Frequently Asked Questions

Following are some of the most frequent questions we receive from our clients and our answers to assist you. It is here to serve you. We constantly on the lookout to update and add to this list. If there is a general question that should be on this list and is not please let us know:

What does Obamacare mean for me, my family and my business?
You can find out more about how the Affordable Care Act will affect you by going to this website. Also, you can read about tips for getting the best health plan here.

Does California have an extension form for individual returns and what is the form number?
California only requires an extension filing if you think you owe money. If you need to make an extension payment, file form 3519.
Every year I owe Uncle Sam money even though I file the W-4 form for married with two exemption. What can I do?
Try filing a W-4 form with your employer as single with 0 exemptions. If the withholding is still insufficient, specify an additional amount of withholding you want withheld each pay period on line 6 of the W-4 form considering the number of pay periods left to meet the withholding shortfall. If the problem is only with the California return you can file a DE-4.
What income tax form does an LLC or an LLP file?
Both an LLC and an LLP file a federal form 1065 and a California form 568. On page 2 of the federal form 1065 you put a check mark in the box for LLC or LLP or one of the other entities that use form 1065.
Our partnership return was filed by the end of September and we just received a late filing penalty notice. Why?
Entities like partnerships, LLCs etc. only receive a 5 month extension to September 15th. The six month extension hasn’t been around for these entities since tax year 2008.
If I sell my residence at a loss, how many years can I carry the loss backward or forward?
Unfortunately, losses on sale of your residence aren’t usable at any time, not even in the year of sale.
I need to file the 2007 to 2010 tax returns. I think I will get a refund. Can you prepare those years?
Yes, I can prepare returns back to about 1997. The problem you have is that your 2007 refund is past the statute of limitations (three years from the due date plus extension) and therefore you can’t get that money back.
I need to refi my home but the bank says I don’t qualify. Can you create a tax return that would qualify?
Making up a phony tax return for a bank loan is a felony and both you and I can go to prison even if the bank doesn’t lose any money. My job is to prepare an accurate return not go to jail.
If I refer a client to you, will you pay me a commission or finders fee?
Sorry, that is a violation of the ethics rules for California CPAs.
Can my employer treat me as an independent contractor for tax reporting purposes?
This is a complicated area of law and I have an article that explains how the IRS views your situation.
How long must I keep my tax records before destoying them?
It depends on the type of record and I have an article that explains the rule for each type of record.