January 11, 2008

Franchise Tax Board offers tax season tips

Looking for free tax help? The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs staff more than 1,000 centers statewide. They help low-income, senior, non-English speaking and disabled individuals complete their tax forms for free. For the nearest location, call FTB or go to our Web site at www.ftb.ca.gov

Federal EITC: The Earned Income Tax Credit reduces your federal tax obligation, or allows a refund if no federal tax is due. You qualify if a child lived with you and you earned less than $37,783 ($39,783 if married filing jointly), or you have no qualifying children and you earned less than $12,590 ($14,590 if married filing jointly). For more details, go to www.irs.gov and search for EITC Assistant. California has no comparable state credit.

Voluntary contributions: The state tax forms list 11 charitable funds taxpayers can contribute directly to from their return. Contributions made to these funds will reduce your refund or increase taxes owed. Taxpayers who contribute to any of these funds can take a charitable contribution deduction on next year’s return if they itemize their deductions.

Paying taxes online: FTB’s Web Pay allows taxpayers to authorize a payment from their bank account on a specific date to satisfy their return balance due or extension payment. Pay on or before April 15 to avoid penalties and interest. Taxpayers can also pay estimated tax or make any bill payments online. For a small fee, taxpayers can also pay their taxes with their Discover/NOVUS, MasterCard, American Express and Visa cards. FTB also accepts Western Union.

If you can’t pay your taxes: Taxpayers can request a payment plan online. You will generally qualify if you owe less than $25,000 and can repay it within five years.

Don’t want to owe taxes? Go to the California taxes homepage at www.taxes.ca.gov and use the DE 4 Calculator, Employee’s Withholding Allowance Certificate, to compute your suggested payroll withholding to closely approximate your tax liability.

Do you owe use tax? California residents are required to pay state use tax on certain purchases made from out-of-state sellers, such as by telephone, over the Internet, by mail or in person, if the seller does not collect sales or use tax and if you use, give away, store or consume the item in California. Go to the Board of Equalization’s Web site at www.boe.ca.gov for more details.

Information in other languages: FTB continues to provide more state tax information in Spanish, Chinese, Korean and Vietnamese. FTB also has a Speakers’ Bureau, where technical subject matter experts are available to speak at a variety of public forums statewide to educate the public on topical tax subjects.

Phone service: FTB provides 24-hour toll-free automated phone service at (800) 338-0505. To speak with a customer service representative, FTB staffs its general toll-free phone line, (800) 852-5711, from 7 a.m. to 6 p.m., weekdays except state holidays.