The Franchise Tax Board (FTB) recently published its updated list of California's top 500 tax debtors, comprising both individuals and businesses that now collectively owe the state more than $646 million in income tax. Since October 2007, this list is updated twice annually. Taxpayers who receive notice of the FTB's intent to include them on the list and then make arrangements to pay their tax debt are removed from the publication.
The California Franchise Tax Board (FTB) recently announced the 2018 indexed threshold values for determining whether an entity is doing business in the state. If any of the following conditions are met, the taxpayer is considered to be doing business in California:
Federal and California state tax agencies have offered relief to certain taxpayers affected by the 2018 wildfires in Northern California. The Internal Revenue Service will postpone specific deadlines, waive penalties, and provide other relief as detailed here. The California Franchise Tax Board's list of qualified disasters and instructions for claiming relief can be found at this link. The California Department of Tax and Fee Administration (formerly the BOE) is also offering relief for businesses impacted by the fires, including extensions to file returns and relief from certain penalties or interest. Details on the specific CDTFA programs offering relief, and instructions for requesting relief, are available here.
The California Franchise Tax Board (FTB) recently released an update about the 2018 tax filing season. As of May 31, 2018, the FTB had processed over 17 million personal income tax (PIT) and business entity (BE) returns. Ninety-one percent of personal returns and 85 percent of business returns were e-filed. The FTB issued 10.9 million personal refunds totaling $10 billion and 76,000 business refunds totaling $363 million, averaging $917 and $4,776, respectively. Over 1.3 million California Earned Income Tax Credits were claimed, and $292 million in credits/refunds were allowed.
The Franchise Tax Board (FTB) recently published its updated list of California's top 500 tax debtors, comprising both individuals and businesses that now collectively owe the state more than $505 million in income tax. Since October 2007, this list is updated twice annually. Taxpayers who receive notice of the FTB's intent to include them on the list and then make arrangements to pay their tax debt are removed from the publication.
The California Tax Education Council (CTEC) began a public awareness campaign for the 2018 tax filing season targeting "ghost tax preparers," meaning paid tax professionals who do not sign the returns they prepare. The Council reminds taxpayers that "tax preparers who charge a fee to do your taxes, but never sign your tax return are breaking the law." Hiring a ghost preparer could lead to tax refund fraud, penalties, or additional taxes. For more information from CTEC on this issue, click here.
In September, 2017, the Internal Revenue Service (IRS) issued a directive to tax examiners concerning research expenditures for business entity taxpayers with assets of at least $10 million and that follow Generally Accepted Accounting Principles (GAAP) to prepare certified financial statements and records for research costs following ASC 730. Taxpayers are provided a federal credit for increasing research activities under IRC Section 41; the state of California has decided to follow the same directive for California business entity taxpayers.
The California Franchise Tax Board (FTB) has updated certain aspects of tax return filing starting with returns for tax year 2017. The standard deduction for taxpayers filing as single increased to $4,236; for taxpayers who are married filing jointly, the new standard deduction is $8,472. Personal exemptions were also raised to $114 and $228, respectively.
The California Franchise Tax Board (FTB) recently announced that tax relief may be available to certain California taxpayers impacted by the recent wildfires, floods, and mudslides. Specifically, the deadlines for individual income tax returns normally due on April 17, 2018, and quarterly estimated tax payments normally due on January 16, 2018, have been extended to April 30, 2018. More information on how to claim a disaster loss with the FTB is available here.
If you are a tax professional, take note of recent changes that the Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) have made to their power of attorney forms that may affect your ability to access client information. The IRS form, found here, has expanded section 5a to include a box you must check if you have intermediaries access client transcripts for you. The FTB has completely rehauled its power of attorney form system --- there is a new form to use for individuals, a separate form for business entities, and a third form to use when you want to revoke your power of attorney. To learn more about the various the changes to the FTB forms, click here.