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Advice for Taxpayers: Do It Yourself What Californians Need to Know this Tax Season

January 2, 2002

Advice for Taxpayers: Do It Yourself
What Californians Need to Know this Tax Season

It's true, millions of Californians can do their tax returns themselves, take advantage of tax credits to lower their taxes, and use technology to perform their tax transactions, according to the Franchise Tax Board (FTB).

State Controller and Chair of the FTB Kathleen Connell states: “People think about doing their own taxes as being a fairy tale. Using my simplified tax form, the 540 2EZ, most people can complete their own tax returns in minutes. Do your taxes yourself, it's really that simple.”

Simplified Tax Filing

Use the 540 2EZ. About the size of a postcard, the 2EZ is a simpler short form involving fewer calculations. This return requires only three pieces of tax information (wages, interest, withholding) and takes around 10 minutes to complete since most of the math calculations have been incorporated into special tables. Starting in February, taxpayers can complete the Form 540 2EZ on-line.

Tax Credits

Solar Energy Credit - This is a new credit available to taxpayers who purchase and install a solar energy system. The credit is the lesser of 15 percent of the cost of the system or $4.50 per watt of generating capacity.

Child and Dependent Care Expenses Credit - This credit provides up to $907 for taxpayers who pay for dependent care expenses for gainful employment purposes. The California credit is a percentage of the federal credit.

Long-Term Care Credit - This credit equals $500 for taxpayers who are eligible caregivers of qualified individuals who need long-term care for 180 days or more. A taxpayer generally qualifies for this credit if the individual needing the care is the taxpayer, the taxpayer's spouse or the taxpayer's dependent.

Teacher Retention Credit - This credit, exclusively for teachers, ranges up to $1,500 depending on the credentialed teacher's years of service.

What's New on the Tax Forms

  • FTB has developed a new nonresident tax return, the California Form 540NR short form. Designed for nonresident and part-year residents whose income is made up mostly of wages, this form greatly simplifies California tax filing.
  • A new voluntary contribution fund debuts on this year's tax return: Lupus Foundation of America, California Chapters Fund.
  • FTB has revised its special edition of the California Form 540A booklet for seniors. This booklet has a larger type size and emphasizes items of importance to seniors.

Where to Get Tax Assistance

Taxpayers can visit FTB's Website at www.ftb.ca.gov to get a quick overview of important information for this year's taxes, get answers to frequently asked tax questions, take advantage of fillable forms, and download current and prior year tax forms.

FTB's automated phone service at (800) 338-0505 is available anytime to request both state and federal tax forms, get answers to frequently asked questions, and to check on payments, balances due, or refunds. FTB prints the menu to navigate the automated phone system on the back of the tax booklets.

Free Tax Help Available Through VITA Centers

For taxpayers who want help completing their tax forms, the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs staff more than 1,100 volunteer centers statewide. They offer free tax assistance to low-income, senior, and disabled individuals. Bilingual tax assistance is available in some locations for non-English speaking individuals. For the nearest location, call FTB or visit our Website.

Not Everyone Must File

FTB bases the requirement to file a California tax return on income amounts and special exemptions for dependents and seniors. Since thousands who file each year do not have to, FTB encourages taxpayers to refer to the tax booklet instructions to determine if they have a filing requirement.

Editor's Note: Please visit our Website after January 15 or call for a listing of VITA sites in your area.