Source: CA FTB to Spidell 7/22/24
If your LLC/Partnership/S corporation had made a “pass through entity” payment to California and mistakenly paid it as an estimated payment instead of a Form 3893 payment, the FTB will now allow you to recharacterize the payment. The request must be made in writing to move the payment incorrectly shown as an estimate to a pass-through entity payment.
If you have made this mistake, please contact us and we will help you to draft the request letter.
Ref: SECURE Act 2.0 (2022)
Example: Your child, Sam, is the beneficiary of a 529 education savings plan with a balance of $30,000 and he’s finished with college. What to do with the remaining funds?
NEW: Under new law, you can roll the 529 funds into a Roth IRA in Sam’s name subject to the annual maximum (currently $7,000). THESE ROLLOVERS ARE TAX AND PENALTY FREE. In this example, you’d be done with the rollover in five years.
ALTERNATIVELY: You may want to consider waiting… and change the beneficiary to your grandchild (yet to be born). By the time he/she goes to college, the account should grow substantially.
Ref: SB167 signed by Gov Newsom this week.
SUSPENSION OF NET OPERATING LOSS DEDUCTION 1/1/24 – 12/31/2026.
Background: In California’s frequent times of financial difficulty, the Legislature often suspends the ability to use prior year net operating losses against current year income. This effectively raises CA taxes by taking away a deduction… And this deduction is more common during hard economic times.
Ideally this deduction will return to CA taxpayers for the year starting 1/1/2027, but the Legislature could extend the suspension.
Who is NOT subject to the suspension:
