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.
The California Secretary of State recently launched a new online portal, cannabizfile, for those interested in establishing a cannabis-related business. You will find information on topics including registering your business, trademark, or service mark; searching for business records; licensing; and registering and paying taxes with various state agencies.
The California Franchise Tax Board (FTB) released highlights from the 2017 filing season in its most recent newsletter. The number of personal income tax returns filed has increased 1 percent since the last filing year, and business entity returns filed has increased by 3.4 percent. The FTB issued over 12 million personal refunds for the 2017 season, totaling $12.6 billion, and over 165,000 business refunds, totaling $837 million.
The California Franchise Tax Board (FTB) issued Legal Ruling 2017-02 on October 16, 2017, concerning the state filing requirements of certain nonresident aliens with respect to foreign financial assets.
On September 25, 2017, Governor Brown signed S.B. 813 into law, which, effective January 1, 2018, expands the existing California state voluntary disclosure program to include out-of-state trusts with California beneficiaries and non-resident partners. Such taxpayers will now be eligible to use the voluntary disclosure program to bring non-California trusts into compliance with California state tax laws. In addition, the Franchise Tax Board (FTB) may waive late-filing penalties for certain types of entities and returns under the program.
The California Franchise Tax Board (FTB) issued Chief Counsel Ruling 2017-01 on August 2, 2017, regarding market-based sourcing rules for performance of "non-marketing" services. Where a subcontractor performed administrative or non-marketing business services for a health plan client, the members or sponsors of the health plan are not considered the direct customers of that subcontractor, but rather only the health plan entity.
The Franchise Tax Board has updated its cost recovery fees, which are assessed against individuals and business entities when they fail to file tax returns upon demand or fail to pay their delinquent taxes. The filing enforcement fee for individuals and most entities will be $84, and the collection fee will be $287. For corporations and LLC's treated as corporations, the filing enforcement fee will be $85 and the collection fee $374.
Remember: The California Franchise Tax Board (FTB) changed the tax return due dates for returns filed by business entities. The original return date is now April 15 for calendar-year filers (one month later than it used to be), and the 15th day of the 4th month following the close of the taxable year for fiscal-year filers. The extended due dates remain unchanged.