Earned Income Tax Credit Chart

TAX INCENTIVE CA NEW JOBS CREDIT

As a small business owner you could use all the tax breaks you can get. California has one that is temporarily been put on the books that offers an incentive for hiring new full time employees.

In January 2009 the CA Revenue and Tax Code that allowed some small business owners business to be eligible for a special tax credit.  AB 697 aka New Jobs Credit has *$400,000,000 allocated to it.  As of today *$180,426,821, has been disbursed. This leaves room for companies to still utilize the credit.

The California Franchise Tax Board updates it’s site monthly to notify the public how much of the funds are still available. Once all the money is exhausted, the tax incentive will expire.

HOW TO QUALIFY?

·        Hire a new employee within your tax reported year that works at least 35 hours per week.

·        Each qualified full-time employee that is a salaried employee was paid compensation during the year for full-time employment within the meaning of Section 515 of the Labor Code.

·        Have 20 or fewer employees on the last day of the preceding taxable year.

·        There is an increase in full time employees, compared to the previous taxable year. For new California business this number would be zero.

HOW TO CLAIM THE CREDIT?

Claiming the credit is simple, when filing your personal return or business entity return, use CA FTB form 3527. If you have any further questions contact the CA Franchise Tax Board at 1-800-852-5711.

WHAT ARE THE RESTRICTIONS?

Companies whom employees fall into these categories do not qualify.

·         Certified as a qualified employee in an enterprise zone or targeted tax area.

·         Certified as a qualified disadvantaged individual in a manufacturing enhancement area.

·         Certified as a qualified disadvantaged individual or qualified displaced employee in a local agency military base recovery area.

·         An employee whose wages are included in calculating any other credit allowed.

*Source CA Franchise Tax Board

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Protect Yourself From Identity Theft (+playlist)

Are You a Victim of Identity Theft? (+playlist)

#1 DIRTY DOZEN TAX SCAM 2013

The IRS has reported identity theft as the #1 item on its dirty dozen tax scam list 2013. According to a report by Javelin Strategy & Research , a leading research and analyst company, 12 million people had their identities stolen in 2012. 

 To help alleviate the stresses of being or becoming a victim of identity theft, the IRS has made some changes. For starters they have dramatically increased their systems to catch fraud before affecting innocent victims. Increases  in staff and training, are  continuing effort to reduce the amount of money being sent out using fraudulent names, SSN & other information. Changes such as these have already led to 34 billion dollars in tax years 2011 & 2012, as well as multiple arrests of taxpayers and preparers. 

SIGNS TO LOOK FOR TO AVOID IDENTITY THEFT

 • Social Security number or other identifying information without your permission to commit fraud or other crimes.
 • An identity thief may also use another person’s identity to fraudulently file a tax return and claim a refund.
 • Someone using your name, social security number or other information to obtain employment.

 If you feel this has happened to you or anyone you know, take the steps below to report identity fraud to the IRS.

1. Fill out the Identity Theft Affidavit online. This form can be faxed or mailed & needs to be accompanied by an approved form of identification list on page w of the affidavit. 

2. If you have previously filed an affidavit and have not been contacted by the IRS call 1-800-908-4490.

 3. A police report will also be helpful if you were a victim of a robbery.

 It is also important to remember that the IRS will never contact you via email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. This is another way for thieves to steal your identity.

 For more information check out the IRS website at www.irs.gov.

SELLING YOUR HOME IN 2013? HERE ARE A FEW TAX TIPS FROM THE IRS

                                              VIDEO COURTESY OF THE IRS

If you’re selling your main home this summer or sometime this year, the IRS has some helpful tips for you. Even if you make a profit from the sale of your home, you may not have to report it as income.

Here are 10 tips from the IRS to keep in mind when selling your home.

1. If you sell your home at a gain, you may be able to exclude part or all of the profit from your income. This rule generally applies if you’ve owned and used the property as your main home for at least two out of the five years before the date of sale.

2. You normally can exclude up to $250,000 of the gain from your income ($500,000 on a joint return). This excluded gain is also not subject to the new Net Investment Income Tax, which is effective in 2013.

3. If you can exclude all of the gain, you probably don’t need to report the sale of your home on your tax return.

4. If you can’t exclude all of the gain, or you choose not to exclude it, you’ll need to report the sale of your home on your tax return. You’ll also have to report the sale if you received a Form 1099-S, Proceeds From Real Estate Transactions.

5. Use IRS e-file to prepare and file your 2013 tax return next year. E-file software will do most of the work for you. If you prepare a paper return, use the worksheets in Publication 523, Selling Your Home, to figure the gain (or loss) on the sale. The booklet also will help you determine how much of the gain you can exclude.

6. Generally, you can exclude a gain from the sale of only one main home per two-year period.

7. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is usually the one you live in most of the time.

8. Special rules may apply when you sell a home for which you received the first-time home buyer credit. See Publication 523 for details.

9. You cannot deduct a loss from the sale of your main home.

10. When you sell your home and move, be sure to update your address with the IRS and the U.S. Postal Service. File Form 8822, Change of Address, to notify the IRS.

For more information on this topic, see Publication 523. It’s available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

ALL INFORMATION PROVIDED IN THIS POST IS COURTESY OF THE IRS.

Webinar: Tax Filing Tips for New Business Owners