State government waste and a Sales Tax reminder for those with retail sales in California

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Aug 222019

I received an envelope today from the California Department of Tax and Fee Administration in Sacramento. This was not a window envelope, but rather a heavy stock (20lb? 24lb?), security envelope (you know, with the blue hashed printing so one cannot easily discern what’s inside), bulk mailed under USPS permit number 569. I don’t get all that much mail from California, but as we do handle clients all over the country and abroad, it wasn’t that unusual.

Inside the envelope was a letter-sized (well, 11×17, folded to form a booklet) 4-page, full color newsletter, entitled, NEWS FOR TAX PRACTITIONERS (Publication 542, August 2019, Edition 10). This is apparently a semi-annual newsletter for tax professionals. Who knew?

Before I get to the Sales Tax reminder (hint: think the Wayfair decisionPortable Document Format), I was struck by the apparent cost of the mailing of this information. First, the zeitgeist is that we should never print anything unless absolutely necessary (because trees won’t regrow or that paper isn’t biodegradable or some such justification). Not that I’m all that crazy about having more paper to handle, but that’s not my point. So, here I had in my hands a full color, moderately-heavy-stock newsletter entirely lacking in personal information to be kept private, mailed in a heavy-stock, custom printed security envelope, sent from a state reportedly having financial difficulties. It boggles the mind.

Please, people, lobby your elected officials to stop wasting your hard earned money. Of course, it’s easy to waste taxpayer money when all you need to do is increase the tax rate to cover the expense. So it goes.

PS – I did not knowingly subscribe to this mailing.

Now, as for the Sales Tax reminder: In April, with the signing of Assembly Bill No. 147, California joined the growing group of states which now impose the collection of Sales Tax on out-of-state retailers selling over the internet and delivering into the state. In the case of California, the threshold is $500,000 of sales within the State, with no minimum number of transactions required, and effective April 1, 2019 (district tax collection became effective April 25, 2019). See this page for specifics.

There is some relief afforded “marketplace sellers” using fulfillment centers located in-State. See this page for details, under Special Notices – 2019, July postings.

To determine whether any or all of your sales into the state of California are subject to the collection of Sales Tax, you might want to review the current California statutes.

 Posted by at 5:10 pm

Deduction for legal fees related to civil rights and whistle blower suits

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Dec 102018

While most legal fees relating to personal matters are non-deductible (or no longer deductible), IRC Section 62(a) provides for a deduction for attorneys fees in civil rights & whistle blower cases as a write-in deduction on Line 36 of Form 1040, before AGI.

Be sure to bring to your tax preparer’s attention any such legal fees which you have paid during the tax year in order to properly report them and take the deduction to which you are entitled.

State Energy Tax Incentives

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Dec 072018

Contemplating an investment in some energy-efficient equipment but unsure as to what tax incentives may be available in your state? The N.C. Clean Energy Technology Center at N.C. State University, funded by the U.S. Department of Energy, maintains DSIRE, the Database of State Incentives for Renewables & Efficiency.

Simply visit the link above and enter your zip code to get a list of potential incentives available in your area.

Cryptocurrency and you (or, what you need to know about Bitcoin, briefly)

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Jan 092018

This will probably morph into a series of brief posts about cryptocurrency and how to handle it from a business and tax perspective. Most of us are still working through the maze, and of course, the tax landscape continues to shift beneath our feet. This article has been written post-signing of H.R.1, the Tax Cuts and Jobs Act, signed into law in December, 2017. Continue reading »

Why Accountants and Telephones Don’t Get Along

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Mar 182016

A recent article in the CPA Practice Advisor cites a study of 2,234 people, conducted by “audio branding specialist” (whatever that means exactly) PH Media Group, which concludes that less than 24% of Americans who contact their accountants via telephone are satisfied with the manner in which their calls are handled. The article goes on to infer that as a result, accounting firms score an F in the area of phone skills this post. Continue reading »

Think twice before becoming an Uber Entrepreneur

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Jul 022015

The allure of being your own boss is a strong pull for many to escape the traditional demands of a regular job. Recently, app-oriented companies (such as Uber, Washio, Postmates, Shyp, and others) have become popular ways for non-capitalized erstwhile entrepreneurs to enter the wide world of self-employment. Continue reading »

Things to consider regarding business service providers when closing accounts

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Sep 152014

Payroll services are great assets. As compliance becomes more and more a full time job, outsourcing this task to experienced providers has become a popular alternative to handling such matters in-house. A single penalty for a missed tax deposit can far exceed the cost of a good payroll service for an entire year.

Complications do arise, however, such as when starting up, switching from in-house to a provider, changing providers mid-year, or terminating a business mid-quarter or before W-2 season.

We recently had a situation where a client sold his business assets (but no the business). As his business entity no longer had payroll, he contacted the payroll provider to terminate his account (with no payroll to process and no income from further operations, it seemed a logical choice). Unfortunately, that left the final quarter’s payroll tax reporting undone, and us (as the accountants preparing the general ledger) unable to access his payroll data online.

While we can’t blame the service provider per se (the provider is not paid to maintain the data in the online portal or to provide any services whatsoever after the account is closed), the issue is that many clients seem to forget that even though payroll may have stopped after the first week of the payroll quarter, payroll returns will still be due following the end of the quarter, and year-end reports (Federal Form 940, at a minimum) and W-2’s (and W-3) will also be due the following January.

Most payroll service providers will require their clients to maintain accounts (even if no current payroll is being generated) for a nominal fee in order to prepare the quarterly and year-end reports, as well as the W-2’s, and clients should expect to likely pay a la carte for such reporting services, even if they were previously accustomed to a package deal (unless the provider offers a similar package for inactive employers).

As always, communication is key. In the case above, because we have an ongoing relationship with the payroll provider, we were able to obtain the reports necessary and get the dialog moving (again) between our client and the payroll provider to ensure that the reports will indeed be prepared for this year, and to obtain the data we needed to prepare the general ledger work in a timely fashion. It may be easy to mentally separate the roles of accountant and payroll service provider, but in truth, we both work together, complimenting each other’s service offerings, and a good accountant will strive to maintain a good rapport with the service provider to minimize the impact on the client of procedural and administrative matters.

John Wick: Chapter 2(2017)

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Apr 232014

John Wick: Chapter 2(2017)

Quality : HD
Title : John Wick: Chapter 2
Director : Chad Stahelski.
Writer :
Release : 2017-02-08
Language : English.
Runtime : 122 min.
Genre : Thriller, Action, Crime.

Synopsis :
Movie ‘John Wick: Chapter 2’ was released in February 8, 2017 in genre Thriller. Chad Stahelski was directed this movie and starring by Keanu Reeves. This movie tell story about John Wick is forced out of retirement by a former associate looking to seize control of a shadowy international assassins’ guild. Bound by a blood oath to aid him, Wick travels to Rome and does battle against some of the world’s most dangerous killers.

John Wick: Chapter 2(2017)

W-2 codes for Boxes 12 and 14 related to New York State Employees

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Apr 232014

It is often hard to decipher some of these codes which identify various amounts reported on Forms W-2 in boxes 12 and 14. A quick sampling of them (specifically as related to New York State) would be:

414(h) – All non-taxable retirement contributions made to New York State or City retirement systems or to TIAA-CREF. This amount must be reported for State and Local taxes. If there is a minus sign (-) with this amount, State and Local taxes have already been paid.

WCX – Workers’ Compensation excluded amount. This is the amount awarded by NYS Workers’ Compensation Board which is excluded from the gross pay for the current year for a work- related injury.

IRC125 – For City University of New York (CUNY) employees only. This amount includes Dependent Care, Flexible Spending Account, and Non-Taxable Health Insurance and is excludable for Federal income tax, FICA and Medicare taxes. It is not included in Boxes 1, 3 and 5. This amount must be reported for State and Local taxes.

A full listing of these codes (and other interesting W-2 reporting) is available from the Office of the State Comptroller.

American Opportunity Tax Credit 2013

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Feb 132014

What began as the Hope Scholarship Credit has morphed into the American Opportunity Tax Credit (AOTC). Set to expire at the end of 2010, Congress first extended it through the end of 2012 under the Tax Relief and Job Creation Act of 2010, and further extended it through the end of 2017 under the American Taxpayer Relief Act of 2012.

The AOTC expands on the original Hope Credit in a number of ways. If you are attending college, or if a dependent of yours is attending college, the possibility of claiming the AOTC during the first four years of post-secondary education should not be overlooked.

When determining the amount of qualified higher education expense (QHEE) to use for the purpose of claiming the credit, remember to include:

  • Tuition;
  • Activity & center fees;
  • Books & study materials;
  • Equipment (including lab equipment, computer purchased for studies, etc.)

Other criteria apply, and the credit may be limited based upon income; nevertheless, the possibility should be explored go to these guys. Please be sure to mention higher education when discussing your tax matters with us.