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It's fall!  The mornings are darker and cooler.  Time to finish up all those extended individual tax returns and start thinking about tax planning!

Not much is scarier than Halloween aside from unexpected tax bills.  After you get over the scares from Halloween, feel free to contact our office for a tax planning check up. 
 

AB 150 $10,000 SALT Workaround

California recently passed AB 150 which offers a workaround for the $10,000 federal cap on individual's deductions for state and local taxes. This new law is an elective entity level tax available to qualifying pass-through entities. An eligible entity that elects in to the tax will pay a 9.3% tax on its taxable income and the pass-through owners then receive a tax credit to be applied to their personal California income tax. For federal income tax purposes, the entity level tax reduces the pass-through’s net income, which in turn reduces the net income of the pass-through owners on their federal income tax returns.

This could make a big impact for certain taxpayers.  The FTB is still working out all the details but please contact our office after October 15th if you are interested in taking advantage of this new option.

Golden State Stimulus Payments

On September 17, California distributed $600 stimulus payments to taxpayers who qualified and had filed their 2020 return.  Some client has been confused by these payments which came with a description "FTB-GSS" on their bank statement.  Click here to read more about who qualifies.

Individual Returns Due!

Extended 2020 Individual tax returns are due October 15th.  If you have been waiting to pay your liability or make your retirement plan contribution, now is the time to do that.



New Text number

We have a new number for sending texts to our office staff.  Please update your records with the new text only number - (530) 519-2477.  Please continue to use our office number for voice calls.

LLC Exemption in First Year

Legislation enacted last year exempts LLCs from paying the $800 annual tax during their first year if they organize or register with the California Secretary of State’s Office during 2021 through 2023. Prior to 2021, the first-year exemption was only available to corporations. 

Recently the FTB started sending notices that say that all LLCs doing business in California or organized or registered with the Secretary of State are required to pay an $800 annual tax to the FTB and the notice makes no reference to the first-year exemption. Many taxpayers are receiving this information from the FTB and feel that they have to pay the $800 for the first year.

Our continuing education provider, Spidell, has raised this issue with the FTB and the FTB said they’ll modify the notice. If you organized during 2021 and sent a check after receiving this notice from the FTB, you should file a refund claim.

FTB Power of Attorney (POA) Letters

Beginning in September 2021, the FTB will send to all taxpayers that have an active POA declaration new Form FTB 3912, Power of Attorney – Active Representatives on File. This letter provides a list of all active POA representative relationships on a taxpayer’s account.

Form FTB 3912 will keep taxpayers informed of their POA relationships, the level of online access (limited or full) each representative has in MyFTB, and the expiration date of the declaration.

Taxpayers should not return the Form FTB 3912 to the FTB for the purpose of revoking a POA. To revoke a POA, either the taxpayer or representative must take one of the following actions:

  • Log in to MyFTB to view, edit, or revoke the POA declaration(s);
  • Call the FTB at (800) 852-5711 and reference the associated declaration ID number; or
  • Send the FTB a completed Form FTB 3520 RVK, Power of Attorney Declaration Revocation.

2021 Main Street Hiring Credit

Businesses that want to claim the California 2021 Main Street Hiring Credit must reserve the credit with the CDTFA starting November 1, 2021, and ending November 30, 2021 (or earlier if the $70 million credit allocation cap is reached prior to November 30 - it's first come, first served).  Businesses with 500 or fewer employees that had a 20% decline in gross receipts when comparing 2020 to 2019 can claim up to $1,000 per net increase in qualified employees. The CDTFA and FTB have also provided information regarding the credit on their websites at:

www.cdtfa.ca.gov/industry/main-street-small-business-tax-credit-II-AB150.htm#Overview

www.ftb.ca.gov/file/business/credits/main-street-small-business-tax-credit-II.html

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