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| that this action was due to the fact that cellphones nowadays are such as necessity just like shoes are a necessity that we simply cannot live without. The IRS stipulates that if your employer provides you with a cell phone or reimburses you for use of your cellphone in your business, it is a nontaxable transaction as long as the use of the phone is primarily for business. It goes without saying that if the cellphone use of an employer provided cellphone or reimbursement is not primarily for business use, the reimbursement or the employer provided cellphone use would generally be taxable. Recordkeeping requirements have also become more lax under the new federal tax rule. There are certain increases with which California does not conform. Use Form FTB 3885A to figure the amortization adjustment that differs with federal regard cellular phone use and allowable deductions to enter on Schedule CA of Form 540 or Form 540NR. |
| Penalty assessed by professional sports league |
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For federal practically every expenses which is necessary for the performance of your business is a deductible expense. No quite though, there are few exceptions. You cannot deduct illegal bribes or outright breaking of the law, for instance. Certain penalties and fines are deductible as business expenses for federal tax purposes and others are not. For example, a penalty for late performance or nonperformance of a contract is a deductible penalty. However, penalties paid for violation of laws are not deductible. A penalty or fine paid by an owner of a professional sports franchise imposed by the professional sports league is a deductible business expense for federal tax purposes but not for California. Enter any amount for this kind of deduction permitted by federal but not by California on Schedule CA of Form 540 or Form 540NR, line 12, column C to reverse the deduction on your California tax return. |
| Cancellation of Debt Income (CODI) |
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Think twice before you call your credit card company and negotiate your debt with them. You may have to pay taxes on the amount cancelled. However, if you can cancel part of you debt, the amount you save is far greater than the tax which you will pay on the cancelled debt. Well, you have to also consider you tax bracket. This sounds very much like when an taxpayer does not want to work because doing so will cause him or her to pay more taxes. The amount received is far greater than what will be owed on his or her taxes. Again, this depends on your tax bracket. |
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If your credit card company cancels all or part of your debt to amicably settle what you owe them, there may some tax implications. The money forgone by the credit card company is most likely taxable income. You must include the canceled amount of the debt in gross income unless you qualify to exclude it. Some people may not be aware that they have a taxable transaction when they have a forgiven debt. Many of these debts are specifically excludable such as when your home gets repossessed by the bank. If this home is your principal residence then any amount still owed on the home repo is cancelled debt which qualifies for exclusion from gross income. Federal elected under IRC Section 108(i) to defer recognition of cancellation of debt income in connection with the reacquisition of an applicable debt instrument after December 31, 2008 and before January 1, 2011. The deferral period is five taxable year for cancellation of debt income which occurred in 2009, or four taxable year for a cancellation of debt income that occurred in 2010. However, California did not conform to this recognition of cancelation of debt income. Therefore, you must make adjustments in your California tax return. For federal tax purposes, income has been ratably taxed over five years and for California the income has been included in income during the previous taxable years and you recognized the CODI for federal tax purposes in the current year. You must enter the federal cancellation of income amount Schedule CA, line 12, column B to adjust it for California tax purposes. |
| Donated agricultural products transportation credit |
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| Revised: 07/09/15 |
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