Tangible Personal Property – What CA Businesses Need to Know

Businesses must pay taxes on their tangible personal property (TPP), which includes their supplies, fixtures, machinery, and equipment, in addition to their real property, which includes land and buildings, in most of the U.S. Although, many small businesses owe very little, the costs of compliance can be high. For a negligible loss of revenue, U.S. businesses can remove these compliance expenses by qualifying for a de minimis or other possible exemption. California businesses, located in Orange County, may qualify for a low-value ordinance exemption which increased to $10,000 and does not include real property or business inventory based on those limitations listed on the OC Assessor’s website. Los Angeles County businesses should refer to the LA County Assessor website to determine if they are required to file a Business Property Statement (Form 571-L) annually and if any exemption(s) will apply. Please refer to the local county and city in which your California business is located to find more information.

Managing TPP is difficult because, rather than getting a tax bill from the IRS, Californian business owners (taxpayer) are responsible for figuring out their tax liability every year. Due to the complexity of tax reporting and tax liabilities, any errors could negatively lead to a possible FTB audit, County Reassessment Notice or CDTFA collection action if appropriate legal and financial advice is not obtained from a reliable expert or local tax attorney, at the time of calculation. Additionally, California Business Owners (taxpayers) should know that corporate directors, officers, members, managers, partners, or any other people with control or supervision of the filing and payment of taxes may be held personally liable for any unpaid sales and use taxes, TPP, interest, and penalties. FTB, OC Tax Collector, and CDTFA offer free online tax calculators to help California Business Owners (taxpayers) calculate their tax liability based on filing status and income for the current tax year and tax table. You may also have access to previous tax year calculators and tax tables, subject to availability on these respective state websites. LA County Assessor website offers various tax resources for business owners as well.

If you have any questions regarding your individual or businesses’ state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD, CDTFA or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

Are You Aware of New Reporting Rules for Digital Assets?

With a tiered approach to compliance, the Internal Revenue Service has broadened reporting requirements and compliance for digital assets to match their complexity as currency continues to permeate the financial sector. This means that regulations could be subject to change more frequently as different aspects of reporting requirements are identified and businesses adapt their internal systems and processes to meet these new requirements before unleashing more complex cost basis tracking and reporting.

Some examples of such changes may likely include the introduction of the “1099-DA” form, special rules for qualifying stablecoins and specified NFT’s, backup withholding requirements, multiple broker rule clarification, expanded definitions, new documentation requirements and cost basis tracking and reporting. Refer to the FAQ's on Virtual Currency Transactions and Reporting Crypto on the IRS website for more information on these items.

This signifies a significant change in taxation, and for businesses to remain ahead of these changes, they must have adequate planning, resources, and a strong compliance infrastructure. To reduce any blind spots and improve your business's ability to take advantage of opportunities in this new digital era, seek guidance from your local tax attorney regarding any federal, state, or foreign tax matters.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

 

Plan for Your Tax Withholdings Ahead of Next Year’s Filing Deadline

To minimize your tax liabilities, it is important to remember to check on your tax withholdings often and regularly to avoid unexpected issues when filing your tax returns. The Internal Revenue Service recently released a free online tool for taxpayers to utilize in managing their taxes when receiving income. The Tax Withholding Estimator can help determine if taxpayers need to submit an updated W-4 Form and/or Employee’s Withholding Certificate with their employer to voluntarily adjust how much taxes are deducted from paychecks throughout the tax year. This tool should be used at least once a year and could include every quarter if taxpayer income fluctuates often throughout the year as a W-4 employee. Self-employed taxpayers could also find value in using the Tax Withholding Estimator in determining how much tax should be deducted from earnings and placed aside ahead of tax filing season.

To determine an effective tax withholding estimate, it is important to gather the following documents: all income statements for yourself and spouse (if filing jointly), any data as it relates to earnings, and your most recently filed income tax return. If you are considered a taxpayer with a complex tax situation, please refer to Publication 505, Tax Withholding and Estimated Tax, for more information and instructions that may not be explained by using the tax withholding estimator.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

 

Forget something to include on your Tax Return? Rest Assure. You have Options.

There are choices that could help you if you file your taxes by the April 15th deadline and then find that you may have overlooked a necessary document to file, may have reported income incorrectly, may have been eligible for additional deductions, or you owe money. Planning in advance of the hectic tax season is crucial for accurately filing your annual tax return, but unforeseen circumstances do occur. We discuss a few options in this blog that could reduce any disparities and improve the security of your financial future.

If you discover that there was an error in the documentation you included with your tax return, you may be able to file an amended return to fix the error or add any missing forms you are legally required to report. Use Form 1040-X, Amended U.S. Individual Income Tax Return, and follow the instructions. Consult with a tax attorney who can help and provide guidance in further detail based on your surrounding circumstances.

If you owe taxes, one option is to consider working with IRS and setting up a payment plan if you cannot afford to pay your tax payment in full. In some instances, you might be eligible for an offer in compromise, which means you may be eligible to settle your amount owed for less than the full amount depending on your financial situation. Consult with a tax attorney who can help identify if this is possible based on your surrounding circumstances.

As a friendly reminder, any tax filing extensions will extend the tax filing deadline not the tax payment deadline and could result in penalties based on when payment is submitted to the IRS or state agency where payment is due. If you discover you have missed the deadline and receive a notice regarding payment penalties, you might be eligible for a penalty abatement based on providing evidence to show there was good reason for filing or paying late. You might also be eligible for first time penalty abatement with the IRS. Consult with a tax attorney who can help identify if this is possible based on your surrounding circumstances.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

 

Unclaimed 2021 Tax Refunds – Act Now and Check Your Eligibility

The Internal Revenue Service recently released information for tax payers who may be eligible for unclaimed refunds if they did not file their 2021 tax returns. These eligible tax payers must file by the April 15^th deadline in 2025 to continue to be eligible if they do not owe a tax payment for prior tax years to the IRS or a state agency. Additionally, if tax payers have not filed for 2022 and 2023 tax years, they could have 2021 refunds withheld. Tax payers have up to three years from the tax filing due date, to file returns or their refund(s) could be sent to the U.S. Treasury if filed outside of the three-year window.

Tax payers could also lose eligibility for any refundable tax credits, such as Earned Income Tax Credit (EDTC), Recovery Rebate Credit (RRC) or other applicable credit by missing the filing deadline for 2021 tax returns. According to the IRS’s  State by State estimates of individuals who may be due 2021 income tax refunds, there are approximately 116,300 people who have unclaimed refunds available and should act now. Tax payers will not receive any penalties for filing late if a refund is owed. Refer to  Publication 17, Your Federal Income Tax (For Individuals) for more information on whether a tax return needs to be filed.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

 

Last-Minute Tax Tips from FTB – Get Ready to File by April 15, 2025

As many Californian residents may know, the annual state tax filing deadline of April 15, 2025 is right around the corner and fast approaching. FTB recently released guidance on how taxpayers may be eligible to file for free, claim cash-back credits, avoid scams, and make secure tax payments online. Free resources are available to assist tax payers to file returns quickly and securely for federal (IRS Direct File) and state (CalFile) tax returns. IRS Direct File is available to those tax payers who lived and worked in a participating state and report certain income, credits, and deductions. Currently, there are twenty-five states that offer the IRS Direct File option. Refer to the IRS Direct File website link for more information.

Californian taxpayers with income levels up to $31,950 may quality for the California Earned Income Tax Credit (CalEITC), which could provide cash back or lower any tax owed. Moreover, if eligible, Californian taxpayers with children under age six may receive up to $1,154 in Young Child Tax Credits (YCTC). Keep in mind that, beginning in tax year 2022, income is not required if all other CalEITC and YCTC requirements are met. Furthermore, the Foster Youth Tax Credit (FYTC) provides up to $1,154, starting in the 2024 tax year. For additional details on cash-back credits, refer to CalEITC.

Individual taxpayers may also be eligible for a one-time cancellation of a tax filing penalty or for paying taxes late. This is a new development and relief option for taxpayers who have complied with all tax return filing requirements, have not previously received a one-time abatement and no outstanding tax liabilities separate from the penalty under consideration for a one-time cancellation abatement. This concerns tax year 2022 forward. Refer to the FTB’s One-Time Penalty Abatement page or call 800.689.4776.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

 

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.

 

Working & Living Abroad – Don’t forget to file your 2024 tax return by June 16th

This is your friendly reminder to file your 2024 tax return and pay any tax due by June 16, 2025 (June 15^th falls on a Sunday) if you are a U.S. Citizen or resident alien and are working and living abroad. This applies to anyone living outside of the U.S. and Puerto Rico AND main place of business or post of duty is located outside of the U.S. and Puerto Rico or Military or Naval Service on duty is located outside of the U.S. and Puerto Rico. Do not forget to include a written statement indicating which scenario applies to your situation with your filed tax return.

Extensions are available for anyone who cannot meet the June 16^th filing deadline which applies to the tax filing deadline, not the tax payment deadline. Extensions can be requested electronically by going to the IRS website for more information. Extension requests can be sent via U.S. mail if taxpayers are unable to request an electronic extension. By submitting Form 7004, businesses may qualify for a longer extension period (six months); further details are available here. If living abroad based on Military or Naval Service reasons, you may be eligible for an automatic two-month extension to file your tax return without having to submit a request for an extension if using a calendar year and April 15^th is your filing deadline.

You may be eligible for special tax benefits while living abroad which would only be obtained by filing a U.S. tax return. For taxpayers with foreign financial accounts, do not forget to report those accounts to the U.S. Treasury Department, regardless if there is taxable income generated by such accounts. If taxpayers have any virtual currency transactions, these would need to be reported to the IRS on tax returns as these are typically considered taxable such as any other property transaction would be.

If you have any questions regarding your tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.