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Archive for the ‘Calif’ Category

What won’t the PRC Rulers tax?

Posted by taxguru on January 13, 2019

As anyone knows, an effective parody has to have a strong foundation in real world true facts.  

An excellent comment on the situation in California is this recent piece from the extremely creative satire website, The Babylon Bee.

California Legislature Unveils Plan To Raise Taxes On Wildfires Until They Move Out Of State

As with all of their parody articles, this one is very concise and pithy, as Bill O’Reilly used to say.  Check out the full thing, but this paragraph does an excellent job of describing the very real and very dangerous mindset of the bozos in power in Sacramento.

"Just as we’ve done with various businesses and private individuals, we will levy ever-increasing taxes on the fires," he said proudly. "Once they realize they’re being taxed to death, they’ll move on to greener pastures like Texas or Arizona." Brown said the taxes will be earmarked for public funding and pensions, but quickly added the state will likely "blow through the cash" on crazy pet projects faster than they could bring it in.

[Update 12/13/18]: Proving once again that the PRC Rulers are themselves parodies of actual leaders, they have one-upped the Babylon Bee by proposing to tax cell phone texts.

California mulls tax on text messaging

So, the question is still a very valid one.  Is there anything that the crazies on the left won’t tax in order to steal more money for themselves?  If George Harrison were still around, he would have to add so many things to his TaxMan song that it would be twice as long.

 

[Update 12/20/18]: The Babylon Bee has another great parody that could very well come true, given the environmental wackos’ insane blaming of humans breathing out carbon dioxide for the imminent destruction of the planet.

California Considering Tax On Breathing

This article includes another prediction that has actually already come true as part of the Federal TCJA, with its deduction limit of $10,000 for State and Local Taxes (SALT) on the 2018 Schedule A.

…California had unveiled a tax on taxes, charging residents a luxury tax for the privilege of being taxed.

[Update 1/13/19]:  This is not a parody, but one more indicator of California’s continuing slide into total socialism

Gavin Newsom’s budget calls for new tax on drinking water

Posted in Calif, parody, taxes | Comments Off on What won’t the PRC Rulers tax?

Calif FTB threatening audits…

Posted by taxguru on August 3, 2015

In its latest Tax News newsletter, the California Franchise Tax Board stated the following.

We noticed a large number of taxpayers who claim unreimbursed employee business expenses (EBE) on Schedule A that appear questionable.

In August, we will increase the number of audits for taxpayers deducting EBE on personal income tax returns, starting with the 2011 and 2012 tax years.

There appears to be a bit of scare strategy at work here.  Normally, FTB doesn’t do many actual audits of items on income tax returns.  Instead, as with most other States, they just let IRS do the bulk of the examination work and then use the IRS results to make changes to the State tax returns.   They are explicitly encouraging people who don’t think they will survive an examination to file amended tax returns and do their job for them.

Your clients can file amended tax return(s) if their business expenses do not qualify.

Notice that they mention going back to 2011, highlighting the fact that the Statute of Limitations for California income tax returns has long been Four (4) years, compared to the long-standing Three (3) years with IRS.

Also, notice that the focus of this concern is just deductions on Schedule A of individual income tax returns.  It doesn’t mention any problems with expenses claimed on business forms (i.e. Schedule C) or corporate tax returns (hint hint).

Posted in audits, Calif | Comments Off on Calif FTB threatening audits…

Another parody that could come true?

Posted by taxguru on January 12, 2015

I have always been a  big fan of parody and satire when it’s done well.  The Onion and National Report have been turning out great satire on the web.  I can’t resist the urge to post the tax related ones that may soon become reality, such as this one from National Report.

California Withholding Tax Refunds Due in 2015 Until 2016 –  This is so effective because it piggybacks on tactics that the rulers of the PRC have actually used in previous years, delaying tax refund payments in order to help the State’s cash flow.  It has also long been true that the FTB is much more ruthless and aggressive than the IRS when it comes to collecting taxes that it believes are owed.  It is not a parody that the FTB actually helps train IRS agents on how to more effectively squeeze money out of people.

 

Posted in Calif, humor | Comments Off on Another parody that could come true?

2014 Calif Tax Rates

Posted by taxguru on September 18, 2014

Spidell has a handy two page pdf of the new inflation adjusted tax rate schedules for California income taxes. 

 

 

Posted in Calif | Comments Off on 2014 Calif Tax Rates

1031 Exchanges out of California

Posted by taxguru on December 9, 2013

As I discussed previously, the PRC is trying to keep tabs on real estate investors who use IRC Section 1031 to defer their profits to non-California property.

While all of the forms and procedures are not yet established, the FTB just posted this update on how this is supposed to work, effective for disposals after 12/31/2013.

 

Posted in 1031, Calif, CapGains | Comments Off on 1031 Exchanges out of California

For 1031s out of California

Posted by taxguru on November 1, 2013

Under IRC Section 1031, it has always been allowable to defer gains from the sale of property in one state by replacing it with like kind property in another state.  However, if that replacement property is ever sold, the gain that was deferred from the first state is supposed to be reported and paid to that state.  That has pretty much been handled on the honor system for sellers to voluntarily report to the previous state.

It appears that the rulers in Sacramento don’t much trust this honor system for former investors in California property and are now instituting new requirements for those sellers to keep in touch with the FTB every year until the replacement property is sold. Because the replacement property may be exchanged for another like kind property, and on and on, this could go on for several decades. In fact with the popular “swap til you drop” technique of investing, it is possible that there will never even be a taxable sale of the replacement property.

 As explained in this article from the most recent FTB newsletter, this rule takes effect as of January 1, 2014; but they are still working out the details as to the exact forms and procedures for the annual notification filing. Since this situation applies to many of our clients, who disposed of California property and reinvested into other states, this is something that I will be dealing with for a long time to come; so I will be commenting on any interesting new developments as I learn of them.

TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!
 

 

Posted in 1031, Calif | Comments Off on For 1031s out of California

2013 California Inflation Adjustments

Posted by taxguru on August 23, 2013

Unlike the IRS, where the inflation adjustments to the tax brackets and other figures are announced before the beginning of the next year, the Calif FTB doesn’t announce theirs until the year is almost over.

They have just released their inflation adjustments for the 2013 tax rates and figures on their website, based on their calculation of the rate of inflation being 1.7% between 7/1/12 and 6/30/13.

For those comparing taxes between states, the summary at the top of this page is handy:

 

Corporate tax rates

Entity type

Tax rate
Corporations other than banks and financials 8.84%
Banks and financials 10.84%
Alternative Minimum Tax (AMT) rate 6.65%
S corporation rate 1.5%
S corporation bank and financial rate 3.5%

Individual tax rates

  • The maximum rate for individuals is 12.3%
  • The AMT rate for individuals is 7%
  • The Mental Health Services Tax Rate is 1% for taxable income in excess of $1,000,000.

 

TaxCoach Software: Are you giving your clients what they really want?

 

Posted in Calif | Comments Off on 2013 California Inflation Adjustments

Luring Tax Refugees

Posted by taxguru on February 11, 2013

This should be like shooting fish in a barrel for Gov. Perry.

Texas Trumps Governor Moonbeam. Governor Perry goes on a recruiting tour in California.

From BlogComix4(10/17/12- )

Follow-Up:  Rick Perry declares victory in California trip

 

Posted in Calif, Texas | Comments Off on Luring Tax Refugees

Posted by taxguru on February 4, 2013

From Argus Hamilton:

California demographers said Hispanics will pass whites as the state’s majority race by late this year. It’s absolutely chaotic. The headwinds from the number of Mexicans coming into California for amnesty are mixing with the tailwinds from the number of white people going out of California over tax hikes and creating funnel clouds over Interstate 15.

Posted in Calif, humor | Comments Off on

Posted by taxguru on January 23, 2013

California residents, businesses consider bailing on Golden State over taxes –  It’s not just the high taxes that motivated us to leave the PRC 20 years ago. It’s also the never ending micromanagement of every part of everyone’s life by the rulers in Sacramento that was unbearable for us. 

 

Court Holds IRS Can Get Key Tax Records Even Held by Your Lawyer – As I’ve long pointed out, the basic protections we have under the Constitution are null and void when it comes to tax matters.  This is just one of dozens of examples of this.

 

 

Posted in Calif | Comments Off on