California Tax Law Changes
By Harold S. Small, J.D., CPA (inactive), AEP
Each year brings changes in the law that become effective January 1, or that receive some notoriety because of articles in the press. Here are some of the changes made in California that may be of interest to you.
1. The income tax returns that will be used in the future will require the inclusion of the Assessor Parcel Number for property where property tax deductions are to be taken on Schedule A. The position of the FTB is that some of the amounts billed and paid are not deductible and/or for those related to local benefits, they may need to be added to basis.
2. It appears that the credit for employer child care contributions may have sunseted on January 1, 2012. For those owning small businesses, check with your tax preparer to see if there was a last minute reprieve or whether this benefit continued into 2012.
3. California has a New Jobs Credit available to new businesses for all employees and to existing businesses who hire a new seasonal employee that works full-time for a portion of the year. While seasonal hiring may wait until later in the year, there could be tax savings opportunities available. The California New Jobs Credit provides a credit of up to $3,000 for each net increase in qualified full-time employees hired during the taxable year for qualified small businesses. For this new credit a small business is one that had 20 or fewer employees on the last day of the previous taxable year (i.e. December 31, 2011). There is a limit to the available credits and money may run out so be mindful of this limitation.
We hope that this information will be of assistance to you in your planning.
IRS CIRCULAR 230 DISCLOSURE: INTERNAL REVENUE SERVICE REGULATIONS GENERALLY PROVIDE THAT, FOR THE PURPOSE OF AVOIDING FEDERAL TAX PENALTIES, A TAXPAYER MAY RELY ON FORMAL WRITTEN ADVICE MEETING SPECIFIC REQUIREMENTS. TO ENSURE COMPLIANCE WITH THE IRS REQUIREMENTS THIS NOTICE INFORMS YOU THAT ANY FEDERAL TAX ADVICE CONTAINED IN THIS ARTICLE OR ANY OTHER ARTICLE OR COMMUNICATION ON THIS WEB SITE (INCLUDING ATTACHMENTS) DOES NOT MEET THOSE REQUIREMENTS. ACCORDINGLY, THE TAX ADVICE IS NOT INTENDED, WRITTEN OR PROVIDED TO BE USED, AND IT CANNOT BE USED FOR THE PURPOSE OF (i) AVOIDING FEDERAL TAX PENALTIES OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTER ADDRESSED ABOVE OR ON THIS WEB SITE.
THE FOREGOING CONCEPTS AND IDEAS ARE GENERAL STATEMENTS AND ARE INTENDED TO PROVIDE CONCEPTS FOR CONSIDERATION IN BUSINESS AND TAX PLANNING. CAREFUL CONSIDERATION NEEDS TO BE GIVEN BY THE READER REGARDING THE USE AND APPLICATION OF THE CONCEPTS. YOUR LEGAL AND TAX COUNSEL SHOULD BE CONSULTED BEFORE THE IMPLEMENTATION OF ANY OF THE IDEAS INDICATED ABOVE OR USE OF THE INFORMATION CONTAINED IN THIS ARTICLE. SHOULD YOU HAVE QUESTIONS REGARDING THIS MATTER, HAROLD S. SMALL, ESQ., CAN BE REACHED AT 12526 HIGH BLUFF DRIVE, SUITE 300 , SAN DIEGO , CALIFORNIA 92130 OR AT 858.759.4600.
© 2011 by Harold S. Small, J.D., CPA (inactive) , AEP