Fri10312014

Business & Real Estate

Franchise Tax Board announces audit of returns that claim Head of Household

Town Crier Report The Franchise Tax Board (FTB) mailed more than 135,000 audit letters to taxpayers to verify the Head of Household (HOH) filing status entered on their 2010 state tax returns. Taxpayers who do not qualify will have their tax reassessed at either a single or married-filing-separate filing status. Nearly 34,000 taxpayers who used this status last year did not meet its requirements and were issued more than $35 million in tax assessments. Each year, the FTB reviews returns of taxpayers who claim the HOH filing status because the qualifications are commonly misunderstood. This filing status generally results in lower tax liabilities for unmarried taxpayers who care for a dependent. To qualify, the taxpayer must provide care for more than one-half of the year and pay more than one-half the cost of maintaining their home. The qualifying person must be related to the taxpayer and meet the requirements to be a qualifying child or relative. More than two million California taxpayers use this filing status each year. FTB advises taxpayers who receive an HOH letter to respond promptly by completing the enclosed questionnaire. Failure to respond could result in a tax assessment and penalty. Questionnaires can be submitted electronically, by fax or mail. For more information, visit the State of California Franchise Tax Board website, ftb.ca.gov.

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