Monday, May 18, 2009

Arizona State Tax Credits

Are you a resident of Arizona? Do you have Arizona taxable income? If you answered YES to either of those 2 questions, you may want to consider utilizing the currently available Arizona income tax credits. There are several to consider: credit for solar energy property, credit for fees paid to public schools, credit for contributing to the Arizona Military Family Relief Fund, credit for donations to Private School Tuition Organizations and even a credit for Contributions to Charities that assist the working poor.

Each of these credits have different criteria as to qualifications, dollar limits and potential phase outs for application. This discussion is limited to introducing the availabitily of these credits to those who may be qualified to take advantage but you should consult with your own tax advisor to see if these are beneficial.

Gaylor Tax Services recommends that it's clients take advantage of these credits if they are of interest to you and if they would help reduce your overall tax burden.

Thursday, May 14, 2009

IRS Wants to Capture All Sources of Income

There was legislation that was passed in the last year that will require banks, credit card processors and vendors like PayPal to report the dollars processed via card payments. The thought process is that these types of payments go unreported by taxpayers, in particularly the payments processed through PayPal for items like Ebay sales.

You will want to talk with your tax professional if you have been running a side business about the potential implications for accepting payment via credit card or bank cards. Are you in business? Is this a hobby that may have potential reporting consequences? Your tax advisor should be consented to find out for sure.

Wednesday, May 6, 2009

Arizona Payroll Withholding Changes

Recent changes to Arizona Withholding have been announced for employers and employees in Arizona:

• For income tax withheld on or after May 1, 2009 through December 31, 2009, the percentages will be increased to 11.5%, 21.9%, 26.5%, 28.8%, 35.7% or 42.6%. To review or download the new form use this link: Arizona Form A-4

• For income tax withheld on or after January 1, 2010 through June 30, 2010, the percentages will be decreased to 10.7%, 20.3%, 24.5%, 26.7%, 33.1% or 39.5%.

• For income tax withheld on or after July 1, 2010, the amount withheld will no longer be a percentage of federal withholding. The amounts withheld must be based on tables prescribed by the department. For more information about this withholding law change, visit the Arizona Department of Revenue website at

California Mandatory E-Pay Requirement

Received the following message from the California Franchise Tax Board (FTB):

Mandatory e-Pay Message

Know that FTB has begun mailing notices (
FTB 4106 MEO) to taxpayers who meet the mandatory e-pay threshold.

The new mandatory e-pay law requires certain taxpayers to remit their payments electronically. The first payment that would trigger the mandatory e-pay requirement is the 2009 taxable year first quarter estimate that was due April 15th, 2009. This first payment did not have to be made electronically, but all future payments should be made electronically.

For the 2009 calendar year we will not impose the mandatory e-pay penalty (1% of the amount paid) to allow taxpayers and practitioners additional time to implement practices and procedures to comply with the requirement.

This requirement is only for taxpayers when their extension payments or estimated tax payments are over $20,000 or their total tax liability is over $80,000. There are a couple of ways to pay electronically: Web Pay or pay by Credit Card. To see other payment options available to California tax payers visit: Other states offer similar type payment arrangements and make it more convenient and secure. Arizona offers a credit card option as well as a web payment (check out for this payment option).

Tuesday, May 5, 2009

Tax Filing Deadline Passes

With the passing of April 15th, another due date for individual, partnership and fiduciary tax returns (for calendar year end organizations) has come and gone. For the firm's clients, extensions have been filed for clients that have been clients in the past.

One new item in 2009, partnerships and fiduciary no longer have a 6 month extension, instead now the extension is for 5 months. These tax returns are now due by September 15th instead of October 15th as the extended due date.