual expenses, although you still must record certain information, such as the mileage for each business trip, the date and the destination.

By |February 21st, 2020|deduction, deductions, New Tax Laws, vehicles|0 Comments

IRS Launches New Identity Theft Website

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The IRS has launched “Identity Theft Central,” a new website devoted to identity theft and data security for taxpayers, tax professionals, and businesses. Available 24/7, the site provides resources on reporting identity theft and guarding against phishing, online scams, and more. Specifically, the site (1) lists steps to take if you become a victim of identity theft; (2) summarizes the responsibilities of tax professionals under the law; and (3) instructs businesses on how to recognize the signs of identity theft. Also, the page features videos on key topics that can be used by taxpayers or partner groups. The IRS encourages tax professionals to bookmark the site and periodically check the guidance for updates. Identity Theft Central can be accessed at www.irs.gov/identity-theft-central .

By |February 6th, 2020|irs|0 Comments

New Law Provides a Variety of Tax Breaks to Businesses and Employers

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While you were celebrating the holidays, you may not have noticed that Congress passed a law with a grab bag of provisions that provide tax relief to businesses and employers. The “Further Consolidated Appropriations Act, 2020” was signed into law on December 20, 2019. It makes many changes to the tax code, including an extension (generally through 2020) of more than 30 provisions that were set to expire or already expired.

Two other laws were passed as part of the law (The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act).

Here are five highlights.

Long-term part-timers can participate in 401(k)s.

Under current law, employers generally can exclude part-time employees (those who work less than 1,000 hours per year) when providing a 401(k) plan to their employees. A qualified retirement plan can generally delay participation in the plan based on an employee attaining […]

By |January 29th, 2020|401k, affordable care act, business, tax, tax credit|0 Comments

2020 Q1 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 first quarter of 2020. 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.

January 31

  • File 2019 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
  • Provide copies of 2019 Forms 1099-MISC, “Miscellaneous Income,” to recipients of income from your business where required.
  • File 2019 Forms 1099-MISC reporting nonemployee compensation payments in Box 7 with the IRS.
  • File Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” for 2019. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it’s more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.
  • File Form 941, “Employer’s Quarterly Federal Tax Return,” to report Medicare, Social Security and income taxes withheld in the fourth quarter of 2019. If your tax liability is […]
By |January 10th, 2020|business|0 Comments