Collector Care 2012-2013 California Tax Preparation Tips

California Tax Tips 2013

It's that time of the year again! Collector Care is based out of California, hence why we have California tips on our blog. Feel free to submit any more useful tips in our comments section!

Online Account Access

Taxpayers can go to ftb.ca.gov to register and access their MyFTB Account to change their address, get information, such as estimated tax payments, balances due, state W-2 information, or FTB-issued 1099 forms. We suggest taxpayers use their online account information to avoid claiming the wrong amount of estimated tax payment amounts, which is the top error taxpayers make on their tax returns.

What tax credits are available for taxpayers to reduce their tax bill?

Personal Exemption Credit 

This year’s credit totals $104 for individuals and $208 for married couples and registered domestic partners. Blind individuals and senior individuals (65 years or older) receive $208 (double the individual amount.)

Dependent Exemption Credit

Families can reduce their tax bill by $321 for each dependent.

Renter’s Credit

Single renters can claim a $60 credit if their adjusted gross income is $36,337 or less. Married couples, registered domestic partners, or head of household filers can claim $120 if their adjusted gross income is $72,674 or less.

Federal Earned Income Tax Credit (EITC)

EITC is a federal incentive for low-income individuals and families. Taxpayers who earn less than $50,270 may qualify for a refundable credit that can total up to $5,891.
“Refundable” means that taxpayers do not need a tax liability to get a refund check from the government. For those who might qualify, go to irs.gov and search for EITC assistant. California has no comparable state credit.

What are the common errors taxpayers should avoid?

The top three common tax errors:

1. Claiming incorrect estimated tax payments.
2. Deducting the wrong amount for the standard or itemized deductions.
3. Selecting the wrong amount of tax from the tax table on paper tax returns.

To avoid these errors, we suggest taxpayers:

• Go to ftb.ca.gov and access their MyFTB Account to verify the amounts we have on record for their estimated tax payments, wage and withholding information, and current balance due.
• Accurately add and transfer their total deductions to the correct line of the tax return.
• Double-check that they transferred the correct amount of tax from the tax table.

What should taxpayers do if they cannot file by April 15?

No problem. All taxpayers get an automatic six-month filing extension to October 15. The extension is only for filing tax returns and not for payment of any taxes that may be due. Be sure to pay the total tax due by April 15 to avoid penalties and interest.

What if taxpayers owe and cannot pay?

First, taxpayers should always file on time and pay as much as they can with their tax return. This saves them money in penalties and interest. We realize that unforeseen events occur that prevent taxpayers from paying their taxes on time.
We generally approve monthly payment plan requests if the balance owed is $25,000 or less and can be paid within 60 months. We generally do not file liens on these taxpayer’s accounts.
Taxpayers can set up payment plans online at ftb.ca.gov and search for payment options.
New this season: Payment plans can be set up using our automated phone line at 800.689.4776. Payment plan information is available in both English and Spanish.
Taxpayers may pay taxes by credit card: Visa, Master Card, Discover/NOVUS, and American Express.

Website: Official Payments Corporation: officialpayments.com.
Telephone: 888.2PAY.TAX or 888.272.9829.

Service providers charge a convenience fee for this service based on the amount charged.

What should taxpayers do if they made an error on their tax return, forgot to claim a deduction, or received a late W-2?

Taxpayers can correct their California tax return by filing Form 540X, Amended Individual Income Tax Return. Amended tax returns take longer to process than original tax returns.
For simple math errors or missing documents, taxpayers generally do not need to file amended tax returns, as we typically correct math errors when we process tax returns. We will contact taxpayers about missing documents.

What should taxpayers do if they changed their address during the year?

Each year, the U.S. Post Office returns millions of dollars in refund checks to us as undeliverable. This is generally because taxpayers moved after they filed their taxes. The post office does not forward refund checks.
Notify us immediately of a change of address:
Web: Go to ftb.ca.gov to access their MyFTB Account and change their address online.
Telephone: 800.852.5711
Mail a completed FTB 3533, Change of Address, to:
FRANCHISE TAX BOARD
PO BOX 942840
SACRAMENTO CA 94240-0002

Your Client’s Concerns After Filing Their Tax Returns

As the end of filing season approaches, taxpayers contact us with questions or concerns they have after filing their tax return. The following information can help you:

When can my client expect their refund?

• e-file – Refunds from e-file returns are usually issued within seven to ten business days from the date the return is accepted. Your client can also request to have the refund directly deposited into a bank account usually within five to seven business days.
• Paper returns - Direct deposit of refunds for paper returns are deposited in six to eight weeks.

How can my client check their refund status?

Your client can check the status of their current year refunds online or call 800.852.5711 available in English and Spanish.

My client sent the check without the payment voucher.

We will cross reference and accept the check, but if this is the first time the taxpayer is filing the tax return, we might need to contact the taxpayer.

My client cannot pay what is owed on the tax return.

If your client is unable to pay the tax owed in full, the taxpayer can make a request for monthly payments.
However, interest accrues and an underpayment penalty may be charged on the tax not paid by April 15, 2013, even if the request for monthly payments is approved. To make monthly payments, complete form FTB 3567, Installment Agreement Request, online or mail it to the address on the form.

My client is due a refund for this year, but has a balance due from a prior year or a nontax debt being collected by us. Will my client get the refund?

No. All refunds are subject to intercept. Refunds from joint returns may be applied to the debts of either the taxpayer or spouse.

Collector Care 2013 Tax Preparation Checklist

Tax Preparation Checklist

If you are reading this, it's tax season! This is all current information as of April 1, 2012.

Each section has sub sections, feel free to print out and check off what you have or what you need. Need further assistance? We are happy to help you go through all of your paperwork and help you keep what you need. This is especially important for taxes.

Personal Information

• Your social security number
• Your spouse's full name and social security number
• Amount of any alimony paid and ex-spouse's social security number
• Add Your 2012, 2011, and 2010 tax return(s). Your Tax Professional can check them for accuracy

Other people who may belong on your return

• Dates of birth and social security numbers
• Childcare records (including the provider's ID number) if applicable
• Approximate income of other adults in your home (not spouse, if you're filing jointly)
• Form 8332, copies of your divorce decree, or other documents showing that your ex-spouse is releasing their right to claim a child to you

Education Payments

• Bills from the educational institution or anything else that itemizes what you paid or received loans for versus what was covered by scholarship or other financial aid
• Forms 1098-T and 1098-E, if you received them
• Scholarships and fellowships

Employee Information

• Forms W-2

Self-Employment Information

• Forms 1099-MISC, Schedules K-1, income records to verify amounts not reported on 1099s.
• Records of all expenses — check registers or credit card statements, and receipts
• Business-use asset information (cost, date placed in service, etc.) for depreciation
• Office in home information, if applicable

Vehicle Information

• Total miles driven for the year (or beginning/ending odometer readings)
• Total business miles driven for the year (other than commuting)
• Amount of parking and tolls paid
• If you want to claim actual expenses, receipts or totals for gas, oil, car washes, licenses, personal property tax, lease or interest expense, etc.

Rental Income

• Records of income and expenses
• Rental asset information (cost, date placed in service, etc.) for depreciation

Retirement Income

• Pension/IRA/annuity income (1099-R)
• Social security/RRB income (1099-SSA, RRB-1099)

Savings and Investments

• Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
• Income from sales of stock or other property (1099-B, 1099-S)
• Dates of acquisition and records of your cost or other basis in property you sold

Other Income

• Unemployment, state tax refund (1099-G)
• Gambling income (W-2G or records showing income, as well as expense records)
• Amount of any alimony received and ex-spouse's name
• Health care reimbursements (1099-SA or 1099-LTC)
• Jury duty records
• Hobby income and expenses
• Prizes and awards
• Other 1099

Itemizing Deductions

• Forms 1098 or other mortgage statements
• Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
• Real estate and personal property tax records
• Invoice showing amount of vehicle sales tax paid
• HUD statement showing closing date of home purchase
• Cash amounts donated to houses of worship, schools, other charitable organizations
• Records of non-cash charitable donations
• Amounts paid for healthcare insurance and to doctors, dentists, hospitals
• Amounts of miles driven for charitable or medical purposes
• Expenses related to your investments
• Amount paid for preparation of your 2010 tax return
• Employment-related expenses (dues, publications, tools, uniform cost and cleaning, travel)
• Job-hunting expenses

IRA Information

• Amount contributed for 2012 (and 2013, if applicable)
• Traditional IRA basis
• Value of IRAs on Dec. 31, 2012

If you were affected by a federally declared disaster

• City/county you lived/worked/had property in
• Records to support property losses (appraisal, clean up costs, etc.)
• Records of rebuilding/repair costs
• Insurance reimbursements/claims to be paid
• FEMA assistance information
• Check FEMA site to see if my county qualifies for individual assistance

Courtesy of H&R Block