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When searching for 'taxes', I came across the Google search 'People also ask' and found some quick answers I found to be discouraging. Are California taxes really that bad? California taxes are known for being among the highest in the country. The state gives residents a break when it comes to inheritance and estate taxes and property taxes aren't particularly high, but income tax rates are significant, as are sales tax rates according to thebalance.com research. ... California Tax Deductions The state's standard deduction is a fairly decent $4,601 per person if you're single, increasing to $9,202 if you're married or in a registered domestic partnership (RDP) and filing jointly, or head of household or qualifying widow(er). California Sales Tax California's state level sales tax rate remains the highest in the nation as of 2018 at 7.25%. And this is actually a decrease from what it once was7.5% until Proposition 30 expired. Combined with local sales taxes, the rate can reach as high as 10.25% in some California cities, although the average is 8.66% as of 2020. California's average local tax rate is 1.41% as of 2020 and the highest local tax rate comes in at 2.5%. Other California State Excise Taxes California is known for tacking additional excise taxes onto certain products. You'll pay an extra 33% if you buy fruit from a vending machine here.5 And, like most states, California also adds an additional tax to cigarettes and gasoline. A pack of cigarettes will cost you an extra $2.87 here. The tax used to be just 87 cents, but legislation ramped it up by an additional $2 on April 1, 2017.6 Gasoline will run you an additional 12 cents a gallon under legislation that began increasing the tax incrementally effective November 1, 2017.7 That's the highest rate in the country. As of 2020, the average California driver pays $2.93 per gallon compared to the national average of $1.90. How much will I make in California after taxes? If you make $55,000 a year living in the region of California, USA, you will be taxed $11,394. That means that your net pay will be $43,606 per year, or $3,634 per month. Your average tax rate is 20.72% and your marginal tax rate is 37.65%. according to Neuvoo income tax calculator. For many Californians, this places them in the low income bracket causing financial hardship. Most Californians live paycheck to paycheck hoping that all their housing and utilities can be paid with their take home income. It doesn't surprise that Californians are moving out of state at record numbers.

Are you ready for tax season? We are. Call to make a virtual appointment today.Are you ready for tax season? We are. Call to make a virtual appointment today.

IRS warns people about a COVID-related text message scam! The IRS is warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment. Here’s how this scam works... People get a text message saying they have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment Continue here to accept this payment " The text includes a link to a phishing web address. This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it. Here’s what people should do if they receive this message Anyone who receives this scam text should take a screenshot and include the screenshot in an email to [email protected] with the following information: Date/time/time zone that they received the text message The phone number that received the text message The IRS doesn’t send unsolicited texts or emails. The agency will never demand immediate payment using a gift card, prepaid debit card or wire transfer or threaten to have a taxpayer arrested.

Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year. The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week. Paper checks will begin to be mailed tomorrow, Wednesday, Dec. 30. The I...Continue reading

The IRS and its Security Summit partners are warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment. Here’s how this scam works People get a text message saying they have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment Continue here to accept this payment " The text includ...es a link to a phishing web address. This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it. Here’s what people should do if they receive this message Anyone who receives this scam text should take a screenshot and include the screenshot in an email to [email protected] with the following information: Date/time/time zone that they received the text message The phone number that received the text message The IRS doesn’t send unsolicited texts or emails. The agency will never demand immediate payment using a gift card, prepaid debit card or wire transfer or threaten to have a taxpayer arrested.

Nearly four million people are being sent their Economic Impact Payment by prepaid debit card, instead of paper check. The determination of which taxpayers receive a debit card was made by the Bureau of the Fiscal Service, another part of the Treasury Department that works with the IRS to handle distribution of the payments. These Economic Impact Payment Cards arrive in a plain envelope from Money Network Cardholder Services. The Visa name will appear on the front of the car...d; the back of the card has the name of the issuing bank, MetaBank, N.A. Information included with the card will explain that the card is an Economic Impact Payment Card. Those who receive Economic Impact Payment by prepaid debit card can do the following without any fees: Make purchases online and at any retail location where Visa is accepted Get cash from in-network ATMs Transfer funds to their personal bank account Check their card balance online, by mobile app, or by phone This free, prepaid card also provides consumer protections available to traditional bank account owners, including protection against fraud, loss, and other errors. The card will come with instructions on how to activate and use it. Learn more at www.eipcard.com. See more

The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. This also goes for the California state returns as well. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, cor...porations and other non-corporate tax filers as well as those who pay self-employment tax. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

Typically, I would blog about taxes, since that is what we do here at Packey Law Corporation. However, with the spread of the Coronavirus across the globe, it is no wonder why people are concerned. Our economy has been affected, our social norms are affected, and filing tax returns have decreased in the past couple weeks so I can't help but take a day to blog about the Coronavirus and what we can all do to help stop the spread of this deadly virus. "The U.S. Centers for Disea...se Control and Prevention (CDC) recommends sanitizing frequently used objects to help prevent the spread of the deadly virus. That includes your smartphone. Your smartphone, as it turns out, is covered with 10 times the amount of bacteria found on a toilet seat, says a study from the University of Arizona." As the U.S. Centers for Disease Control and Prevention (CDC) continues to provide advice for lowering your risk of catching the Coronavirus such as washing your hands frequently, not touching your face, disinfect commonly used areas and items. Wiping down door handles, your keys, and yes, your cell phones will help as well. When you're out in public, take precautions by taking hand sanitizer with you and/or hand wipes so you can clean your hands often. Yahoo Health 3.5.2020

Reduced Refund: The Department of Treasury's Bureau of the Fiscal Service (BFS) issues IRS tax refunds and Congress authorizes BFS to conduct the Treasury Offset Program (TOP). Through the TOP program, BFS may reduce your refund (overpayment) and offset it to pay: Past-due child support;... Federal agency non-tax debts; State income tax obligations; or Certain unemployment compensation debts owed to a state (generally, these are debts for (1) compensation paid due to fraud, or (2) contributions owing to a state fund that weren't paid). You can contact the agency with which you have a debt to determine if your debt was submitted for a tax refund offset. You may call BFS's TOP call center at the number below for an agency address and phone number. If your debt meets submission criteria for offset, BFS will reduce your refund as needed to pay off the debt you owe to the agency. Any portion of your remaining refund after offset is issued in a check or direct deposited as originally requested on the return.

When I came in ready for the work day, I came across an article on Kiplinger highlighting the 20 IRS red flags to prompts an audit by Joy Taylor, Editor. Although this article goes into some length about the 20 red flags, I agree with the majority of the article. I’d like to discuss the three most common red flags we see that prompts an audit. 1. Differences in tax returns from one year to the next. This often happens when people change tax preparers. Although you would thin...k that a tax return can’t have that many changes, you’d be surprised. There is nothing wrong with changing tax preparers, just make sure that you bring the last year’s return to the new tax preparer so they can review and keep with the similar return preparation. 2. Taking higher than average deductions including charitable donations. Most people want to get the most out of their taxes such as higher refunds. In 2018 the new tax reform provided a higher standard deduction for everyone. This left millions of taxpayers with a better tax refund without having to itemize. Although, some saw a lesser refund than from years past. Many self-employed taxpayers were delighted to see that they owed less, while some others owed more. The purpose of the tax reform was to level out the deductions. Most people now just use the standard deduction rather than itemizing. 3. Business deductions are one of the largest issues we see prompting audits for self employed individuals. The reason for this is the large amount of deductions. Most people are in business for themselves to make money, not to break even or worse, have a loss. Many start up businesses will operate the first three to five years at a loss or breaking even. After that, it is assumed that if the business is operating properly, it will start showing an increase in revenue. If the deductions result in a low net income, this is a red flag that will be very likely to prompt an audit. The IRS questions, why would a person be in business to break even or to work at a loss. Not likely. See more

IRS Phobia IRS phobia is a real thing that we see more often. Phobia is defined as: "A phobia is a type of anxiety disorder defined by a persistent and excessive fear of an object or situation. The phobia typically results in a rapid onset of fear and is present for more than six months." People having IRS phobia tend to find themselves in a situation that they feel is beyond themselves or beyond what they can mentally handle. We have seen people refuse to open letters from ...Continue reading

It’s a good idea for people to find out if they should file using the standard deduction or itemize their deductions. Deductions reduce the amount of taxable income when filing a federal income tax return. In other words, they can reduce the amount of tax someone owes. Individuals should understand they have a choice of either taking a standard deduction or itemizing their deductions. Taxpayers can use the method that gives them the lower tax. Due to tax law changes in the la...st couple years, people who itemized in the past might not want to continue to do so, so it’s important for all taxpayers to look into which deduction to take. Here are some details about the two methods to help people understand which they should use: Standard deduction The standard deduction amount adjusts every year and can vary by filing status. The standard deduction amount depends on the taxpayer’s filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don't itemize deductions are entitled to a higher standard deduction. Itemized deduction Taxpayers may need to itemize deductions because they can't use the standard deduction. They may also itemize deductions when this amount is greater than their standard deduction. Taxpayers who itemize file Schedule A, Form 1040, Itemized Deductions or Form 1040-SR, U.S. Tax Return for Seniors. A taxpayer may benefit by itemizing deductions for things that include: State and local income or sales taxes Real estate and personal property taxes Mortgage interest Mortgage insurance premiums Personal casualty and theft losses from a federally declared disaster Donations to a qualified charity Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income Individual itemized deductions may be limited. Form 1040, Schedule A Instructions can help determine what limitations may apply.

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With tax season beginning soon, the Internal Revenue Service reminds taxpayers that choosing to have their tax refund directly deposited into their checking or savings account is the fastest way to get their money. It’s simple, safe and secure. Taxpayers can also get their refund deposited into one, two or three different accounts, if desired. Eight out of 10 taxpayers get their refunds by using direct deposit. The IRS uses the same electronic transfer system to deposit tax r...efunds that is used by other federal agencies to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts. Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. And it saves taxpayer money. It costs more than $1 for every paper refund issued, but only a dime for each direct deposit. See more

As tax filing season approaches, taxpayers should remember there are things they can do before the end of the year. Doing these will help people get ready for the upcoming tax filing season. Here are a few things taxpayers still have time to do this year: Donate to charity For those who plan to itemize deductions, there is still time to make a 2019 donation. Taxpayers who itemized in the past should remember that the standard deduction has increased. This may limit or elimina...te the itemized deductions for many taxpayers. Report an address change Taxpayers who moved should notify the IRS of their new address. They should also remember to notify the Social Security Administration of any name change. Renew expiring ITINs Certain individual taxpayer identification numbers expire at the end of this year. Taxpayers can visit the ITIN page on IRS.gov for more information on which numbers need renewal. Connect with the IRS Taxpayers can use social media to get the latest tax and filing tips from the IRS. The IRS shares information on things like tax changes, scam alerts, initiatives, tax products and taxpayer services. These social media tools are available in different languages, including English, Spanish and American Sign Language. Find information about retirement plans IRS.gov has end-of-year find tax information about retirement plans. This includes resources for individuals about retirement planning, contributions and withdrawals. Taxpayers who are 70 and over can still take a required minimum distribution from traditional IRA, SIMPLE IRA, SEP IRA, or retirement plan accounts. Taxpayers who reached 70 in 2019 can wait until April 1, 2020, to receive their first required minimum distribution. Contribute salary deferral Taxpayers can make a deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the limit for 2019. Think about tax refunds Taxpayers should be careful not to expect getting a refund by a certain date. This is especially true for taxpayers who plan to use their refund when making major purchases or paying bills. Just as each tax return is unique and individual, so is each taxpayer's refund. Taxpayers can take steps now to make sure the IRS can process their return next year.

For many shoppers, Cyber Monday kicks off the holiday season. For some online thieves, ‘tis the season to take advantage of having so many people shop online at once. They steal shoppers’ personal information and package it as their own. Some might call this a total Grinch move. It is advised for shoppers to take these simple steps to protect their identities, financial accounts, computers and mobile devices. People should: Shop at sites where the web address begins https;... the s is for secure communications over the computer network. This is an added layer of protection when sharing credit card numbers for a purchase. Note: scam sites also can use https, so shoppers should ensure they are shopping with a legitimate retailer. Not shop on unsecured public wi-fi. This helps to prevent thieves from eavesdropping. Instead, use secure home wi-fi with a password. Use security software for computers and mobile phones, and keep it updated. Make sure anti-virus software has a feature to stop malware and there is a firewall that can prevent intrusions. Not hand out personal information. Phishing scams, imposter emails, calls and texts are the number one way thieves steal personal data. Not open links or attachments on suspicious emails. Use strong, unique, yet easily remembered passwords are safest for online accounts. Use two-factor authentication whenever possible. Many email providers and social media sites offer this feature to help prevent thieves from easily hacking accounts. Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones.

The Internal Revenue Service wants small business owners who are employers to know that the Electronic Federal Tax Payment System has features that can help them in meeting their tax obligations. EFTPS can help employers whether they prepare and submit payroll taxes themselves or if they hire a payroll service provider to do it on their behalf.

Wrapped up a successful tax season. Gearing down a little. Resolution is gearing up.Wrapped up a successful tax season. Gearing down a little. Resolution is gearing up.