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Wednesday, January 8, 2014 – Daily News Videos to help taxpayers file in 2014 WASHINGTON — The Internal Revenue Service is offering taxpayers a number of instructional YouTube videos to help prepare their taxes for the upcoming filing season, which begins on Jan. 31. Several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. Many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. This includes the Free File partners that offer access to their software for free at irs.gov/Free File. The IRS will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file or Free File with the direct deposit option. In addition, the IRS has short and informative YouTube videos on a number of tax-related topics in English, Spanish and American Sign Language (ASL). The channels have received nearly 6.5 million views: • IRS Videos — http://www.youtube.com/irsvideos • ASL Videos — http://www.youtube.com/IRSvideos ASL • Multilingual Videos — http://www.youtube.com/IRSvideos Multilingua Specific videos that taxpayers may view to help them get ready over the coming weeks include: • Do-It-Yourself Free Tax Preparation — Helps taxpayers find free help from certified volunteers to electronically file tax returns. Taxpayers interested in helping their own communities can also watch a video to learn about becoming involved in the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs. • Do I Have to File a Tax Return? — Learn about the requirements for filing a tax return, including income limits and age, and why taxpayers may want to file even if they don't have to. • How to Get 1040 Forms — Provides tips on the quickest way to get the various 1040 forms on IRS.gov. ° Tax Scams — Offers some tips on how to protect personal information and avoid becoming a tax scam victim. • Record-keeping — Learn which financial and tax files to keep and how long to keep them. • Changed Your Name After Marriage or Divorce? — Find out what you need to do if you have changed your name before you file your tax return. • Choosing a Tax Preparer — Hear some useful tips for choosing a reputable tax preparer. 3B Federal tax filing season to open late WASHINGTON, DC — The Internal Revenue Service (IRS) has announced that the 2014 tax return filing season will open on Jan. 31. The original start date was Jan. 21 but, due to the government shutdown in October, the start of the filing season has been delayed. "The new start date allows the IRS time to test and program its tax processing systems," said Stephen DeFilippis, an enrolled agent. "The IRS has cautioned that it will not process any tax returns before Jan. 31, so there's really no advantage to filing paper returns before this date." The April 15 filing deadline will remain. As usual, taxpayers who are unable to file by the April 15 deadline can request an automatic extension of time to file by using Form 4868, which can be filed on paper or electronically. State tax filing season opens The Franchise Tax Board Tuesday announced it is accepting 2013 state tax returns. Also, FTB provides the following updates on law changes and filing services. What's New for Individuals Standard deduction: The standard deduction for single or filing separately tax statuses increased to $3,906. For joint, surviving spouse, or head of household filers, it increased to $7,812. Exemption credit increases: The dependent exemption credit increased to $326 per dependent. The personal exemption amount for single, filing separately, and head of household filers increased to $106. For joint or surviving spouses, it increased to $212. 540A discontinued: For taxpayers who file paper returns, FTB eliminated this form due to decreased use. Tax preparation software or e-filing will automatically select the appropriate tax form for the taxpayer. FTB continues to offer two types of personal income tax forms: • Form 540 (Long Form) that can be used by all tax filers • Form 540 2EZ that can be used for tax filers with simple tax filing situations such as those who typically report income wages, interest, dividends, and pensions; and take the standard deduction. Voluntary Contribution Fund: Taxpayers can contribute to one or more charitable causes directly from the state tax form. New on the 2013 tax return are the: • American Red Cross Fund • Protect Our Coast and Oceans Fund • Keep Arts in School Fund Please see FTB's tax forms for a complete listing of available charities. For more information visit ftb.ca.gov and search for Voluntary Contributions. 2013 Short Sellers Get State Tax Relief: According to an IRS Information Letter dated September 19, 2013, the IRS has determined that California taxpayers who sell their principal residences where the lender agrees to a short sale for less than what is owed on the home are relieved of incurring cancellation of indebtedness income, which may have been taxable. Instead, the amount of cancelled debt is included in the amount realized in determining gain on the sale of that residence. The IRS guidance is limited to California short sales only. The IRS guidance did not specifically address other types of real estate transactions such as non-judicial foreclosures and mortgage loan modifications. FTB's website will have updated information and FAQs soon. For more details, please visit ftb.ca.gov and search for Mortgage Forgiveness Debt Relief. California Affordable Care Act: Although this is not a new law, FTB gets questions about how the federal Affordable Care Act affects California taxes. California tax code conforms to the 2010 federal income tax rules, which excludes the value of the medical coverage provided to nondependent adult children from California gross income and allows a deduction to selfemployed individuals for health insurance premiums for nondependent adult children under age 27. For more information, please visit ftb.ca.gov and search for Affordable Care Act. Filing Information Free Do-it-Yourself Services- FTB encourages taxpayers and practitioners to explore its many self-service applications available through FTB's website: • CalFile makes filing easier- CalFile is one of FTB's free, easy-to-use efile options available to more than 6.4 million taxpayers. CalFile accepts taxpayers with income of up to $345,235, itemized deductions, and some tax credits. CalFile guides taxpayers through a simple question and answer process. It takes about 1530 minutes to complete. CalFile offers convenient features to make it easier to use including: getting an email confirmation verifying the return was filed, and having the ability to save information and come back later to finish the return. Taxpayers can also file the current year 2013 tax year return as well as the previous year, 2012. Visit FTB's website at ftb.ca.gov to access CalFile. • Free online filing in minutes- FTB's other free e-file program; ReadyReturn is for taxpayers who file simple returns. FTB uses information it already has to complete a ReadyReturn for selected taxpayers. Taxpayers who used the single or head of household filing status in the prior year, had one employer, claimed no more than five dependents, and took the standard deduction qualify for ReadyReturn.Taxpayers can visit FTB's website ftb.ca.gov to see if a ReadyReturn is completed and waiting for them. • MyFTB AccountUse this service to change a mailing address and get information about: wages, California withholding, estimated tax payments, balances due, or FTB-issued 1099 forms. Taxpayers and tax professionals must complete a one-time registration process. • Estimated tax payment schedule- For taxpayers who need to make quarterly estimate payments, the California schedule differs from federal. To avoid an estimate penalty, taxpayers must pay: • First quarter (April 15) 30 percent • Second quarter (June 15) 40 percent • Third quarter (September 15) 0 percent • Fourth quarter (January 15) 30 percent • Check Your Refund Status- After filing their 2013 tax return, taxpayers can use this service to see where their refund is. Generally, e-filed returns with refunds and requests for direct deposit are issued within 7-10 days and mailed refund checks are sent within two weeks. Paper-filed returns take longer, up to 6-8 weeks depending on the time of year the return is filed. This service is also available in Spanish. • Pay Taxes OnlineFor taxpayers who owe, try Web Pay to pay a tax return balance due or make an extension or estimate payment. Taxpayers can schedule estimated tax payments for the year, sign up for free email reminders, save their bank account number for future use, and much more. For a fee, taxpayers can pay their taxes with their American Express, Discover/NOVUS, MasterCard, and Visa cards. • Request a Monthly Payment Plan- FTB offers monthly installment payment plans to taxpayers experiencing a financial hardship. Taxpayers who owe $25,000 or less and can repay their balance owed within five years generally qualify. For qualifications and to sign up, go to ftb.ca.gov and select installment agreement. Taxpayers can also apply by phone using our Interactive Voice Response (IVR) system at 800.689.4776. • Get Answers to Frequently Asked QuestionsFind answers to questions about various tax topics such as return filing requirements, tax credits, and the eligibility requirements for the Head of Household filing status online at ftb.ca.gov. • Try Live Chat- Live Chat lets taxpayers ask an FTB representative general tax questions and get help with FTB's website. • Phone Service- FTB provides automated tollfree phone service at 800.338.0505. To speak with a customer service representative, FTB staffs its general toll-free phone line, 800.852.5711, from 7 a.m. to 5 p.m., weekdays excluding state holidays. • Field Offices- FTB has six regional field offices that provide walkin service from 8 a.m. to 5 p.m., weekdays in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. For directions, go to ftb.ca.gov and click on the Contact Us tab. • Services Available in Spanish- FTB offers many services in Spanish including forms, publications, refund status, and answers to frequently asked questions. Tax Tips • Volunteer Income Tax Assistance- Starting in February, free tax help is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly Programs (VITA/TCE). Trained volunteers at more than 1,000 sites throughout California provide free help to complete tax forms for low-income, senior, disabled, and non-English speaking persons who need to file simple federal and state tax returns. Many military bases provide this service for the U.S. Armed Forces. For information on locations throughout California, go to ftb.ca.gov and click on the free filing assistance link. • Use tax – Taxpayers may owe use tax on purchases made from out-ofstate or Internet sellers. Use tax can be reported on the California income tax return instead of filing a use tax return with the State Board of Equalization. Taxpayers can use a "look-up" table to report their use tax obligations. The estimated amount of use tax due is based on the person's adjusted gross income. For more details, visit the BOE's website at boe.ca.gov. • Federal Earned Income Tax Credit (EITC)- This is a federal incentive for low-to-moderate income individuals and families. Taxpayers earning less than $51,567 can qualify for a "refundable" credit that can total up to $6,044. "Refundable" means that taxpayers do not have to have a tax liability to get a refund check from the federal government. Taxpayers can check if they qualify by visiting the IRS website at irs.gov and searching for EITC Assistant. California has no comparable state credit.