2017 Tax Law Update:
California Compliance with New Federal Tax Law
California currently does not comply with almost any of the recent changes to the federal tax code. Below are important recommendations:
Recordkeeping:
We recommend that you continue to keep track of the following for your 2018 tax return (as relevant):
- unreimbursed employee expenses
- investment advisory fees
- union and professional dues.
529 Accounts:
While the new federal law allows taxpayers to use up to $10,000 per year of 529 funds for K-12 education, California does not comply. The growth on any withdrawals of 529 money not used for university education, are subject to penalty and taxes in CA.
As a result of the disparities between federal and state law, the preparation of your tax return could be increasingly complex and time consuming. We may be increasing our fees accordingly, although the amount of increase will depend on the return.