November 2019 Archives

OTA Reverses FTB Assessment of Out-of-State Contractor Income

The California Office of Tax Appeals (OTA) recently reversed a Franchise Tax Board (FTB) proposed assessment of a Texas-based independent contractor working for a California-based company. The OTA found that income reported to the contractor on a Form 1099-MISC did not have a California source because the end clients were located out-of-state, and therefore the contractor had no requirement to file a nonresident California return. To read the decision in full, click here.

How Will California's AB 5 Affect My Business?

Following the California Supreme Court decision in Dynamex Operations v. Superior Court, 4 Cal. 5th 903 (2018), which identified the "ABC Test" for worker classification for the purposes of California's wage and hour determinations under the IWC Wage Orders, and now with the passage and signing into law of Assembly Bill 5 (Gonzales) (2019 Cal ALS 296, 2018 Cal AB 5, 2019 Cal Stats. ch. 296.), which extended the Dynamex ABC Test to apply in workers' compensation insurance and EDD payroll tax determinations of status, we have been inundated with questions and issues arising out of these significant changes to California worker classification law. I have also noticed that California businesses and some experienced California practitioners are misinformed, or simply mistaken, about some elements of AB 5 and its potential effects on California businesses, independent contractors, and employees.

IRS Announces 2020 Annual Inflation Adjustments For Over 60 Tax Provisions

The Internal Revenue Service (IRS) recently announced changes to tax rate schedules and certain tax provisions to adjust for inflation in tax year 2020. The standard deduction for taxpayers who are married filing jointly will increase to $24,800; for taxpayers who are single or married filing separately, the deduction will increase to $12,400; and for taxpayers who are heads of households, the deduction will increase to $18,650. The Alternative Minimum Tax exemption amount for tax year 2020 will increase to $72,900 and begin to phase out at $518,400 (for married couples filing jointly, these amounts increase to $113,400 and $1,036,800, respectively).

FTB Top Tax Debtors Owe California Over $581 Million

The Franchise Tax Board (FTB) recently published its updated lists of California's top 500 individual and top 500 business tax debtors, who now collectively owe the state more than $581 million in income tax. Since October 2007, this list is updated twice annually. Taxpayers who receive notice of the FTB's intent to include them on the list and then make arrangements to pay their tax debt are removed from the publication.

Contact the Law Office of Williams & Associates

For more information about our tax law services, or to discuss your tax matter, call our Sacramento office at (916) 488-8501 or toll free at (800) 684-7147. You may also send us an inquiry via email.

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