FTB Middle Class Tax Relief Payments - Are They Taxable?

 

Did you receive the Middle Class Tax Refund (MCTR) from the Franchise Tax Board (FTB) yet?  If not, you should call the Money Network Customer Service number at (800) 542-9332, to report that you have not yet received any payment.  Representatives are available Monday through Friday, 8 a.m. to 5 p.m. (PST).

Also, you may receive a Form 1099-MISC in the mail from the FTB.  If you received more than $600 for the MCTR, the FTB is issuing this form to taxpayers.  It is NOT taxable on the California tax return; however, we do not yet know if it will be taxed on the federal level.  The Internal Revenue Service (IRS) has not yet issued guidance on these payments.  There are many ways to interpret the tax code as to what type of payment this is.  

We are waiting for the IRS to issue guidance on this matter.  In the meantime, keep this form available for tax time.

As always, if you have questions, please call us anytime.

See you soon!

CALIFORNIA DISASTER RELIEF: TAX DEADLINE EXTENDED TO MAY 15, 2023

 

Tax Deadline Extended

California storm victims now have until May 15, 2023 to file taxes.  

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) This means that individuals and households that reside or have a business in Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo and Yuba counties qualify for tax relief. 

Other areas added later to the disaster area will also qualify for the same relief. 

Please visit the IRS website for more information:

https://www.irs.gov/newsroom/irs-california-storm-victims-qualify-for-tax-relief-april-18-deadline-other-dates-extended-to-may-15

Happy New Year 2023

 Happy New Year!  We hope your holidays were festive and joyous!  We are ready for the new tax season that is already upon us!  

Get your tax documents together and get ready to file taxes in the coming weeks.  Remember, you may not receive your W2 or other tax documents until the end of January, which is when employers and other reporting agents are required to provide you with your tax documents.  Some brokerage account 1099-Bs may not be mailed until February - March 2023, depending on the firm. It is best practice to wait until all of your documents arrive in order to avoid having to file an amendment.

What’s New for 2022

Tax Brackets and Rates

The income tax brackets are increasing to approximately 3.9%, due to inflation.  The 2022 tax brackets are shown in the diagram below.

Key Tax Code Changes:

·      Increased teacher deduction.  The deduction for classroom supplies has increased to $300.

·      Child tax credit rollback.  The advance child tax credit now disappears, and the current credit rolls back to $2,000 per child.

·      Dependent care credit rollback.  The maximum qualified childcare expense for 2022 has been reduced to $3,000 for one child and $6,000 for two or more children. 

·      100% meal deductibility.  Previously, businesses could only deduct 50% of their meal expenses.  To help restaurants recover from the pandemic, businesses may now deduct 100% of meal expenses.

·      Reporting digital payments.  If you receive more than $600 in digital payments for your business, you may be issued a Form 1099-K in January.  This includes Venmo and digital ticket resellers.

·      Virtual currency tracking.  Brokers are required by the IRS to report cryptocurrency transactions beginning in 2023.  Many firms are implementing the new reporting requirements in 2022.

·      Mortgage insurance premiums.  Mortgage insurance premiums are no longer deductible in 2022.  The 2017 Tax Cuts and Jobs Act eliminated this deduction, but Congress later reinstated it.  It expired in December 2021.

·      Charitable giving deduction.  The deduction for charitable giving for taxpayers who do not itemize on their return is no longer available in 2022.  Congress created a temporary deduction through 2021 for charitable giving.

Charitable contributions may be deducted on your tax return if you itemize deductions, and all qualified deductions exceed $12,950 for single filers and $25,900 for married filers.

 

Schedule your tax appointment soon! Call or email for an appointment.  We look forward to seeing you soon!

2023 Key Tax Filing Updates: E-File Opens January 23, 2023

 

Happy New Year!  We hope that your holidays were filled with joy and happiness!

The Internal Revenue Service (IRS)  will begin processing tax returns electronically on January 23, 2023.  There are no anticipated delays for refunds this year since the pandemic has passed.

Here are some key dates for the current filing season:

January 3:  Start of tax season and first day to file a federal tax return via e-file or mailed-in paper returns.  IRS processes e-files beginning January 23.

January 17:  Final estimated tax payments are due.

January 23:  E-file begins - IRS begins accepting e-files in the system that are on hold, and new e-files.

February 1:  Date by which you should receive W2, 1099s, etc.

February 17:  PATH Act lifts and refund dates are released for taxpayers who filed electronically and claimed the EITC or ACTC.

March 15:  S Corporations and Partnership returns are due.

April 18:  Tax deadline.  FBAR forms due.  Last day to make IRA contributions for tax year 2022.

May 15:  Non-Profit organization tax returns due.

June 15:  US citizens or resident aliens living abroad tax deadline.  NOTE:  If a tax liability is expected, tax payment is required by April 18, or file an Installment Agreement Request with the IRS.

October 18:  Final filing date for approved extensions for personal and Corporate tax returns.