California College Access Tax Credit

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Under bills SB 174 and SB 798 signed by Gov. Jerry Brown in September 2014, California introduced a creative way to increase funding for the Cal Grant B program, which provides money for books and living expenses to low-income college students. Contributions to the CATC (College Access Tax Credit) Fund are eligible for a federal charitable contribution deduction as well as California tax credit.  The amount of the California tax credit for years 2014-2016 is as follows:

60% for contributions during 2014

55% for contributions during 2015

50% for contributions during 2016

Since taxpayers are not allowed a deduction and a credit for the same contribution, any charitable deduction made to the CATC Fund claimed on a taxpayer’s federal income tax return must be added back as a state […]

Affordable Care Act Employer Reporting Requirements for 2015

As part of the continued roll out of the Affordable Care Act, beginning in 2015 large employers must file Forms 1094-C and 1095-C with the IRS.  A large employer is typically one with 50 or more full-time and full-time equivalent employees.  The information returns are due by February 29, 2016 or March 31, 2016 if filing electronically.

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns


  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage


Even though employers with 50 to 99 full-time employers are not subject to the employer mandate for health insurance coverage until 2016, they are still required to comply with the reporting requirements for 2015.  Additional information can be found on IRS.gov.

By |August 18th, 2015|Categories: Business Operations, Business Tax, IRS|Tags: , , , , , , , , , , |Comments Off on Affordable Care Act Employer Reporting Requirements for 2015

Significant Increase on Penalty for Information Return Failures, effective for 2015 Forms

As a result of new legislation (the “Trade Preferences Extension Act of 2015,” passed by congress and signed by President Obama into law on June 29, 2015), penalties for failure to file information returns or to provide payee statements have been increased significantly.   The new penalties are effective for 2015 forms that are due in early 2016.

Under Internal Revenue Code (IRC) Sections 6721 and 6722, the penalty applies to both failing to timely file a correct information return with the IRS (IRC Section 6721), and failing to furnish the payee a statement (IRC Section 6722).  A penalty can be abated, however, if such failure is due to reasonable cause and not to willful neglect under the IRC Section 6724.

The most commonly used information returns […]

By |August 7th, 2015|Categories: Accounting & Bookkeeping, Business Operations, Business Tax, Individual Tax, IRS|Tags: , , , , , , , , , , , , |Comments Off on Significant Increase on Penalty for Information Return Failures, effective for 2015 Forms

New Escrow Closing Disclosure (CD) Replaces Settlement Statement (HUD-1)

New escrow disclosure forms have been introduced in the hope that they will help simplify the complex process of taking out a loan.  The Consumer Financial Protection Bureau (CFPB) refers to the new disclosure forms as the “Know Before You Owe” forms.  The new disclosure rules grew out of the Dodd-Frank Act requirements that addressed two sets of disclosures that consumers usually receive under the Truth in Lending Act (TILA) and Real Estate Settlement Practices Act (RESPA) in connection with application for and closing of mortgage loans.

The new “Closing Disclosure” replaces the Housing and Urban Development settlement statement (HUD-1) and final Truth in Lending (TIL) statement that must be provided to the consumer at least three business days prior to loan closing.

The new escrow disclosure […]

IRS Updates Private Delivery Services

The IRS has updated their list of private delivery services for the first time in over ten years. The update has added three FedEx and one UPS service to the list and removed five discontinued services that were previously acceptable for the timely mailing equals timely filing/paying rule (Sec. 7502).

There are only 15 delivery services that taxpayers can use (outside of the post office) that will satisfy the mailbox rule. These services are provided by FedEx and UPS only, the complete list can be found here. This change is effective as of May 6, 2015.

By |June 9th, 2015|Categories: Business Tax, Individual Tax, IRS|Tags: , , , , , , , , |Comments Off on IRS Updates Private Delivery Services
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