1. YOU are required to file a California tax return if your gross income exceeds:
a. Single – $16,047.
b. Head of household – $27,147.
c. Married filing jointly – $32,097.
Taxpayers with dependents or who are aged 65 or over have higher filing thresholds.
2. Taxpayers who do not itemize deductions for mortgage interest, property taxes, medical, contributions and other personal deductions can use the following standard deductions:
a. Single, married filing separate – $3,992.
b. Head of household, surviving spouse, married filing joint – $7,984.
3. Personal exemption credits have increased as follows:
a. Single, married filing separate, head of household – $108.
b. Married filing joint, qualified widow(er) – $216.
c. Blind or seniors aged 65 or over – add $108.
d. Dependents – $333 each.
4. Renter’s credit remains fixed at:
a. For single returns – $60.
b. For joint returns – $120.
5. Franchise Tax Board (FTB) Shares Data with Cities:
This is bad news for taxpayers. Cities can request the State a list of individuals and companies who do business within their city boundaries but fail to obtain and pay city licenses. Conversely, the State can also request data of taxpayers for audit considerations.
6. Interagency Intercept Collection Program:
This news is even worse that #5 above. This fancy name simply means that about 400 government agencies can seize your refund from one agency to pay another agency. For example, if you have a refund from the IRS but owe the State, FTB can intercept your federal refund to pay your state liability. The IRS can also seize your state refund to pay delinquent child support and other obligations.
7. New College Access Tax Credit:
California wants to increase the State’s Cal Grant Program which provides money for books and living expenses to low income college students. It also wants the federal government to help fund the program. Enter College Access Tax Credit (CATC) – a new state tax credit for taxpayers who make authorized contributions of money to a CATC Fund. Individuals or companies that contribute to the fund will get a generous state tax credit equal to 60% of their donation in 2014 (55% in 2015 and 50% in 2016). You get a tax credit on your state tax return. You can also deduct the donation as a charitable contribution on your federal return. The tax deduction benefits people who are subject to the alternative minimum tax more than people who don’t pay AMT. That’s because charitable contributions are deductible for AMT, but state income taxes are not. People who are not subject to AMT can deduct both.
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Sy Al-os Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies. The firm celebrates its 38th anniversary in 2015.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in 704 Mira Monte Place, Pasadena, CA 91101. He has 50 years of experience in accounting, consulting, and tax work.
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The Firm proudly welcomes Arlene Al-os in 2015. She obtained her bachelors of Science in Accountancy from Mindanao State University and MBA from Ateneo de Manila University. She teaches intermediate accounting at UCLA and was a professor of Economics at Asia Pacific College. She has over 15 years of experience including member firms of KPMG and BDO Seidman accounting firms.
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Our readers may call (626) 744-0200 or email tax questions to [email protected]. Please visit our website for about 300 tax tips at www.victorsycpa.com.
