| Your Last
Chance To Clear Up Your Past California Taxes (And Save A Lot Of Money
Too) |
| By Don
D. Nelson, C.P.A., Attorney |
| Beginning
February 1, 2005, California has agreed to forgive any penalties
and other charges (which become very high over time) you might owe
on unpaid taxes from years before 2003. To qualify for this forgiveness
you must apply for amnesty prior to March 31, 2005.
The amnesty
will cut your tax bill if you come clean about taxes you owe, income you
did not report or returns you did not file. If you fail to apply
for amnesty during that short time period, California will impose large
additional penalties… even though you were not aware of the error on an
old tax return. |
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| You may not
be aware you still owe taxes in California if you have lived abroad for
years. These amounts can be owed for amounts earned in California for which
you did not file returns or amounts assessed for which the notices have
never reached your new home outside of the USA. The state records
go back many years. In one situation the state went all the way back
to 1977. You should as soon as possible contact the Franchise Tax
Board (for income and franchise taxes) or the Board of Equalization (for
sales and use taxes) to see if any taxes are owed. If the state shows
you owe money, you should consider the amnesty program and file amended
or prior year unfilled returns prior to April 1, 2005.
While the amnesty
application is reasonably simple, there are complicated aspects that could
have consequences to you if it is not prepared correctly. The form to use
for your personal taxes is FTB 2300PIT and for your business and Franchise
tax FTB 2300BE. They can be downloaded at www.ftb.ca.gov -California’s
amnesty program does not apply to payroll, employment, property taxes or
other miscellaneous taxes. If you want help with this process,
a tax professional can assist you. It sometimes takes time to
determine if any California taxes are owed when you check with the Franchise
Tax Board. |
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| However, since
the time window is short, you should take action immediately because it
is also in the middle of most tax professional’s “busy season”.
Don D. Nelson
is an attorney and C.P.A. who has assisted expatriates and Americans
living abroad with their U.S. and California (as well as other states)
taxes for the last 29 years. He is an expert on the U.S. tax
benefits and pitfalls involving Americans and U.S. Citizens living in other
countries. He has prepared U.S. expatriate tax returns for hundreds
of expatriates around the world. His website is at www.taxmeless.com
- His phone in the US is (949) 481-4094 and his fax (949) 218-6483. |
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