FDIC Insurance

The standard insurance amount currently is $250,000 per depositor. The $250,000 limit is permanent for IRAs and other certain retirement accounts. The $250,000 limit is temporary for all other deposit accounts through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor.  If you have any questions regarding FDIC coverage, call 1-877-275-3342.

IRS & FTB Announce Interest Rate for Calendar Quarters Beginning July 1, 2009

The IRS has announced that the interest rates for tax overpayments and underpayments for the calendar quarter beginning July 1, 2009 will remain at 4%.  The FTB rate will be 5% through December 31, 2009.

New Car Deduction    

The IRS has announced that taxpayers who buy a new passenger vehicle in 2009 may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns. The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle. The amount of the deduction is phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers. The deduction is available for vehicles purchased after February 16, 2009, and before January 1, 2010, and may be claimed regardless of whether taxpayers itemize deductions on their returns. Taxpayers may not take this special deduction on their 2008 tax returns.

Unemployment Benefits for 2009

The IRS has announced that all or part of unemployment benefits received in 2009 will be tax free for many unemployed workers. Unemployed workers can choose to have income tax withheld from their unemployment benefit payments using Form W-4V, Voluntary Withholding Request. Withholding on these payments is voluntary and individuals who choose this option will have a flat 10 percent tax withheld from their benefits. (Unemployment benefits are tax-free for California purposes.)

California Tax Refunds

The California Franchise Tax Board (FTB) is working with the State Controller's Office to issue delayed corporation franchise and income and personal income tax refunds as quickly as possible. Individual taxpayers may check the status of their personal income tax refunds on the FTB's Web site. Individuals will need the following information to check their refund status: their Social Security number, their mailing address, the refund amount show on the return, and a compatible Internet browser and computer operating system. Refunds are processed first-come-first-served.  The latest information provided by the FTB is that the refunds will take up to 25 business days from the date of filing.  They are not required to pay any interest until 45 days after April 15.

The American Recovery and Reinvestment Act of 2009 ("the Recovery Act")

On February 17, 2009, President Obama signed into law many tax breaks for both individuals and businesses.  We will be posting more summaries of various provisions soon.

First-time Homebuyer Credit:  Taxpayers who qualify for the ffirst-time homebuyer credit and purchase a home before 12/1/09 can claim the credit on their 2008 tax returns due on 4/15/09 or on their 2009 tax return filed next year. Following changes by the recently enacted American Recovery Act, they do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10% of the purchase price up to $8,000, or $4,000 for married individuals filing separately. However, the new law does not affect people who purchased a home after 4/8/08 and before 1/1/09—the maximum credit remains 10% of the purchase price, up to $7,500 or $3,750 for married individuals filing separately, and the credit must be repaid in 15 equal annual installments beginning with the 2010 tax year.

California Refunds 

California State Controller John Chiang has announced that payment of corporate franchise/income and personal income tax refunds will be delayed by 30 days due to the State's financial situation.  If no corrective action is taken by the Governor and the Legislature, the state may have to further delay the refund payments or resort to issuing IOUs.

Required Minimum Distributions for 2009

The President signed on December 23, 2008 the tax legislation which waives the requirement to take RMDs from qualified retirement plans as well as IRAs.  The RMD for 2009 is based on the value as of December 31, 2008.  Individuals age 70 ½ and over may choose to continue taking the distribution or not withdraw any amount at all for 2009 only.  (Congress had hoped to make the change for tax year 2008, but many taxpayers had already taken out their RMD by the time this legislation made its way through Congress.)  Taxpayers who fail to take the RMD are liable for an excise tax of 50% of the amounts not distributed, so this is a 1-year reprieve.

IRS & FTB Announce Interest Rate for Calendar Quarters Beginning January 1, 2009

The IRS has announced that the interest rates for tax overpayments and underpayments for the calendar quarter beginning January 1, 2009 will decrease to 5% (from 6%).  The FTB rate will be the same, 5% through June 30, 2009.

2009 Auto Mileage Rates Increased

The mileage rate will decrease to 55 cents a mile for all business miles during 2009. The new rate for computing deductible medical or moving expenses will decrease  to 24 cents a mile. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

2009 Auto Depreciation Limits 

The IRS has announced that annual passenger auto depreciation limits for autos placed in service in 2009 will remain the same as 2008.   Please see the updated table in our Resources - Helpful Tables section.

 IRS Announces Pension Plan Limitations for 2009

The defined contribution plan limit (profit-sharing plans, SEP-IRA) will increase to $49,000 with the annual compensation limit increasing to $245,000.  Please see our updated Helpful Tables for more information.

  Social Security Announces 5.8 % Benefit Increase for 2009

Monthly benefits for social security recipients will increase 5.8% in 2009, the largest increase since 1982.  Based on that increase, the maximum amount of earnings subject to the social security tax will increase to $106,800.  Please see our Helpful Tables section of this website.

          Alternative Motor Vehicle Credit 2008 -  GM                                                                                                               

The Internal Revenue Service has certified five 2008 model year General Motors Corp. vehicles as meeting the requirements of the Alternative Motor Vehicle Credit for qualified hybrid motor vehicles. The credit amount for each vehicle is:
--Chevrolet Tahoe Hybrid (2WD) --$2,200;
--Chevrolet Tahoe Hybrid (4WD) --$2,200;
--GMC Yukon Hybrid (2WD) --$2,200;
--GMC Yukon Hybrid (4WD) --$2,200; and
--Saturn Vue Green Line --$1,550
This brings the total number of GM certified hybrid vehicles for the 2008 model year to seven. The Chevrolet Malibu Hybrid ($1,300.00) and the Saturn Aura Hybrid ($1,300.00) were previously certified.

Email Scams

Social Security Projection

The Social Security Administration's Office of the Chief Actuary (OCA) is projecting that the Social Security wage base will increase to $102,300 in 2008, and will reach $141,900 by 2016. The projections were included as part of the annual report to Congress by the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Fund programs.

Actual annual increases in the wage base are announced in October of the preceding year and are based on then-current economic conditions. As a result, the OCA's forecasts, especially the longer-range ones, are subject to change. Last year's actuarial estimate of $98,400 for the 2007 Social Security wage base was $900 greater than the actual amount of $97,500. The SSA forecasts through 2016 are as follows:

• 2008 — $102,300
• 2009 — $106,800
• 2010 — $111,600
• 2011 — $116,400
• 2012 — $121,500
• 2013 — $126,300
• 2014 — $131,700
• 2015 — $136,800
• 2016 — $141,900

                    IRS Alerts Taxpayers of Website and E-Mail Scams

The IRS has issued a warning to taxpayers regarding website and e-mail scams. Concern over the increase in websites purporting to be official websites prompted the IRS to alert taxpayers and remind them that the address for the official IRS website is www.irs.gov. The IRS warns that these phony websites look very much like the official IRS website; however, they prompt taxpayers to enter personal and financial data, which will then be used to steal the taxpayer's identity. Taxpayers are urged to closely check the address of the website. The phony addresses end with .net or .com; however, only irs.gov is the legitimate address.

The IRS further warned of e-mail phishing scams that lead the victim to one of these phony sites. Taxpayers have received e-mails, claiming to be from the IRS, advising them of a federal tax refund and directing them to open a link that takes them to one of these websites. Taxpayers are advised not to open unsolicited e-mail claiming to be from the IRS, or open any attachments or provide any personal information.

Watch Out for the Tax Scammers

The IRS does not communicate with taxpayers via email.  Watch out for emails claiming to be from the IRS instructing you to access a secure website to find out about your refund.  The website is not the official IRS website.  The website asks for social security numbers and credit and bank information.  The official "Where's My Refund" website is at:  https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp .

Electronic Tax Payment Options 

There are 2 ways that you can pay your taxes other than by manual check:

Credit Card Payments:  During tax season, we receive many inquiries regarding the payment of Federal and State income taxes by credit card.  There are 2 private companies awarded contracts by the IRS.  Both companies charge a convenience fee, approximately 2.49% of the payment amount.  Click on the links to set up a payment if you decide to use the credit card payment method, or call the toll free numbers.  Official Payments Corporation (1-800-272-9829) and Link2Gov Corporation (1-888-729-1040).

Electronic Federal Tax Payment System (EFTPS):  This is a free service provided by the US Department of Treasury.  You can pay federal taxes electronically, either by phone or online, 24 hours a day, 7 days a week.  To use EFTPS, you must first enroll.  Visit the EFTPS website or call the EFTPS at 1-800-555-4477 for an enrollment form.  You must access EFTPS at least by 8 PM (ET) at least one business day in advance of the due date to report your tax information.  Individuals can schedule payments up to 365 days in advance of their tax due date, and scheduled payments can be changed or cancelled up to 2 business days in advance of the scheduled payment date.