What's New for 2009?
During the past year, we have made changes to our online applications in order to make tax filing easier for California taxpayers and tax professionals. Check out our improved technology available and tips on how to navigate successfully through the next few months.
Improved Technology Options
We improved MyFTB Account to make it even easier to use. These improvements include:
- An email reminder service in which taxpayers can sign up to receive an email approximately two weeks prior to an estimated tax payment due date.
- A customer survey offered to taxpayers upon exiting MyFTB Account.
- Links to other services offered by FTB such as Web Pay, Refund Status, and Electronic Installment Agreement.
ReadyReturn is back and qualified taxpayers may find that their completed tax return is waiting for them. This year we’ve expanded eligibility and nearly 1.9 million taxpayers qualify. There are two simple ways that eligible taxpayers can get ReadyReturn:
- Visit ftb.ca.gov and search for ready return.
- Call 800.338.0505 and request that we mail their ReadyReturn to them.
To qualify for ReadyReturn, taxpayers must have filed a 2007 California resident return with all of the following:
- Single or head of household filing status.
- No more than five dependents.
- No credits other than the nonrefundable renter’s credit.
- Standard deduction.
- Only one employer in 2008.
Taxpayers who aren’t eligible for ReadyReturn can try CalFile. Crossing over from one application to the other is easy this year, with links available in both applications.
There are several changes to CalFile this year:
- CalFile now checks all taxpayers for ReadyReturn eligibility and offers them the option to switch to ReadyReturn, when they qualify and have a ready return.
- Taxpayers now have 30 minutes to complete each page in CalFile.
- Up to 10 dependents may now be claimed on the return.
- Payment and refund details are provided on the confirmation page.
Beginning January 1, 2009, taxpayers are required to remit payments electronically when certain conditions are met.
This new law requires individuals to remit all future payments electronically once they meet one of the following:
- Make an estimated tax or extension payment (by check or electronic method) over $20,000 for a taxable year beginning on or after January 1, 2009.
- File an original return with a tax liability over $80,000 for a taxable year beginning on or after January 1, 2009.
Fiduciaries, estates, and trusts are not required to make payments electronically, regardless of the amount owed.
Unlike corporations, there is no registration process for individuals subject to the mandatory e-pay law.
On December 1, 2008, we sent courtesy letters (see an example) to taxpayers who made an estimated tax payment in 2008 that was near or above the new mandatory e-pay threshold amount ($20,000). The letter informed these taxpayers of the law change, and that they may meet the requirement for mandatory e-pay in 2009.
Our form locator will be available soon, allowing you to find the main tax forms you need. The locator divides our tax forms in to two categories: individual tax forms and business tax forms. This makes it easier to find the tax forms you're looking for.
540 2EZ Does the Math
Taxpayers can fill in their information on this calculable tax form to print and mail to FTB.
FTB 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 $14,845.
- Married and their total income was less than $29,690.
Filing requirements for those being claimed as a dependent are tied to the standard deduction. More information is available within our frequently asked questions, What are the California Standard Deductions?
Standard Deduction and Personal Exemption
The standard deduction amount for single or married filing separately taxpayers increased from $3,516 to $3,692. For joint, surviving spouse, or head of household taxpayers, it increased from $7,032 to $7,384.
The personal exemption amount for single, married filing separately, and head of household taxpayers increased from $94 to $99. For joint or surviving spouse, the personal exemption credit increased from $188 to $198. The dependent exemption credit increased from $294 to $309 per dependent claimed.
Married couples must file their 2008 California income tax returns using either the married/RDP filing jointly or married/RDP filing separately filing status. Same-sex marriages performed in California on June 16, 2008through November 4, 2008, have been recognized as valid marriages for California purposes.
Proposition 8 was approved by the voters on November 4, 2008, and it provides that “only marriage between a man and a woman is valid or recognized in California.” Lawsuits challenging Proposition 8 have been filed. To find current state income tax information related to same-sex couples, go to our website and search for same-sex married couples or get the new FTB Pub. 776, Tax Information for Same-Sex Married Couples.
Federal Earned Income Tax Credit (EITC)
The EITC 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 them, and earned less than $38,646 ($41,646 if married filing jointly.
- No qualifying children, and earned less than $12,880 ($15,880 if married filing jointly).
For more details, go to http://www.eitc.irs.gov/central/main/. California has no comparable state credit.
Electronic Refund Deposit
More than 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 request that their refunds are electronically deposited between two different accounts, including checking, savings, IRA, or money market accounts.
The state tax forms list 15 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. There are four new funds this year:
- California Ovarian Cancer Research Fund.
- Municipal Shelter Spay Neuter Fund, CA.
- California Cancer Research Fund.
- ALS/Lou Gehrig’s Disease Research Fund.
For 2008, all funds have been assigned a new three-digit code. Each fund now has the same code regardless of the form, and the assigned codes will not change in future years.
Paying Taxes Online
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 pay estimated tax or make any bill payments online. They can also schedule payments up to one year in advance. For a small fee, they can pay their taxes with their Discover/NOVUS, MasterCard, American Express, or Visa cards. FTB also accepts payments through Western Union.
If Your Clients File Electronically and Owe Money
Remind them NOT to mail a copy of their electronically filed return with their payment. Each year, thousands of paper copies of electronically filed returns are submitted with payments. This causes delays in processing since the paper copy is processed as a duplicate return and needs manual intervention.
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 Your Clients Don’t Want to Owe Taxes
Go to our homepage at ftb.ca.gov and search de 4. Use this calculator 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. Use tax applies to purchases from out-of-state or foreign vendors. In general, your clients must pay California use tax on these purchases (made on the Internet, by telephone, by mail, or in person) if both of the following occur:
- The vendor does not collect California sales or use tax.
- Your client uses, gives away, stores, or otherwise consumes the item in this state.
Information in Other Languages
FTB continues to provide 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.
If your client has a tax question at 3 a.m., they can call our 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.
FTB has six regional field offices that offer walk-in service in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. Go to ftb.ca.gov for directions.