California Tax

FTB Legislative Update

Written by Patrick Islip, CPA

Assembly Bills

· AB 36 (Perea, Blumenfield & Padilla) Medical Care Expense Exclusion / Deduction For Children Under 27 - Amended 02/18/11
· AB 233 (Hall) California YMCA Youth And Government Fund - Amended 03/15/11
· AB 318 (Skinner) Employer Tax Credits/Information Reporting/FTB Compile Information Received & Submit To State Chief Information Officer For Publication On The Reporting Transparency In Government Internet Web Site - Introduced 02/09/11

Senate Bills

· SB 116 (De Leon) Business Income Apportionment/Repeal Elective Single Sales Factor & Add Mandatory Single Sales Factor- Amended 02/23/11
· SB 120 (Anderson) State Agencies Accept Registered Warrants Issued By Controller For Payment Of Any State Obligation- Amended 03/14/11

Tracking this so you don't have to

Islip + Company CPAs offer personalized service to help you with these issues.

Since 1958, we have successfully worked with the IRS and the FTB helping our clients stay in compliance of the tax laws and pay the minimum amount due.

With Offices in Sacramento and Auburn as well as internet we are able to deliver premium service nearly anywhere...without premium pricing.

"It's not just about the numbers... it's what's behind the numbers that counts".

Give us a call or send us an email 916-488-1900 Sacramento, 530-746-3020 Auburn or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

California Provides Free Completed Tax Returns for Many

Written by Patrick Islip, CPA

State Provides Free Completed Tax Returns for Many

Nearly 2 million California taxpayers can check online to see if the state has completed their tax returns for them, according to the Franchise Tax Board (FTB).

“ReadyReturn provides many taxpayers with a filled-in or completed tax return that is ready for review and immediate filing,” said State Controller and FTB Chair John Chiang.

ReadyReturn reduces the tax-filing burden for those with simple tax returns by using existing wage records to complete their returns. Taxpayers can accept the tax return as presented, change any information on the return, or disregard it for another filing method.

Taxpayers can check to see if they qualify by visiting FTB’s website at ftb.ca.gov and clicking on ReadyReturn. All that is needed is a name and social security number.

Taxpayers will qualify who last year:

· Earned wages from only one employer.

· Filed either as single or head of household.

· Took the standard deduction.

· Claimed no more than five dependents.

· Taxpayers who are renters and who can be claimed as a dependent are also eligible.

Islip + Company CPAs offer personalized service to help you with these issues.

Since 1958, we have successfully worked with the IRS and the FTB helping our clients stay in compliance of the tax laws and pay the minimum amount due.

With Offices in Sacramento and Auburn as well as internet we are able to deliver premium service nearly anywhere...without premium pricing.

"It's not just about the numbers... it's what's behind the numbers that counts".

Give us a call or send us an email 916-488-1900 Sacramento, 530-746-3020 Auburn or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Taxpayers who married, entered into a registered domestic partnership (RDP), had a child, received added income, or qualify for a tax credit, can easily update their ReadyReturn online. Taxpayers can preview the ReadyReturn experience from FTB’s website. FTB produced a short ReadyReturn video describing how easy filing a ReadyReturn is.

For those who don’t qualify for ReadyReturn, FTB offers CalFile; a free e-file program for more complicated tax filings.It is a quick online process that takes about 15-30 minutes to complete.With CalFile, the taxpayer types in their tax information and e-files the return from FTB’s website.More than 6.4 million taxpayers can use CalFile. FTB also produced a short video describing the ease of using CalFile.

Taxpayers can also check FTB’s website for a listing of free or fee-based e-file services provided by commercial businesses.

Last year nearly 75 percent of all personal income tax returns were e-filed. Key benefits of e-file are that tax returns are more accurate; taxpayers get confirmation that FTB received their return, and the state saves paper-processing costs. Taxpayers who file online and have their refunds issued by direct deposit often get refunds within one week.Paper-filed returns take longer, up to six-eight weeks depending on the time of year the return is filed.

California Tax News March 2011

Written by Auburn CA Tax Helper CPA

New Field on Your Tax Return

New this year on the personal income tax return, we added a date of birth field for the taxpayer and the taxpayer’s spouse/RDP. / more+

Assessing the Mandatory E-pay Penalty

Starting January 1, 2011, we began enforcing the mandatory e-pay penalty. / more+

Islip + Company CPAs offer personalized service to help you with these issues. Since 1958, we have successfully worked with the IRS and the FTB helping our clients stay in compliance of the tax laws and pay the minimum amount due. With Offices in Sacramento and Auburn as well as internet we are able to deliver premium service nearly anywhere...without premium pricing. "It's not just about the numbers... it's what's behind the numbers that counts". Give us a call or send us an email 916-488-1900 Sacramento, 530-746-3020 Auburn or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Attach CA Schedule K-1s to avoid Erroneous Contacts to Your Partners, Members, and Shareholders

We are concerned about what we call "erroneous contacts"; sending notification or correction letters when we do not have to. / more+

Top 10 Errors

Just in time for the filing season crunch, we offer the Top 10 Personal Income Tax and Business Entity errors that delay return processing in 2010. / more+

Head of Household Guidelines

Some of your clients may inquire about claiming the head of household filing status. / more+

Available Now: Free California Source Income Withholding Webinar

We will host a free California source income withholding webinar in March 2011. / more+

Web Pay for Businesses – The Fast and Convenient Way to Make Payments

Web Pay for businesses is a fast and convenient way for your business clients (corporations, partnerships, and LLCs) to make payments to us. / more+

Your 24-Hour FTB

It’s now tax season and working 9 to 5 is just a memory. It seems that you get those pesky questions after our phone lines close or in some cases even before they are open. / more+

Small Business

Make Sure LLCs Classified as a Partnership Use the Correct California Forms

We are seeing some limited liability companies (LLCs) classified as partnerships filing the incorrect forms. This causes confusion, processing delays, and potential penalties that can be avoided. / more+

Ask the Advocate

Should California Have a Stand-Alone Return?

On December 2, 2010, we held the Taxpayers’ Bill of Rights Hearing and we received a lot of good feedback as well as comments and suggestions on how we could improve our services. This month, I would like to share one of the suggestions received and our response to it. / more+

Event Calendar

As part of education and outreach to our tax professional community, we participate in many different presentations and fairs. We provided this calendar to show the events we are attending. / more+

Inside FTB

Take a look at the changes happening here at FTB. / more+

Criminal Corner

Our monthly summary on bringing tax criminals to justice, and closing the tax gap one case at a time. / more+

Big Business

Doing Business in California

California defines "doing business" as actively engaging in any transaction for the purpose of financial or pecuniary gain or profit. For taxable years beginning on or after January 1, 2011, the definition of doing business under R&TC 23101 is expanded. / more+

Roth Conversion Does California Comply?

Written by Auburn CA Tax Helper CPA

Roth IRA Conversion Frequently Asked Questions

California conforms to several recent federal law changes in the area of traditional and Roth IRAs. Each of these changes became effective January 1, 2010. One significant change now allows taxpayers using the married filing separate filing status to convert from a traditional IRA to a Roth IRA. Additionally, the limitation prohibiting Roth conversion to those reporting a modified adjusted gross income of $100,000 or more has been eliminated.

Lastly, a number of issues have arisen as a result of the change allowing taxpayers to make a Roth IRA conversion in 2010 and defer the recognition of income to 2011 and 2012. Below are answers to some of the most frequently asked questions.

Does California conform to this change?