Extended Due Date Deadline Is October 15 for Filing State Tax Returns

The Franchise Tax Board (FTB) today reminded taxpayers that Thursday, October 15 is the deadline to timely file their 2008 state income tax return to avoid late filing penalties.

State law contains an automatic extension for personal income tax returns. More than 1.5 million Californians take advantage of that extension annually.

ReadyReturn and CalFile will be available through October 15 on FTB’s website ftb.ca.gov. With ReadyReturn, the tax-filing burden is reduced by using wage and tax withholding data already provided to the state by employers to complete qualifying taxpayers’ returns. CalFile is a free, direct-to-government, e-file program that accepts income of up to $326,379, itemized deductions, and some tax credits.

Taxpayers can also use a tax preparer, or one of the other free or fee-based e-file services listed on FTB’s website. E-filing provides faster refunds, increased accuracy, and a timely confirmation that FTB received the return. For quick refunds, FTB encourages taxpayers to opt for direct deposit into their bank account.

Taxpayers can also access MyFTB Account, an online service where taxpayers can view their wage and withholding information, estimated payments, FTB issued 1099 data, and current balance information.

FTB offers taxpayers electronic payment options as well. FTB’s WebPay is a secure online service that provides the convenience of online bill payment. Taxpayers can pay the current amount owed; plus, schedule future payments, such as estimated tax payments, for up to one year in advance. Taxpayers can also pay using their Discover/NOVUS, MasterCard, American Express, or Visa credit cards. To pay by credit card, taxpayers can call (800) 2PAY TAX [(800) 272-9829] or visit officialpayments.com. The vendor charges a convenience fee.

Installment payment plans are available on FTB’s website for taxpayers who face financial trouble. Those who owe less than $25,000 and can repay the tax within five years generally qualify.

Recent tax law changes make now a good time for taxpayers to review their withholding amounts to make sure the correct amount of taxes are being withheld from their wages. The 2009 California Tax Rates and Exemptions tables are now available at ftb.ca.gov. California’s personal income tax rates were increased by .25 percent and the dependent exemption credit changed from $309 to $98, the same as the personal exemption credit.

As of October 6, 2009, California taxpayers filed more than 14.7 million personal income tax returns of which 10.5 million were e-filed. The state has issued 9.8 million refunds totaling $8.4 billion.

Keeping Good Records Reduces Stress at Tax Time

Although most people won’t be filing their tax returns for several months, the dog days of summer are actually a great time to start planning for the tax filing season by ensuring your records are organized. Whether you are an individual taxpayer or a business owner, you can avoid headaches at tax time with good records because they will help you remember transactions you made during the year.

Here are a few things the IRS wants you to know about recordkeeping.

Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you are billed for additional tax. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.

Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

Bills
Credit card and other receipts
Invoices
Mileage logs
Canceled, imaged or substitute checks or any other proof of payment
Any other records to support deductions or credits you claim on your return
You should normally keep records relating to property until at least three years after you sell or otherwise dispose of the property.

Examples include:
A home purchase or improvement
Stocks and other investments
Individual Retirement Arrangement transactions
Rental property records

If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks