CA Question - filing requirement?

[Lion EA]

New, high-wages client, works in NY and resides in CT. Now that he brought me his last bits, I see that in 2017, for the first time, he worked in CA for a brief time. $2,664.20 with CA w/h of $1.71. Anyone know off the top of their head what threshold CA might have for filing or not filing? I have a couple CA clients, and I'd probably charge him $100 for that return and don't think he'll get his $1.71 back but probably owe more. Federal AGI well over $635,000. And, his prior preparer charged him only $300 for federal plus two states with investments and a K-1. I'm not doing a third state at this late date for peanuts!

Edited October 3, 2018 by jklcpa
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[Possi]

I have had to file CA for very little income, because they were non-residents with ANY CA income. See if I read this right:
 

https://www.ftb.ca.gov/individuals/fileRtn/index.shtml

[Lion EA]

Thank you. That's the chart I found via AnswerConnect within my software. That helps that you read it the way I did, even though it's a post on the CA website and not a cite of CA law. I'm trying to get the federal return set and then go to CT, NY, and CA for these new clients. But, it looks like they'll owe CA and CT and will be behind on federal ES. Still waiting on their answers to my latest questions so I can finalize federal.

[Max W]

There is no filing requirement in CA if the income is less thsn $17K single; $34K MFJ.  It goes up $5K for each one over 65. This applies to Res. & NR.

[Lion EA]

His federal income is well over that; CA income is under. Not going to finalize CA until I finalize federal, but a quick look at their CA return so far shows they owe CA more tax which must mean they are required to file.

Loving these last couple weeks with all my clients finally receiving their K-1s and revised 1099-Bs!

[jklcpa]

Please see the section "Do I need to file" in the instructions of CA form 540 for nonresidents.  In step #2 in that section, basically it says to use federal adjusted income as calculated using the rules/laws for California and compare that amount to the filing threshold for the appropriate filing status in the chart provided.   With your client being a high earner and AGI of $600K, he will absolutely have to file a CA return.   

Quote

Do I Have to File?

Steps to Determine Filing Requirement

If you are a nonresident of California and received income in 2017 with sources in California, go to Step 1. For more details see page 6.

Step 1: Is your gross income (gross income is computed under California law and consists of all income you received from all sources in the form of money, goods, property, and services, that is not exempt from tax) more than the amount shown in the California Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 2.

Step 2: Is your adjusted gross income (adjusted gross income is computed under California law and consists of your federal adjusted gross income from all sources, reduced or increased by all California income adjustments) more than the amount shown in the California Adjusted Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 3.

Step 3: If your income is less than the amounts on the chart you may still have a filing requirement. See “Requirements for Children with Investment Income” and “Other Situations When You Must File.” Do those instructions apply to you? If yes, you have a filing requirement. If no, go to step 4.

Step 4: Are you married/registered domestic partner (RDP) filing separately with separate property income? If no, you do not have a filing requirement. If yes, prepare a tax return. If you owe tax, you have a filing requirement.

Active duty military personnel, get FTB Pub. 1032, Tax Information for Military Personnel.

 

Edited October 2, 2018 by jklcpa
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[Lion EA]

Thanks, all. With a quick look, I thought these clients have to file CA, in fact, owe more to CA. But, quick is all the time I have this late in the season; and I know a lot of you are in CA or closer to CA to file more CA returns than I do. (My usual CA returns are PY with high earners, so of course need to file as PY residents.) Three states, a K-1, and high wages; prior preparer charged only $300 !!

[SaraEA]

When I get one of those prior preparer low-ball bills, I tell the client up front that my work will cost A LOT more than that.  Most understand they were getting a really good deal but the party's over.  I even have clients who did their own returns and never paid more than $70 for TT.  When they ran into some messes and came to us, they didn't flinch at our $1000+ bills.  In fact they were relieved and all have been loyal clients ever since.  Do I have the BEST clients or what?

[Lion EA]

You Do have the best clients!

This nice couple understands that my quote to them (can't remember what I wrote in their folder, and I don't think I saw CA at that time) is much higher than they had in the past. They came to me recommended by other clients with a very large invoice from me each year plus bills for the returns for their children, too. I don't expect any squawks from the newbies. Just very surprised at their prior preparer in NY. And, they want a projected 2018/paycheck check-up later, which I might invoice separately depending on what I end up charging for 2017. Plus, I'm warning everyone that my 2019 prices will increase due to the new tax laws.

Yes, we are lucky when our clients appreciate our constant education and know we are taking good care of them and willingly pay our fees. And, recommend us to others. When they don't, I raise their fees until they leave! But, have been lucky to NOT do that very often.