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News & Articles list:
The Summer 2006
Tax Client Newsletter brings you up-to-date on a number of important tax law
changes for 2006. The United States Congress has been by, enacting four
separate tax acts in the last nine months, including the Tax Increase Prevention
and Reconciliation Act of 2005, TIPRA, signed into law on May 17, 2006.
Many important
tax law provisions went away (the process called sunset) on December 31, 2005.
The expiring provisions include the $250 adjustment to income known as the
Educator's Deduction, the Tuition and Fees Deduction, the deductibility of State
Sales Tax, the Research and Development Credit and the Saver's Credit. The
Pension Bill, thought by many to be a "trailer bill" to TIPRA, will generally
include most if not all of these expiring provisions. It is anticipated
that agreement on this bill will be reached and passage of the Act complete by
Labor Day.
Washington is
focused on the budget. Funding for the war, homeland security, Social
Security and Medicare, with the September 30 year-end looming for the
government, it is doubtful that the budget for next year will be forthcoming by
September 30, leaving the government to run what is called a "continuing
resolution".
With 2006 an
election year, many in Washington are concentrating on their election or the
election of their colleagues. With interest focused on campaigning, it is
almost certain that additional tax acts will be initiated after the November
election.
If you have any
questions concerning any of the information being reported on in this issue of
the Tax Client Newsletter, please contact my office to schedule an appointment.
2006 Tax
Legislation
The Increase
Prevention and Reconciliation Act of 2005 -- TIPRA -- (75 pages) includes $90
billion in targeted benefits and $20 billion in revenue "offsets". The
official name of the legislation carries a 2005 date because it represents a
carry-over from last year's budget. In this issue of the Tax Client
Newsletter we will review some of the most important changes for 2006.
Highlights
of the Legislation
Stock investors
are the broadest group of beneficiaries of the Act. The 15% favorable tax
rate on long-term capital gains and qualifying dividends is extended through
2010. The Joint Committee on Taxation estimates that the extension of the
15% tax rate on long-term capital gains will cost $40.8 billion over ten years.
TIPRA raises
the amount of income exempted from the Alternative Minimum Tax (AMT).
Taxpayers who would appear to benefit from this provision are those with incomes
in the $100,000 to $500,000 range. A hypothetical family of four with
$185,000 in income and $33,000 in itemized deductions would have faced an AMT of
$3,700 in 2006, however, with TIPRA the family will not be exposed to the AMT.
This is a one-year fix. Congress must address the AMT each and every ear.
With this fix, it is anticipated that no more taxpayers will be subject to the
AMT in 2006 then were subject to the AMT in 2005. Without this fix, an
additional 4.1 million taxpayers would be add to the roles of those taxpayers
subject to the AMT.
Interesting,
controversial and challenging the revenue offset in the bill concerns the
provision for ROTH IRAs. Beginning in 2010, taxpayers with incomes in
excess of $100,000 will also have the opportunity to convert their regular IRAs
to a ROTH IRA. Supporters of this measure noted that it will raise revenue
since taxpayers converting to a ROTH IRA must pay taxes based on the value at
the time of the conversion. It is estimated that ROTH IRA conversions will
yield $6.4 billion in revenue between 2010 and 2015.
Americans
living and working abroad will pay an estimated $2.1 billion in taxes over the
next decade. Expatriates will face tighter rules on how
employer-provided housing will be treated and they could face higher taxes on
investment income as a result of an adjustment in tax rates; calculating the
excluded foreign earned income as if taxable for the effective tax rate on
taxable income.
The Details
AMT Relief:
A One-Year Fix
The amount of
income exempted from the AMT is increased to $62,500 or married couples filing
jointly up from $58,000 in 2005. Without the tax measure, the exempted
amount was scheduled to increase to $45,000 in 2006. The exemption for
single filers will be raised to $42,500 for 2006 up from $40,250 in 2005.
TIPRA extends
through 2006 the provision allowing taxpayers to use non-refundable personal
credits to offset AMT liability. The credits include:
Capital
Gains and Dividends: Two-Year Extension
The Act extends
the current 15% tax rate on capital gains and qualifying dividends from the end
of 2008 through 2010. By extending the capital gains/dividends break
through 2010, the provisions are now aligned with the tax cuts enacted in the
Economic Growth and Tax Relief Reconciliation Act of 2001.
Musicians/Musical Compositions/Musical Composition Copyrights
Musicians
benefit from a special provision in the Act. TIPRA allows taxpayers to
elect to treat the sale or exchange of self-created musical compositions or
copyrights a the sale or exchange of a capital asset. This change is
effective for tax years beginning after the President signed the bill on May 17,
2006 and through 2010. The Act allows a taxpayer who puts any musical
composition or musical copyright into service to elect to use the 5-year
amortization period for certain expenses paid or incurred with respect to all
musical compositions and musical composition copyrights placed in service in
that tax year.
Small
Business Expenses
TIPRA continues
the special small business expensing under Code Section 179. The enhanced
small business thresholds contained in the American Jobs Creation Act of 2004
are extended through 2009. The maximum amount hat may be expensed is
$100,000 of qualifying property, reduced by the amount by which the cost of
qualifying property exceeds $400,000. The $100,000 and $400,000 amounts
are indexed for inflation after 2003 and before 2010. For 2006, the
amounts are $108,000 and $430,000 respectively. Without the extension in
the TIPRA, the amounts would have dropped to $25,000 on a $200,00 cap after
2007.
Revenue
"Offsets" Kiddie Tax: Age Increase
The TIPRA
provides for increasing the age limit of the "kiddie-tax" to children under 18
years of age which is up from the previous under age 14. If a child under
18 has investment income, the first $850 is tax-free and the next $850 is
typically taxed at the child's tax rate. "Unearned" income above $1,700 is
taxable at the parents' top tax rate. This change in the law is effective
for 2006. Estimated tax payments for 2006 may need to be adjusted for this
provision.
ROTH IRAs:
Increase in Eligibility
TIPRA
eliminates the $100,000 adjusted gross income test for converting a traditional
IRA to a ROTH IRA. The change is effective for the years after 2009.
Taxpayers who convert in 2010 can elect to recognize the conversion income in
2010 or average it over the next two ears of 2011 and 2012. While
contributions to a ROTH IRA are not deductible - the earnings are tax-free.
ROTH IRAs do not require minimum distributions at age 70.
Offers-in-Compromise: Required Payment with Offer
The TIPRA
increases the amounts that must be paid by taxpayers submitting an
offer-in-compromise. Under the new law, taxpayers are required to make
partial payments of their liabilities in addition to any user fees now imposed
by the Internal Revenue Service. The required payment amount will be
applied to the outstanding tax liability and not refunded if the offer is not
accepted. For a lump sum offer, taxpayers will be required to pay 20% of
the amount being offered. For an installment payment offer, taxpayers will
be required to make their proposed scheduled payments while the offer is being
considered. It should be noted, if the IRS fails to process the OIC within
two years, the offer will be deemed to be accepted by the IRS.
Average Tax
Savings per Taxpayer
|
INCOME (2005 DOLLARS) |
AVERAGE TAX SAVINGS |
|
Less than $10,000 |
$0 |
|
10,000 - 20,000 |
$3 |
|
20,000 - 30,000 |
$10 |
|
30,000 - 40,000 |
$17 |
|
40,000 - 50,000 |
$47 |
|
50,000 - 75,000 |
$112 |
|
75,000 - 100,000 |
$406 |
|
100,000 - 200,000 |
$1,395 |
|
200,000 - 500,000 |
$4,527 |
|
500,000 - 1 million |
$5,656 |
|
Over 1 million |
$42,766 |
Other Tax
Items of Note:
The maximum IRA
contribution for 2006 remains at $4,000 however the "catch up" amount for
taxpayers age 50 and older has increased from $500 to $1,000, making the maximum
contribution for a taxpayer age 50 and older to be $5,000.
President Bush
signed into law the "Hero Act" on May 28, 2006 allowing non-taxable combat pay
to be deemed earned income to qualify for an IRA contribution. This Act is
deemed effective for years 2004, 2005 and future years allowing those taxpayers
who qualify to make 2005 and 2006 beyond the normal contribution due date.
The contribution due date has been extended for qualifying taxpayers until May
28, 2009.
For 2006,
taxpayers who are participants in 401 (k) plans may now have an opportunity to
participate in ROTH 401 (k) plans may now have an opportunity to participate in
a ROTH 401 (k) limits are $15,000 with an additional $5,000 "catch up"
contribution for taxpayers age 50 and older. Unlike the ROTH IRA there is
income limitation on the ROTH 401 (k).
Energy credits
are available for homeowners for 2006 and 2007. A $500 lifetime credit is
available for certain energy-saving expenditures for your personal residence.
Although not in
a tax act, you have undoubtedly heard of the decision by the Department of the
Treasury to rebate Federal Excise Taxes charged on long-distance telephone
service. Not only will taxpayers receive a credit for the Federal Excise
Tax paid for three years they will also receive interest on their money.
IRS is working with the Treasury Department to offer taxpayers a "standard
credit" rather than put taxpayers through the rigorous exercise of compiling the
taxes paid.
And finally,
for taxpayers making too much in income and loosing the deductibility of their
itemized deductions and personal exemptions, known as the phase out, 2006 will
see the beginning f the phase out of the phase out. Taxpayers in 2006 will
loose only 2/3 of the deductions and exemptions they lost in 2005. In 2007
they will only loose 1/3 and in 2008 they will loose nothing. The phase
out will no longer exists after 2007.
In the Summer
2006 Tax Client Newsletter we have reviewed many of the most significant tax law
changes affecting your taxes.
Our combined
focus should be on how the tax law changes affect you, how the tax law changes
can benefit you and what tax planning techniques should be implemented in order
to maximize their tax benefit to you.
Please
contact us for the opportunity and privilege to
serve as your tax professional.
====================================================================
DID YOU KNOW??
S Corporations
The Treasury Department Inspector General
for Tax Administration recommends to treat all income of single-owner S
corporations as self-employment income. The owners then would pay the same
tax as sole proprietors.
Single-member LLCs
A one-member LLC is treated
as a "disregarded entity" for income tax purposes. The owner
reports
business income on Schedule C of his/her personal tax return and is responsible
for owing taxes for any of the LLC's employees.
Domestic Production
The new domestic production
deduction, which for 2005 and 2006 is generally 3% of the net income from
domestic production activities, took effect on January 1, 2005. The
deduction cannot exceed 50% of W-2 wages and, for pass-through entities, the
owner claims the deduction and special rules apply for figuring the W-2 wage
limitation. Partners are, however, at a disadvantage with S
corporation shareholders because guaranteed payments and other distributions to
partners are not W-2 wages.
Business Expenses
Business expenses incurred
by the owner and/or shareholder of pass-through entities can be reimbursed by
the business if it chooses to. If the owner and/or shareholder declines
reimbursement (perhaps because of cash flow concerns) they cannot claim any
deduction on his/her personal tax return. The effect is that the amount
that wasn't reimbursed is treated as a contribution to the capital of the
business. However, the corporation can reimburse the employee/shareholder
on a tax-free basis and the reimbursement is not treated as compensation to the
shareholder and is not subject to employment taxes. Thus, the corporation
deducts the expenses, reducing the corporate income reported by the
employee/shareholder.
Mileage Rate
The 2006 standard mileage
rate is .445 per mile.
====================================================================
Education
Incentives
Saving for college may be one of the most important things you do for you
child. Because there are many options
available, it may be difficult to decide.
Old US savings bonds
Bonds earn interest up to their “original maturity”—that is, when the accumulated interest and the original price paid for a particular bond total the face value of the bond. But interest payments are automatically extended after that, usually for periods of ten years, until the bond reaches its “final maturity.” At that point, the bond quits earning interest.
Independent
Contractor Reporting
The State of California
now requires all companies to report any 1099 contractors that receive over
$600 to the state as soon as they reach this amount, not just at the year
end. The form for this is DE543.
Small Corporations missing AMT exemption
Some small corporate firms are paying too much in taxes with the Alternative Minimum Tax, not realizing they are exempt.
Converting
a traditional IRA to a Roth IRA
Should
you convert your traditional IRA to a Roth IRA? What are the tax
ramifications? The Roth IRA does appeal to many people, so it may make sense
to convert your traditional IRA to a Roth IRA.
Reporting Gambling Winnings and Losses
Many people ask if they must pay taxes on their gambling winnings. The answer is Yes. Gambling winnings are fully taxable and must be reported on your income tax return. You cannot reduce your gambling winnings by your gambling losses; however, you may be able to deduct your losses separately.
====================================================================
The Baby Boomers
By the end of the year, the first of the
baby boomers will turn 60. Here are some interesting facts about the
"boomers."
|
16.8% |
The percentage of the
nation's population made up of baby boomers. |
|
51% |
Percentage of boomers
who are women |
|
16.9% |
Percentage of boomers
who are minorities. |
|
32 |
The
number of boomers, who already are age 50 or older (in millions) |
|
|
9 |
Number of states where more than half of all boomers live. |
|
|
14.2% |
The
divorce rate for boomers. |
|
|
12.6% |
Percentage of boomers who have never married |
|
|
59% |
Percentage of boomers who voted in the last national election. |
|
Saving for College
Contributions to state sponsored
529 plans are made with after-tax dollars but earnings accumulate
federally tax deferred. In addition, withdrawals for
"qualified" education expenses are exempt from federal
taxes through 2010.
Unlike Coverdell Education
Savings Accounts, which also offer tax advantages, 529 plans don't
limit annual contributions and there is no AGI test. As a
practical matter, taxpayers may wish to limit their annual
contributions to the $11,000/$22,000 limits (federal gift tax
exemption). Note that a contribution of up to five years worth
of gift giving ($55,000/$110,000) can be made to a 529 plan in one
year.
While 529 plans do not have
annual contribution limits, they do have aggregate asset limits
(established by each state). In general, the limits tend to be
rather generous taking into account the increases in college costs.
Most 529 plans offer the
following features:
-
No income restrictions on
donors.
-
No restrictions on the
beneficiary's age.
-
Ability to change the
beneficiary to another qualified family member.
-
The donor (and not the
student) controls the assets.
Almost every state now publishes
plan descriptions that clearly point out the related fees, expenses,
risks, investment options and more. You can compare detailed
data about every plan at www.savingforcollege.com,
an authoritative site that lists fees, investment managers,
investment limits and state tax breaks for every plan. For $30
a year, www.401kid.com will
suggest the best plan and investment choices for a tax payer.
Tax Court Ruling Allows
Deduction of M.B.A. Degree
Business school students may
soon have better luck deducting their tuition, thanks to a new Tax
Court ruling. In recent years the IRS has increasingly
challenged attempts by taxpayers to deduct as a business expense the
cost of obtaining an M.B.A. A string of recent court decisions
have also ruled against taxpayers.
Under Code Section 162 of the
Code, taxpayers can deduct educational costs as a business expense
IF the coursework maintains or improves skills required in their
current jobs or IF the education is required to keep their present
salary, status or job. IF the education qualifies the taxpayer
to work in a new career or IF the coursework is necessary as a
minimum-education requirement for a job, then such expenses aren't
deductible.
In the case under consideration,
the Tax Court held that petitioner, Daniel Allemier, who had
obtained an M.B.A. from Pepperdine University while working at a
dental services company, could deduct his tuition expenses because
the "basic nature" of what he was doing before and after
his degree didn't significantly change.
In other cases in recent years,
the courts have looked beyond the business the taxpayer was already
engaged in and have denied the deduction because the M.B.A. degree
would have qualified the taxpayer to work in a new job, regardless
of whether he or she went to work there or not.
M.B.A. expenses, considered
miscellaneous itemized deductions, are deductions, are deductible
only to the extent that total expenses exceed 2% of AGI.
The Federal Estate
Tax...Going, Going, Gone?
Congress is talking about
reducing the federal estate tax or even repealing it permanently.
Under current law, the state tax
is scheduled to disappear entirely in 2010, and then return in 2011.
|
Year |
Basic Exemption |
Top Tax Rate |
|
2005 |
$1.5 million |
47% |
|
2006 |
$2.0 million |
46% |
|
2007 |
$2.0 million |
45% |
|
2008 |
$2 million |
45% |
|
2009 |
$3.5 million |
45% |
|
2010 |
NO FEDERAL ESTATE TAX |
NO FEDERAL ESTATE TAX |
|
2011 |
$1.0 million |
55% |
What financial records to keep and how long to keep them
Everyone has personal
financial and investment records and they can pile up. Click
here
to find out what you really need to keep and why.
If you own a small
business follow this link
to answer questions about how long you should keep those records.
New “phishing” season begins with tax refunds
Those waiting for tax refunds can expect e-mail
phishing
scams that seek personal and financial information.
Annuities
What is an annuity? What are the
different kinds of annuities? What is an equity-index annuity? How
do I invest in an annuity? Are there fees? What are the advantages
of an annuity? Find all the answers to these questions and more by
clicking on
Annuities
and read the articles as published by the LA Times.
Use
tax on purchases from out-of-state vendors
SPECIAL NOTICE from the State Board of
Equalization! "If you purchase merchandise from a vendor located
outside the state or out of the country, you may owe California use tax on the
purchase." When do you owe use tax on purchases from out-of-state
vendors? How do you pay the use tax? Can you get credit for paying
another state's tax on the purchase? For information about this special
notice please click
here.
In-State
Voluntary Use Tax Disclosure
SPECIAL NOTICE from the State Board of
Equalization! This "use tax applies when a person or business in
California purchases tangible merchandise from a retailer located outside of
this state that will be used, consumed, given away, or stored in
this state. From January 1, 2006, the In-State Voluntary Disclosure
Program allowed qualified purchasers within California who were not otherwise
required to hold a seller's permit to report and pay their use tax liability
with a three-year statute of limitations. Passage of Assembly Bill 671 amended
section 6487.06 to extend the previous sunset date of the program from January
1, 2006 to January 1, 2008." To find out about benefits and who
qualifies for the In-State Voluntary Disclosure Program please click
here.
=======================================================
DID YOU KNOW??
S Corporations
The Treasury Department Inspector General
for Tax Administration recommends to treat all income of single-owner S
corporations as self-employment income. The owners then would pay the same
tax as sole proprietors.
Single-member LLCs
A one-member LLC is treated
as a "disregarded entity" for income tax purposes. The owner
reports
business income on Schedule C of his/her personal tax return and is responsible
for owing taxes for any of the LLC's employees.
Domestic Production
The new domestic production
deduction, which for 2005 and 2006 is generally 3% of the net income from
domestic production activities, took effect on January 1, 2005. The
deduction cannot exceed 50% of W-2 wages and, for pass-through entities, the
owner claims the deduction and special rules apply for figuring the W-2 wage
limitation. Partners are, however, at a disadvantage with S
corporation shareholders because guaranteed payments and other distributions to
partners are not W-2 wages.
Business Expenses
Business expenses incurred
by the owner and/or shareholder of pass-through entities can be reimbursed by
the business if it chooses to. If the owner and/or shareholder declines
reimbursement (perhaps because of cash flow concerns) they cannot claim any
deduction on his/her personal tax return. The effect is that the amount
that wasn't reimbursed is treated as a contribution to the capital of the
business. However, the corporation can reimburse the employee/shareholder
on a tax-free basis and the reimbursement is not treated as compensation to the
shareholder and is not subject to employment taxes. Thus, the corporation
deducts the expenses, reducing the corporate income reported by the
employee/shareholder.
Mileage Rate
The 2006 standard mileage
rate is .445 per mile.
====================================================================
Education
Incentives
Saving for college may be one of the most important things you do for you
child. Because there are many options
available, it may be difficult to decide.
Old US savings bonds
Bonds earn interest up to their “original maturity”—that is, when the accumulated interest and the original price paid for a particular bond total the face value of the bond. But interest payments are automatically extended after that, usually for periods of ten years, until the bond reaches its “final maturity.” At that point, the bond quits earning interest.
Independent
Contractor Reporting
The State of California
now requires all companies to report any 1099 contractors that receive over
$600 to the state as soon as they reach this amount, not just at the year
end. The form for this is DE543.
Small Corporations missing AMT exemption
Some small corporate firms are paying too much in taxes with the Alternative Minimum Tax, not realizing they are exempt.
Converting
a traditional IRA to a Roth IRA
Should
you convert your traditional IRA to a Roth IRA? What are the tax
ramifications? The Roth IRA does appeal to many people, so it may make sense
to convert your traditional IRA to a Roth IRA.
Reporting Gambling Winnings and Losses
Many people ask if they must pay taxes on their gambling winnings. The answer is Yes. Gambling winnings are fully taxable and must be reported on your income tax return. You cannot reduce your gambling winnings by your gambling losses; however, you may be able to deduct your losses separately.
=============================================================================
The Baby Boomers
By the end of the year, the first of the
baby boomers will turn 60. Here are some interesting facts about the
"boomers."
|
16.8% |
The percentage of the
nation's population made up of baby boomers. |
|
51% |
Percentage of boomers
who are women |
|
16.9% |
Percentage of boomers
who are minorities. |
|
32 |
The
number of boomers, who already are age 50 or older (in millions) |
|
|
9 |
Number of states where more than half of all boomers live. |
|
|
14.2% |
The
divorce rate for boomers. |
|
|
12.6% |
Percentage of boomers who have never married |
|
|
59% |
Percentage of boomers who voted in the last national election. |
|
Saving for College
Contributions to state sponsored
529 plans are made with after-tax dollars but earnings accumulate
federally tax deferred. In addition, withdrawals for
"qualified" education expenses are exempt from federal
taxes through 2010.
Unlike Coverdell Education
Savings Accounts, which also offer tax advantages, 529 plans don't
limit annual contributions and there is no AGI test. As a
practical matter, taxpayers may wish to limit their annual
contributions to the $11,000/$22,000 limits (federal gift tax
exemption). Note that a contribution of up to five years worth
of gift giving ($55,000/$110,000) can be made to a 529 plan in one
year.
While 529 plans do not have
annual contribution limits, they do have aggregate asset limits
(established by each state). In general, the limits tend to be
rather generous taking into account the increases in college costs.
Most 529 plans offer the
following features:
-
No income restrictions on
donors.
-
No restrictions on the
beneficiary's age.
-
Ability to change the
beneficiary to another qualified family member.
-
The donor (and not the
student) controls the assets.
Almost every state now publishes
plan descriptions that clearly point out the related fees, expenses,
risks, investment options and more. You can compare detailed
data about every plan at www.savingforcollege.com,
an authoritative site that lists fees, investment managers,
investment limits and state tax breaks for every plan. For $30
a year, www.401kid.com will
suggest the best plan and investment choices for a tax payer.
Tax Court Ruling Allows
Deduction of M.B.A. Degree
Business school students may
soon have better luck deducting their tuition, thanks to a new Tax
Court ruling. In recent years the IRS has increasingly
challenged attempts by taxpayers to deduct as a business expense the
cost of obtaining an M.B.A. A string of recent court decisions
have also ruled against taxpayers.
Under Code Section 162 of the
Code, taxpayers can deduct educational costs as a business expense
IF the coursework maintains or improves skills required in their
current jobs or IF the education is required to keep their present
salary, status or job. IF the education qualifies the taxpayer
to work in a new career or IF the coursework is necessary as a
minimum-education requirement for a job, then such expenses aren't
deductible.
In the case under consideration,
the Tax Court held that petitioner, Daniel Allemier, who had
obtained an M.B.A. from Pepperdine University while working at a
dental services company, could deduct his tuition expenses because
the "basic nature" of what he was doing before and after
his degree didn't significantly change.
In other cases in recent years,
the courts have looked beyond the business the taxpayer was already
engaged in and have denied the deduction because the M.B.A. degree
would have qualified the taxpayer to work in a new job, regardless
of whether he or she went to work there or not.
M.B.A. expenses, considered
miscellaneous itemized deductions, are deductions, are deductible
only to the extent that total expenses exceed 2% of AGI.
The Federal Estate
Tax...Going, Going, Gone?
Congress is talking about
reducing the federal estate tax or even repealing it permanently.
Under current law, the state tax
is scheduled to disappear entirely in 2010, and then return in 2011.
|
Year |
Basic Exemption |
Top Tax Rate |
|
2005 |
$1.5 million |
47% |
|
2006 |
$2.0 million |
46% |
|
2007 |
$2.0 million |
45% |
|
2008 |
$2 million |
45% |
|
2009 |
$3.5 million |
45% |
|
2010 |
NO FEDERAL ESTATE TAX |
NO FEDERAL ESTATE TAX |
|
2011 |
$1.0 million |
55% |
What financial records to keep and how long to keep them
Everyone has personal
financial and investment records and they can pile up. Click
here
to find out what you really need to keep and why.
If you own a small
business follow this link
to answer questions about how long you should keep those records.
New “phishing” season begins with tax refunds
Those waiting for tax refunds can expect e-mail
phishing
scams that seek personal and financial information.
Annuities
What is an annuity? What are the
different kinds of annuities? What is an equity-index annuity? How
do I invest in an annuity? Are there fees? What are the advantages
of an annuity? Find all the answers to these questions and more by
clicking on
Annuities
and read the articles as published by the LA Times.
Use
tax on purchases from out-of-state vendors
SPECIAL NOTICE from the State Board of
Equalization! "If you purchase merchandise from a vendor located
outside the state or out of the country, you may owe California use tax on the
purchase." When do you owe use tax on purchases from out-of-state
vendors? How do you pay the use tax? Can you get credit for paying
another state's tax on the purchase? For information about this special
notice please click
here.
In-State
Voluntary Use Tax Disclosure
SPECIAL NOTICE from the State Board of
Equalization! This "use tax applies when a person or business in
California purchases tangible merchandise from a retailer located outside of
this state that will be used, consumed, given away, or stored in
this state. From January 1, 2006, the In-State Voluntary Disclosure
Program allowed qualified purchasers within California who were not otherwise
required to hold a seller's permit to report and pay their use tax liability
with a three-year statute of limitations. Passage of Assembly Bill 671 amended
section 6487.06 to extend the previous sunset date of the program from January
1, 2006 to January 1, 2008." To find out about benefits and who
qualifies for the In-State Voluntary Disclosure Program please click
here.
=======================================================
