New Sales and Use Tax Rate
Effective October 1, 2011
There is only one tax rate change effective October 1, 2011

Voters in the city of Mt. Shasta, located in Siskiyou County, California have approved a one-quarter percent (.25%) district tax, the Mt. Shasta Library Transactions and Use Tax, that is effective October 1, 2011.  The new rate applies only to transactions that occur within the city’s incorporated limits.

The table below summarizes the new sales and use tax rate.

Don’t forget, Monday, 4/18/11 is the final day to file your taxes for the 2010 tax year.

Procrastinators have an extra three days to work on their taxes this year because the usual April 15 file date is Emancipation Day, a holiday observed in Washington, D.C.,  to mark the anniversary of the signing of the Compensated Emancipation Act, which president Abraham Lincoln signed on April 16, 1862. The act freed several thousand slaves in the District of Columbia.

There are a lot of different options available to help taxpayers file and pay taxes on time, including the option of filing for an extension.

Those filing on Monday should make sure they have everything prepared and ready, to prevent any delays that might cost them in fees and penalties.

New Sales and Use Tax Rates
Effective April 1, 2011

Voters in 13 cities in California have approved new district taxes (transactions and use taxes) that became effective April 1, 2011.  The new rates apply only within each city’s incorporated limits. The tax rates outside the incorporated city limits will remain the same.

In addition, the City of Scotts Valley Transactions and Use Tax (SVGF) will end on March 31, 2011, resulting in a tax rate decrease within the city limits of Scotts Valley.

In Sonoma County, the countywide Sonoma County Open Space Authority (SCOS) 0.25 percent district tax will end on March 31, 2011. Beginning April 1, 2011, the Sonoma County Agricultural Preservation & Open Space District (SAPD) 0.25 percent district tax will take effect. Therefore, the tax rates throughout Sonoma County (exception: City of Santa Rosa) will remain the same.

The table below summarizes the new sales and use tax rates.

District Tax Area	County	Acronym	Code	Old Rate	New Rate
City of San Leandro	Alameda	SLGF	238	9.75%	10.00%
City of Union City	Alameda	UCGF	240	9.75%	10.25%
City of Concord	Contra Costa	CNCD	242	9.25%	9.75%
City of El Cerrito	Contra Costa	ELCT	244	9.75%	10.25%
City of Placerville	El Dorado	PLST	246	8.50%	8.75%
City of Eureka	Humboldt	ERST	248	8.50%	9.00%
City of Santa Monica	Los Angeles	STMA	250	9.75%	10.25%
City of South El Monte	Los Angeles	SEMT	252	9.75%	10.25%
City of Novato	Marin	NOVT	254	9.00%	9.50%
City of Marina	Monterey	MRNA	255	8.25%	9.25%
City of Tracy	San Joaquin	TRCY	257	8.75%	9.25%
City of Scotts Valley	Santa Cruz	SVGF	216	9.25%	9.00%
County of Sonoma	Sonoma	SAPD	259	9.00%	9.00%*
City of Santa Rosa	Sonoma	SRGF	264	9.25%	9.50%
City of Wheatland	Yuba	WTLD	265	8.25%	8.75%

*The rate is higher in the following cities which have additional district taxes and their codes have changed: Sebastopol (260), Cotati (261), Rohnert Park (262), and Santa Rosa (264).

For More Information

• Visit the State's City and County Tax Rates page (www.boe.ca.gov/sutax/pam71.htm) or call our office 805.389.7300

The Small Business Jobs Act of 2010 (2010 Jobs Act) requires information reporting for rental property expense payments of $600 or more that are made after December 31, 2010. This reporting requirement is one of several revenue raising provisions that are included to offset the $12 billion cost of tax relief provided by the legislation.

Generally, if a person (payor) makes payments to another person (payee) in connection with the payor’s trade or business totaling $600 or more during a calendar year, the payor is required to send the appropriate information return to the IRS and the payee. Under the 2010 Jobs Act, any individual taxpayer who receives real estate rental income is considered to be engaged in a “trade or business” for purposes of the information reporting requirements. This is true even for individuals engaged in a “passive investment activity” under general tax rules and principles.

The reporting obligation applies if the total of all payments made by the payor in any tax year is $600 or more, even though the amount for any class of payment by itself is less than $600. Payments that must be reported include:
•    salaries, wages, commissions, fees, incentive awards and other forms of compensation; and
•    interest, rents, royalties, annuities, pensions, and other gains, profits and income.
Form W-2, Wage and Tax Statement, is the information return used to report payments to employees, whereas Form 1099-MISC, Miscellaneous Income, is generally used to report other types of payments.

An exemption from the filing requirement is extended to members of the uniformed services or employees of the intelligence community who rent out their principal residence on a temporary basis. In addition, the IRS is authorized to issue regulations that exempt individuals whose rental income falls below a minimum threshold or who meet certain hardship standards. Failure to comply with these requirements may result in the imposition of penalties, including penalties for failure to file the information return and failure to furnish payee statements.

The new information reporting rules may increase the paperwork and filing burden, as well as the related costs, for your rental property. Because the rules apply to payments made after December 31, 2010, we would like to discuss recordkeeping and other compliance issues as soon as possible. Please call our office at your earliest convenience to arrange an appointment.

The Internal Revenue Service issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Obama And GOP Compromise On Two-Year Extension Of Most Tax Cuts

President Obama announced on December 6 an agreement with the GOP to extend the Bush-era individual and capital gains/dividend tax cuts for all taxpayers for two years. The White House-brokered plan would also provide for a one-year payroll tax cut, 100 percent bonus depreciation for 2011, extenders relief, and a top federal estate tax rate of 35 percent with a $5 million exclusion. The president’s package is expected to pass Congress before year-end, although certain modifications may be made to garner additional support by key Democrats.

Other than with a few exceptions, beginning January 1, 2011; all federal tax deposits must be made through EFTPS (the Electronic Federal Tax Payer System).

For those of you who are still making payroll (941/940) and other tax (1120) deposits at the bank using a  paper coupon, be aware that no 8109-B paper coupons will be accepted for 2011.

In today's heightened security-concerned world, it is important to monitor your credit reports occasionally so you will be aware of any unauthorized use of your credit file, before it runs rampant.

To help you monitor your credit usage, credit report monitoring is the basics.  Keep in mind everyone is entitled to one free credit report annually and unlimited free reports if you feel you have been a victim of identity theft, have been denied credit, are unemployed, receive welfare, or other criteria.

Attention Non-Profit organizations.

Please visit this IRS "Micro-Site"  http://www.stayexempt.irs.gov/VirtualWorkshop.aspx

The IRS introduces this site as

...created especially for 501(c)(3) organizations! Whether you are new to the world of tax exempt organizations, an old hand at managing them, or a tax professional who works with them, you will find something of interest here.

Lots of great information including the "OE Mini Courses," which are Exempt Organizations powerpoint courses to help you maintain a better organization,

Owning your own business can be very rewarding, both personally and financially. Being the sole decision-maker for this important undertaking can also be overwhelming. Business owners have many choices to make, and these choices involve tax consequences that are not always foreseen. We can help you minimize your overall tax burden by identifying and maximizing business deductions, providing guidance on substantiation of expenses, and exploring tax planning alternatives that are uniquely available to the self-employed.

Although many provisions of the recently enacted health care reform package will not be felt for a few years, there are some benefits that begin in 2010, including the $250 tax-free "donut hole" rebate for seniors. This $250 rebate is intended to help seniors bridge the Medicare coverage gap. While many federal rebate-check programs are ending -- such as the Recovery Rebate Credit and Making Work Pay Credit -- the $250 donut hole rebate has just begun to be dispersed and an estimated 4 million seniors will receive the one-time $250 rebate, with more than 300,000 individuals having already received the check.

Are you required to inform the IRS of your foreign bank accounts, business interests, gifts or inheritances?  Here, we will review the basic filing requirements that you should be aware of.   We encourage all clients to review this and discuss all foreign transactions with us to determine the proper reporting requirements.  Although tax implications may not be involved, the penalties can be severe for failure to comply with the filing requirements.