51 cents per mile for business miles driven19 cents per mile for medical or moving purposes and
14 cents per mile driven in service of charitable organizations.
California conforms to these rates
Rich Are Targeted in Audit Offensive
The Internal Revenue Service is stepping up examinations of wealthier taxpayers as part of a multi-year effort to crack down on tax avoidance.
According to the agency's latest statistical report for the fiscal year ended September 30, 2010, the percentage of taxpayers who were audited increased in every category of adjusted gross income above $500,000, compared with a year earlier.
The biggest jumps came at the top of the income ladder. About 18% of Americans earning at least $10 million were audited in fiscal year 2010, up from 11% in fiscal 2009. For those earning $500,000 to $1 million, the audit rate rose from 2.8% to 3.4%
The "Kiddie" Tax
Children up to age 23 often owe tax at their parent's rate on investment income over $1,900. Information from the parent(s) return is required to complete the child's return. See IRS Publication 929 for more information
California State Use Tax Requirement
Many California businesses that do not currently hold a seller's permit must register with the California State Board of Equalization (the "BOE") and report and pay, by April 15th, any use tax due from purchases made in the preceding year.
Use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales.
If you purchased property that would have been subject to sales tax if purchased in a local store, it is likely subject to use tax.
The BOE has been sending letters to taxpayers, informing them of the new registration requirement. You may receive one of those letters, and if so, contact us so we can help you with your registration requirement.
Reports of Foreign Bank Accounts
U.S. taxpayers are required to report their worldwide income; that is, income from both US and foreign sources. In addition, taxpayers who have an interest in, or signature or other authority over, a financial account in a foreign country are required to file Form TD F 90-22.1, Report of Foreign Bank account and Financial Accounts ("FBAR") if the total value of all such financial accounts exceeds $10,000 at any time during the calendar year. The FBAR is not filed with your tax return. Instead, it is filed with the Department of Treasury in Detroit, Michigan, no later than June 30 of the year following the calendar year reported.
Failure to report income in foreign bank accounts or to file the FBAR carries serious consequences, including large monetary penalties and, in some cases, criminal penalties.
If you have foreign bank accounts and are unsure whether you are required to file the FBAR, we would be happy to review your portfolio and advise you.
President Signs Repeal of Expanded 1099 Requirements
In mid-April, President Obama signed in law the "Comprehensive 1099 Taxpayer Protection and repayment of Exchange Subsidy Overpayment Act of 2011." You've got to love what they name these bills in Congress!
In any event, the repeal means that 1099 reporting rules continue unchanged and requirements for landlords and others to issue 1099s have been voided.
Privacy Requirements
Many of you request that we provide copies of tax returns we file for you to banks, loan brokers or other financial organizations. Please note that, due to Federal privacy guidelines, we are not allowed to provide information to 3rd parties without a formal authorization with an original signature. Therefore, we usually honor your requests by providing the tax return copies to you directly so that you can forward the information on to the 3rd party directly.
Note also that we do not charge a fee for providing electronic copies of your tax returns, but during our busy tax filing season, it often takes 1 business day before you will receive a link to a secure portal which will provide you with the information you have requested.
California State Reports on Median Income
The California statewide median income for all personal income tax returns decreased to $34,079 in 2009 - that's a 5.1% decrease below levels in 2008, while the median income listed on joint returns decreased to $65,025 in 2009, 5.7% below 2008 according to statistics released by the Franchise Tax Board.
California taxpayers filed 15.3 million returns in 2009 reporting over 1.08 trillion in adjusted gross income.
IRS Launches the IRS2Go App
The Internal Revenue Service has decided cellphones are here to stay - they've unveiled IRS2Go, the first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.
Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace.
Mandatory California E-Pay
Beginning January1, 2009, individuals who make an estiamted tax payment or extension payment greater than $20,000 for a taxable year beginning on or after January 1, 2009, must remit all subsequent payments electronically. Once this threshold is met, all future payments, regardiless of type, amount, or tax year must be remitted electronically. The mandatory e-pay requirement is also met when a taxpayer has a tax liability on an original return greater than $80,000 for a taxable year beginning on or after January 1, 2009.
California had not been enforcing the rules outlined above but, starting January 1, 2011, they commenced assessment of penalties of 1% of any payments not made electronically. Visit the Web Pay section of the State's website, at
Don't be assessed the penalty - pay electronically!
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