FTB launches tax season with new taxpayer services
The 2008 filing season is almost upon us, and we have been busy looking for ways to make tax filing easier for California taxpayers and tax professionals. What follows is a description of technology and law changes that occurred in 2007, and tips for how to navigate successfully through the next few months.
Accessing many of our sites gets easier
Beginning January 2, 2008, we no longer require a Customer Service Number (CSN) to access these services:
- Web Pay
- Electronic installment agreements
Taxpayers now enter only their Social Security Number and last name to access these services.
My FTB Account
Those who used the service last year will notice the View Payments and Balance Due application has been renamed My FTB Account (see related article in this issue). This application now gives taxpayers the ability to view FTB-issued 1099-Gs, 1099-INTs, and California wage and withholding information, in addition to the ability to view their payments, and balances due. We encourage you to use My FTB Account to verify estimated tax payments, since claiming the wrong amount of estimated tax payments is the top taxpayer error and errors may delay refunds or cause taxpayers to get tax bills after they file.
ReadyReturn has returned, and qualified taxpayers may find that their completed tax return is waiting for them. There are two simple ways that eligible taxpayers can get ReadyReturn:
- Visit www.ftb.ca.gov and search for ReadyReturn.
- Call (800) 338-0505 and request that ReadyReturn be mailed to them.
To qualify for ReadyReturn, taxpayers must have filed a 2006 California resident return with:
- Single filing status.
- No dependents.
- No special credits.
- Standard deduction.
- And in 2007, only one employer.
Taxpayers who aren’t eligible for ReadyReturn can try CalFile.
The State’s electronic filing program, CalFile, will be offered in both English and Spanish this year. CalFile is available to taxpayers who file forms 540 2EZ, 540A, and, to a limited degree, the 540. The CalFile program accepts income of up to $310,837, itemized deductions, and some tax credits.
540 2EZ now does the math
Taxpayers can fill in their information on this calculable tax form to print and mail to FTB.
Registered domestic partners
A big change this filing season, for the 2007 tax year, is the new state law requirement that registered domestic partners (RDPs) file their state tax returns using either the married filing jointly or married filing separately filing status. Under prior state law, RDPs used the single or head of household filing (HOH) status. The new state law will not affect filing status for federal tax returns.
Standard deduction and personal exemption
The standard deduction amount for single or married filing separately taxpayers increases from $3,410 to $3,516. For joint, surviving spouse, or HOH taxpayers, it increases from $6,820 to $7,032.
The personal exemption amount for single, married filing separately, and HOH taxpayers increases from $91 to $94. For joint or surviving spouse, the personal exemption credit will increase from $182 to $188. The dependent exemption credit will increase from $285 to $294 per dependent claimed.
Franchise Tax Board tax season tips
- Who has to file? Individuals do not have to file if they are:
- Single or HOH, and their total income was less than $14,138.
- Married, and their total income was less than $28,276.
Filing requirements for those being claimed as a dependent are tied to the standard deduction. See our Website for more information.
- Federal EITC: The Earned Income Tax Credit reduces the taxpayer’s federal tax obligation, or allows a refund if no federal tax is due. To qualify, your client must have had:
- A child living with him or her, and earned less than $37,783 ($39,783 if married filing jointly.
- No qualifying children, and earned less than $12,590 ($14,590 if married filing jointly).
For more details, go to www.irs.gov and search for EITC Assistant. California has no comparable state credit.
- Electronic refund deposit: Almost 10 million taxpayers – nearly two-thirds of those who filed taxes last year – received a state tax refund averaging more than $800. If your clients use electronic refund deposit, they can even request that their refunds be electronically deposited between two different accounts, including checking, savings, IRA, or money market accounts.
- Voluntary contributions: The state tax forms list 11 charitable funds your clients can contribute to directly from their returns. Contributions made to these funds will reduce your client’s refund, or increase taxes owed. Taxpayers who contribute to any of these funds can take a charitable contribution deduction on next year’s return if they itemize their deductions.
- Paying taxes online: FTB’s Web Pay allows taxpayers to authorize a payment from their bank account on a specific date, to satisfy their return balance due or extension payment. They should pay on or before April 15 to avoid penalties and interest. Taxpayers can also pay estimated tax, or make any bill payments online. For a small fee, they can also pay their taxes with their Discover/NOVUS, MasterCard, American Express, or Visa cards. FTB also accepts payments through Western Union.
- If your clients can’t pay their taxes: They can request a payment plan online. If they owe less than $25,000 and can repay it within five years, they will generally qualify.
- If they don’t want to owe taxes: Go to the California taxes homepage at www.taxes.ca.gov and use the DE 4 Calculator, Employee’s Withholding Allowance Certificate, to compute your client’s suggested payroll withholding to closely approximate their tax liability.
- Do your clients owe use tax? California residents are required to pay state use tax on certain purchases made from out-of-state sellers, such as by telephone, over the Internet, by mail, or in person, if the seller does not collect sales or use tax, and if the buyer uses, gives away, stores, or consumes the item in California (see related article in this issue). Go to the Board of Equalization’s Website at www.boe.ca.gov for more details.
- Information in other languages: FTB continues to provide more tax information in Spanish, Chinese, Korean, and Vietnamese. We also have a Speakers’ Program, with technical subject matter experts who are available to speak at a variety of public forums statewide to educate the public on this, and other topical tax subjects.
- Phone service: If your client has a tax question at 3:00 a.m., you can keep sleeping - we provide toll-free, 24-hour automated phone service at (800) 338-0505. Or, to speak with a customer service representative, your client can call our general toll-free phone line at (800) 852-5711, from 7 a.m. to 6 p.m., weekdays except state holidays.
- Walk-in service: FTB has six regional field offices that offer walk-in service in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. For directions, visit our Website.