California Self-Compliance Letters for Car and Truck Expenses

A self-compliance pilot project initiated by the FTB's audit unit to verify car and truck expenses claimed on taxpayers' Schedule Cs filed with their personal income tax returns indicated that taxpayers incorrectly reported their car and truck expenses on more than 80% of returns selected. Although taxpayers can deduct expenses incurred while driving from their homes to a client's place of business while conducting business or between one place of business and another place of business if they are business-related, taxpayers can not deduct transportation expenses incurred between their homes and their business or regular place of work, as those are personal commuting expenses. Under the pilot project, the FTB sent self-compliance letters to taxpayers who claimed the car and truck expense. The letters included FAQs, the applicable law, and a simplified auto expense worksheet(s) for taxpayers to determine the allowable amount of their car and truck expense deductions. Due to the success of the project the FTB will consider the self-compliance letters for future use.

California Alimony Audit Project

he FTB is launching a new audit project to examine alimony payments deducted or received by California personal income taxpayers. The alimony audit project was initiated by a pilot study that indicated a 40% noncompliance rate, affecting multiple years in most cases.

Under federal law as incorporated by California, alimony payments are only deductible by the payer spouse if they are taxable to the recipient spouse. If the divorce or separation agreement designates such payments as not includable in the recipient's income, then the ex-spouse making the payments cannot deduct them. For example, property settlements are not includable as alimony income and are not deductible.

The FTB's analysis indicates that many taxpayers mistakenly consider all payments, including child support payments, made to their ex-spouses as deductible alimony payments. Conversely, many alimony recipients do not consider the payments from their ex-spouses as taxable income, and do not report it. Frequently, taxpayers fail to report income designated as "family support" by the divorce decree even though this type of support is considered taxable alimony income in most cases.

Under the new audit program, the FTB will mail a "Tax Liability Discrepancy" letter to the taxpayer if the FTB feels an audit adjustment is required rather than conducting a complete and time-consuming audit. If the taxpayer agrees with the FTB's audit determination, the taxpayer can pay the tax and interest, and be finished with the process. If the taxpayer disagrees, the FTB will request substantiation from the taxpayer supporting the taxpayer's position. The FTB will be developing a Frequently Asked Questions (FAQ) brochure, which will be included in the letters sent to taxpayers with alimony issues to help taxpayers understand the tax implications regarding alimony payments, as well as address penalties that may be imposed.

California AGI Phase-Out Limits for Traditional IRAs

Although California conforms to the federal Roth IRA AGI phase-out amounts, California does not conform to federal law that indexes the AGI phase-out limits for traditional IRAs beginning in 2008 for taxpayers who are active participants in their or their spouses' employer-sponsored retirement plan. Therefore, taxpayers participating in their or their spouses' employer-sponsored retirement plan could potentially have a different federal basis than state basis if they fall between the phase-out limits, and are contributing to a traditional IRA beginning in the 2008 taxable year.

For 2008, the phase-out range for federal purposes for single taxpayers is between $52,000 and $62,000, whereas the range for California personal income tax purposes remains between $50,000 and $60,000. The AGI phase-out range for joint federal returns is $83,000 to $103,000, as compared to the California phase-out range of between $75,000 and $85,000. Finally, for individuals who are not an active participant, but whose spouse is an active participant, the phase-out range is between $156,000 and $166,000 on the federal return and between $150,000 and $160,000 on the California return.

Mejora tu Situación Económica

Ponte en Forma en el 2008

Elena Alejandro, Univision Online

Opina en los Foros de Univision

Con el año entrante uno se encuentra con una multitud de esperanzas, deseos y aspectos en la vida que quisiera mejorar. Cuando se trata de formular una resolución, o una meta para el año nuevo, la más popular sigue siendo perder peso. No es de extrañar, entonces, que el número de inscripciones a los gimnasios aumente precipitadamente durante los primeros dos meses del año. Pero lo que indudablemente también ocurre es que antes de que lleguen las fiestas de Pascuas, ya no se ve tanta gente. Lo que pasa es que a veces, la meta simplemente no es realista, o quizás no es tan clara como debería. No es lo mismo decir, “Quiero perder 10 libras”, que decir: Voy a dejar de comer dulces e iré al gimnasio por lo menos 3 veces a la semana.
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U.S. puts heat on lenders to freeze rates

WASHINGTON - The Bush administration raced against time Monday to wrap up an agreement designed to prevent a surge of mortgage foreclosures that many analysts fear could send the economy into recession.

Treasury Secretary Henry Paulson told a housing conference here he is working "aggressively and quickly" to persuade financial institutions to freeze interest rates on hundreds of thousands of "subprime" adjustable-rate mortgages held by marginally qualified buyers. Read on ->

Safekeeping Records Essential for Financial Wellbeing

Dec. 5, 2007 -- Protecting important family records from the ravages of fire and water damage could save a family heartache and possible financial difficulties should a natural disaster like a fire or earthquake occur.

That's why a fire- and waterproof safe is perhaps the most important gift you can give yourself, your family and your friends this holiday season, according to the California Society of CPAs.

"Losing your home in a fire is bad enough without the added burden of your vital records going up in smoke," says Mitch Freedman, CPA/PFS. He noted that even if documents survived a fire or an earthquake, they could be damaged by water from burst pipes or fire hoses. Read on ->

Para salvar a Citigroup y otros bancos, Bush va al rescate de los deudores hipotecarios

En horas más, el Gobierno estadounidense anunciará un plan de alivio del costo financiero de las hipotecas para intentar detener ejecuciones masivas que provocarían un gran descontento social e inevitable efecto en un electoral año 2008. Y básicamente ayudar a los bancos. Pero hasta ahora Wall Street se ha mostrado escéptico con el probable anuncio porque cree que la recesión es más fuerte.

CIUDAD DE BUENOS AIRES (Urgente24). El anuncio del secretario del Tesoro de USA, Henry Paulson, de que habrá un acuerdo en breve con la industria hipotecaria para congelar de forma temporal los tipos de interés de ciertas hipotecas de alto riesgo o "subprime", hasta ahora no sirvió para levantar el ánimo de los inversores.

Por el momento, se desconoce durante cuántos años se congelarían los tipos de interés según ese plan, cuyo objetivo es evitar una ola de ejecuciones hipotecarias en el país ante la dificultad de los propietarios a hacer frente al alza de las cuotas mensuales de sus hipotecas.

En teoría, el objetivo es auxiliar a 2 millones de hipotecas de alto riesgo que están por aumentar de un pago promedio de US$ 1.200 mensuales a US$ 1.550. Pero en la realidad es mejorar la situación de la banca estadounidense,

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U.S. puts heat on lenders to freeze rates

Hopes to avert foreclosure surge, recession

By William Neikirk | Tribune senior correspondent
December 4, 2007

WASHINGTON - The Bush administration raced against time Monday to wrap up an agreement designed to prevent a surge of mortgage foreclosures that many analysts fear could send the economy into recession.

Treasury Secretary Henry Paulson told a housing conference here he is working "aggressively and quickly" to persuade financial institutions to freeze interest rates on hundreds of thousands of "subprime" adjustable-rate mortgages held by marginally qualified buyers . . . Read on->

Millions of Tax Refunds Could Be Delayed

Dec. 4, 2007 (Associated Press) -- WASHINGTON - Silena Davis had counted on an early tax refund to pay for getting her teeth fixed. Now, because Congress has dawdled all year on a tax bill, she and millions of other early filers could have to wait extra weeks for refunds that last year averaged $2,291.

The Internal Revenue Service is looking hard at delaying the start of its filing season, set to kick off on Jan. 14, if Congress fails to pass legislation in the next two weeks. At issue is how to handle what could be a dramatic increase in the number of people facing a higher alternative minimum tax.

If there is a delay and it extends into mid-February, it would slow nearly 38 million refunds worth a total of about $87 billion, the IRS Oversight Board predicts.

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Demora de ley de impuestos atrasará devoluciones

Silena Davis estaba contando con que le llegara su devolución de impuestos para pagar por un arreglo dental. Ahora, como el Congreso se ha pasado el año demorando una ley de impuestos, tanto ella como millones de otras personas tendrán que esperar semanas enteras para recibir reembolsos que el año pasado fueron de un promedio de $2,291.

El Servicio de Rentas Internas está estudiando cuidadosamente posponer el inicio de la temporada de impuestos para que comience el 14 de enero si el Congreso no aprueba una ley al respecto en las próximas dos semanas. Lo que está en juego es cómo manejar lo que podría ser un drástico aumento en el número de personas que van a tener un impuesto mínimo alternativo (AMT). Continuar->

IRS considers delaying start of tax season

WASHINGTON - The Internal Revenue Service is looking hard at whether to delay the start of tax-filing season if Congress, in the next two weeks, doesn't pass a law exempting millions of people from the Alternative Minimum Tax.

If there is a delay and it extends into mid-February, it would slow the return of 32 million refunds worth a total of about $87 billion, the IRS Oversight Board predicts.

The board, an independent advisory group, told lawmakers last week that it is "gravely concerned about the serious risks" to the filing season if Congress does not make timely changes to the tax. They include more mistakes by both taxpayers and the IRS and more people failing to pay taxes because of uncertainty about what they owe. READ ON->

Ahora es cuando hay que comprar casa

Por JUAN F. JARAMILLO/Al Día

Es muy probable que ya hayas escuchado las noticias sobre la crisis del mercado de los préstamos hipotecarios que afecta a todo el país.

Y es también muy probable que te hayas preguntado si ahora es o no un buen momento para comprar una casa.

Agentes y corredores de bienes raíces, e incluso observadores del sector están de acuerdo en que ahora es el mejor momento para tomar la decisión de hacerlo, especialmente para aquellos que quieren comprar su primera vivienda en un rango entre 80,000 y 150,000 dólares.

"El mercado tiene una sobreoferta de propiedades y los compradores tienden a tomar una actitud expectante, lo que quiere decir que los precios van a ser muy negociables. Probablemente disminuirán o, al menos, no subirán", sostiene James P. Gaines, analista del Real Estate Center de la Universidad Texas A&M.
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Anti-Tax Advocate Charged With Evasion

An anti-tax advocate hid millions in income for himself and clients through an elaborate web of shell companies, federal prosecutors charged Wednesday in an 11-defendant indictment.

Bernard J. Bagdis, 58, a lawyer and tax preparer, was arrested after a six-year investigation that netted two doctors, an engineer, several executives and an older woman with a small cleaning service.

At one point, Bagdis agreed to help an undercover Internal Revenue Service agent hide $100,000 in cash so that it would not be taxed, officials said. Continue->

Ex-CPA Convicted of Not Paying Taxes

Nov. 1, 2007 (The Atlanta Journal-Constitution) -- Sherry Peel Jackson, a former IRS revenue agent and certified public accountant, told a federal jury Tuesday she was sure she did not have to file income tax returns.

But after less than 30 minutes of deliberations, the jury convicted Jackson of failing to file income tax returns from 2000 through 2004. The Stone Mountain woman faces a maximum of four years in prison. She will be sentenced early next year. Continue->