This Week From The Desk of C.G. Johnson & Company

There is some good news coming your way effective January 1, 2017.

The 2012 voter-approved (Prop 30) statewide sales and use tax increase of one-quarter percent (0.25%) that became effective January 1, 2013, is set to expire on December 31, 2016. This will decrease the statewide sales and use tax rate from 7.50 percent to 7.25 percent on January 1, 2017. The total tax rate in many counties and cities will still be higher than 7.25 percent because of voter-approved district taxes, which are imposed and added to the existing statewide rate.

 

Visit boe.ca.gov for additional information

 

Updates from the IRS, tentative effective date January 1, 2017:

There will be an increase in fees to set-up installment agreements. Currently the IRS charges 120.00 to use their system to set up an installment agreement. They due offer a reduced fee of $52.00 to set up a direct debit installment agreement. This is where you authorize the IRS to withdraw electronic transfers from your specifically identified bank account. The user fee is $43.00 if you qualify as a low-income taxpayer.  The idea is to bring the installment agreements in-line with the full cost of providing this service to taxpayers. These are the proposed new rates based on the full cost of establishing and monitoring monthly installment agreements.

  1. $225.00 for a Regular Installment Agreement. Contacting the IRS by phone or mail to set up an agreement in order to make manual payments over a specified time by mailing a payment or using the EFTPS system.
  2. $107.00 for Direct Debit Installment Agreement. A taxpayer contacts the IRS by phone or mail and sets up an agreement to make automatic payments over a specified time, by an automatic direct debit from your bank account.
  3. $149.00 for Online Payment Agreements. A taxpayer sets up and installment agreement through irs.gov and agrees to make manual payments over a specified time by either mailing a check or using the EFTPS system.
  4. $31.00 for Direct Debit Online Payment Agreements. A taxpayer sets up and installment agreement through irs.gov and agrees to make manual payments over a specified time by a direct debit from your bank account.
  5. $89.00 for a Restructured/Reinstated Installment Agreement. A Taxpayer modifies a previously established installment agreement on which the taxpayer has defaulted
  6. $43.00 Low-income Rates. This rate applies when a low-income taxpayer enters into any type of installment agreement, other than a direct debit online payment agreement and when a low-income taxpayer restructures or reinstates any installment agreement. A low-income taxpayer is one who has income at or below 250 percent of the dollar criteria established by the poverty guidelines. This is updated annually in the Federal Register by the U.S. Department of Health and Human services.

 

Government News from TAXPRO Monthly, original article by: Cindy Hockenberry, EA

 

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