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Yearly Archives: 2009
California Franchise Tax Board Tax News August 2009
Registered Warrants Can Pay Your State Income Tax Bill
[The FTB will] accept California registered warrants (IOUs) as payment of current and past due personal and corporate tax obligations. / more+
State’s New Home Tax Credit Gone
[The FTB] stopped accepting applications for the new home tax credit at midnight, Thursday, July 2, 2009. / more+
FTB Provides Guidance for California Treatment of the Revised Texas Franchise Tax
On July 20, 2009, [the FTB] responded to the request for taxpayer guidance to determine the general eligibility for the Other State Tax Credit (OSTC) and the deductibility of the Revised Texas Franchise Tax (RTFT). / more+
Did You Know [the FTB works with others]?
[The FTB] came together with the Board of Equalization, Employment Development Department, and the IRS in a cooperative partnership called the Joint Tax Agency Communications Committee. / more+
15th Annual Tax Practitioner/IRS Town Hall Meetings
In September, [the FTB] will be working with the IRS and other state agencies at the 15th Annual Tax Practitioner/IRS Town Hall Meetings. / more+
Striking Gold in California
Striking Gold in California is an educational tool for small business owners that provide basic tax information from the Internal Revenue Service and the three California tax agencies, all in one place. / more+
Small Business
Converting a California LLC to a Corporation
[Do you want] to convert [your] limited liability company (LLC) to an S-Corporation and continue to have the profits and losses flow through to its members? Did you know that you can convert an LLC into an S-corporation by making an election? / more+
Systemic Issue Management System (SIMS) at Work
This month, I share the efforts we are taking by discussing an issue that was submitted to us and our response… / more+
Our monthly summary on bringing tax criminals to justice, and closing the tax gap one case at a time. / more+
Disclosing Deferred Intercompany Stock Account (DISA) Balances
FTB issued Notice 2009-5 on July 17, 2009, to extend the due date until October 15, 2009, for taxpayers to file a completed FTB Form 3726, Deferred Intercompany Stack Account (DISA) and Capital Gains Information. / more+
Seven Things Accountants Should Tell Their Clients
1) Hire the right accountant. Accountants have niches just like other professionals such as attorneys and doctors – if you were getting a divorce [god forbid], you would hire a family law attorney, not a tax attorney. Well, the same rule applies with your accountant. Your accountant should have experience working with clients in your particular industry -this will ensure that he or she understands and applies the correct tax laws.
2) Do some tax planning. No matter the size of your income, it never hurts to have your accountant look at your tax picture -BEFORE- yearend, estimate your income tax liability, and then suggest ways to mitigate the taxes. Once your tax liability is known, you can plan for how you will meet your obligation.
3) Always consult with your accountant before making large cash purchases. Sometimes life brings us a fabulous financial windfall… we sign a new contract, we get an unexpected bonus, we get $12 million for starring in a movie, or we win the “Showcase Showdown” on the Price is Right. Regardless of the windfall, before you spend all the money, you should check with your accountant to make sure that your windfall doesn’t include with it some income tax consequences.
4) Live within a budget. If you haven’t already, you should sit down with your accountant and figure out how much is available to spend. It’s just that simple. Don’t spend what you don’t have. Moreover, don’t spend what you “expect” to have before you have it.
5) Always, and I mean always, have money set aside for emergencies. How much to set aside is really relative to your income and your annual expenses. Generally, you should set aside enough money to pay at least 6 to 12 months of living expenses. Now – keep in mind – setting aside doesn’t mean investing it in some crazy volatile investment where you might lose it all. That would defeat the purpose of the emergency fund. No – put it somewhere safe like in a certificate of deposit. This will ensure that you have the cash available in the unlikely event that you do receive an unexpected tax bill or need to be represented before the IRS in the case of an audit.
6) Have a plan B. Planning for the possibility of a life-changing event is never fun. Nevertheless, people need to face that these things happen. Things such as the death of a spouse, the loss of a career, or a disabling illness will affect your ability to meet your financial obligations. Therefore, you should sit down with your accountant and your attorney to discuss your “what if” plans. A plan “B” can be as simple as having a life insurance policy or indicating who will raise your children in the event of your death.
7) Be involved. Okay so a celebrity [like Nick Cage] might not have the time to be completely “in the know” about every financial dealing. But frankly, that’s too bad. Ultimately, the taxpayer is responsible for what is reported on his or her tax return. Consider this, you are signing your return under penalty of perjury. Therefore, handing off all of your financial information – for someone else to deal with -without any personal oversight is a risky endeavor that just might cost you 6.2 million dollars and a tax lien on your house. Ouch!
Stacie's Tax Stuff 