Electing The New California Pass-Through Entity Tax
Governor Newsom recently signed Assembly Bill 150, which creates a pass-through entity tax election for companies doing business in California. The entity tax is a workaround to the $10,000 state and local income tax deduction reported on Schedule A attached…
IRS Reduces Tesla Federal Tax Credit
Tesla sold over 200,000 cars in the U.S. last year, so beginning January 1, 2019, the law reduces the federal tax credit to $3,750. The previous maximum amount was $7,500. Tesla cars purchased between January 1st and June 30, 2019,…
AirBnB (Vacation Home) Potential Increased Tax Deductions for Owners
The IRS has announced they will issue regulations that would prohibit taxpayers from claiming a charitable contribution deduction for amounts for which the taxpayer claimed a state tax credit. Governor Jerry Brown (California) vetoed SB 539, which the Legislature had…
No More Casualty Loss Deductions
Congress eliminated the personal casualty loss deduction with the passage of the tax law last December unless the taxpayer’s loss is in a federally declared disaster. Taxpayers will no longer get tax relief through tax refunds generated by loss deductions….
Interest paid on home equity debt may still be deductible
The new tax law eliminated the deduction for interest paid on home equity lines of credit (also called home equity loans or second mortgages). But the interest paid on these loans may still be tax deductible if the loan meets…
How to Retain Property Tax Deductions
The new tax law limits property tax deductions to $10,000 and eliminates miscellaneous itemized deductions. So you may be fussing about the loss of your tax deductions, but there is an election you may be able to make to capitalize…
Should you disclose your bitcoin account to the U.S. Treasury?
U.S. citizens and residents are required to disclose foreign bank and other international financial accounts to the U.S. Treasury if the combined balance of all accounts exceeds $10,000. The penalties for failure to file start at $10,000 and can exceed…
Employee Business Expenses Still Deductible
Don’t throw away your receipts yet! Employee business expenses are still tax deductible on your California income tax return. The new federal tax law eliminated the deduction for out-of-pocket employee business expenses. But state law still allows the deduction. The…
Where did the marriage penalty go?
The federal “marriage penalty” affects couples whose combined taxable income exceeds $600,000. These couples pay 37% tax on income that exceeds this amount. However, two individuals filing separate returns would not be taxed at 37% until their combined income exceeds…
You may be under-withheld!
The new tax law lowered income tax rates and eliminated exemptions. It also reduced the state income tax deduction to $10,000 (max) and eliminated deductions for employee business expenses not reimbursed by an employer. IRS withholding tables issued on…