HT2 CLIENT NEWSLETTER

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CALIFORNIA PASS THROUGH ENTITY PAYMENT DUE JUNE 15TH

California enacted Assembly Bill 150 (“AB 150”) in late 2021 as a method for deducting state and local taxes in excess of federal deduction limitations. AB 150 allowed pass through entities (“PTEs”) to have the tax imposed and paid at the entity level rather than at the individual level, which permitted PTE owners to bypass the deduction limitation. For those owners who have elected to participate in this program, PTEs pay the tax on the qualified net income and their owners receive a corresponding credit against the state income tax liability related to their PTE income. Any unused credit at the owner level may be carried forward for up to five years. READ MORE HERE

CALSAVERS: DEADLINE REMINDER FOR EMPLOYERS 6.30.2022

The State of California now requires businesses with five or more employees to either offer an employee retirement plan or participate in the CalSavers Retirement Savings Program by June 30, 2022. CalSavers is a state-based payroll withholding savings program using Roth (post-tax) individual retirement accounts. All employers with five or more employees must either register with CalSavers or offer a qualifying retirement plan. The CalSavers program has been rolled out in phases, and the state is already issuing penalty notices to businesses that missed the earlier deadlines or failed to allow eligible employees to participate in the retirement savings program. The penalties are significant: $250 fine per employee for 90 days of noncompliance $500 fine per employee for 180 days of noncompliance  Eligible employers must register with the program via the program website (employer.CalSavers.com) or by calling 855-650-6916 READ MORE HERE

WHY YOU SHOULD KEEP GOOD RECORDS OF MAJOR HOME IMPROVEMENTS When you sell a principal residence that has appreciated in value, you generally can exclude $250,000 ($500,000 for married couples) of gain from tax. But many homes sell at a much higher profit, which is why you should keep track of your "basis." This is the cost of buying and improving your home, and it reduces the amount of tax you owe. READ MORE HERE

BUSINESSES MAY RECEIVE NOTICES ABOUT INFORMATION RETURNS THAT DON’T MATCH IRS RECORDS

The IRS has begun mailing notices to businesses, financial institutions, and other payers that filed certain returns with information that doesn’t match the agency’s records. These CP2100 and CP2100A notices are sent by the IRS twice a year to payers who filed information returns that are missing a Taxpayer Identification Number (TIN), have an incorrect name, or have a combination of both. Each notice has a list of persons who received payments from the business with identified TIN issues. If you receive one of these notices, you need to compare the accounts listed on the notice with your records and correct or update your records, if necessary. This can also include correcting backup withholding on payments made to payees. READ MORE HERE

NEW TO HT2! BRENDA GUZMAN Brenda is a native San Diegan, who obtained her Bachelor’s degree in Accounting at Centro De Estudios Universitarios de Los Altos in Mexico.  After graduating Brenda worked in the accounting department of Seagram’s in Mexico. Upon returning to San Diego, Brenda joined CBIZ Benefits & Insurance Services, Inc.   Brenda joined Hamilton Tharp, LLP as an accounting assistant in December 2021. In her spare time, she enjoys spending time with with family and friends, working out and participating in all the outdoor activities San Diego has to offer.

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NEWS YOU CAN USE Pay your HT2 invoice HERE HT2 Resources Page - We publish articles there too! READ MORE HERE  2021-2022 Tax Planning Guide READ MORE HERE Taxpayers should be on the lookout for new scams  READ MORE HERE E-signature for individual tax returns available to our clients VIDEO PRESENTATION

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