Note from Client Accounting | Taxes and Government Requirements
By PRANDI Property Management Tuesday, May 17, 2011
There are some things that are not an option, for example: Taxes and Government Requirements. The Client Accounting Department has been busy filling in last requests from owners for final accounting of their 2010 Income and Expense Summaries. This has not been an easy task, as we were in two software programs last year so two separate reports were required, as well as gathering together two 1099s for tax purposes for each owner. We are also done with payment of all property taxes for our owners. To say the least, we are happy that the April tax season has finally come to an end! We are now in for the 2nd quarter of CA FTB (California Franchise Tax Board) taxes due June 15. The date is earlier than the expected date of July 15, due to the fact that the State of California would like their funds earlier. The mandatory collection of taxes for the State has created quite a workload for property management firms--from filling out a multitude of forms (Form 590 for all CA residents and Forms588 or 589 for out-of-state owners).
For those who do not know the details, the 590 Form is filed in the office and does not change until the owner moves out of their home. The 588, however, is a different story and is faxed (or snail-mailed) to the FTB directly. It takes some 21 days to receive a response from the FTB to hopefully receive a waiver if you, as an owner, have paid CA taxes in the past 2 years. It is the owner's responsibility to notify the property management company if a waiver has been received or denied. For PRANDI, and all other property management companies in California, we also have the time-consuming task which required us to compile a list of our out-of-state owners who have not received a waiver, and send in 7% of their quarterly income to the FTB. At year end, each owner receives tax forms reporting the CA FTB taxes paid by PRANDI. To say the least, this is a long process, and the Client Accounting Team here at PRANDI is delighted to have the tax season behind us. We are looking forward to a Great summer!
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