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Creative California Accounting

By Rodney Johnson⋅ August 10, 2009 ⋅ ⋅ Post a comment

Turns out people in CA really are creative…not just in Silicon Valley, but in Sacramento as well.

SACRAMENTO, CA - Come November, you may notice your paycheck is a bit smaller. As part of the state budget fix, lawmakers are “borrowing” future income withholding taxes in order to raise $1.7 billion for this fiscal year.

“It’s not raising taxes. It’s just getting the money, borrowing from you for a short period, non-interest bearing, and you’ll get it back later,” explained Sacramento accountant Ken Astle.

Astle said that taxpayers can file a DE-4 form to change withholdings and increase exemptions to compensate for the extra withholdings.

Taxpayers will get their money back come tax time in 2011, unless they underpaid their withholdings.

In addition, the state is also requiring individuals and business that make estimated tax payments to pay more earlier - another accounting move that is designed to help the state balance its budget this year.

Critics charge that the state is only delaying the task of balancing the budget without accounting gimmicks.

http://www.news10.net/news/local/story.aspx?storyid=64236&provider=top

H/T Cal Garvin for pointing this out!

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2 comments for “Creative California Accounting”

Unless they send a worthless IOU or force one to apply the refund to next years taxes instead of a cash refund. Leave it to the pols to extract from their “employers”, the taxpayers just when they need it most. It seems the pols have forgotten who they work for. They may get a huge surprise at the midterms.

Posted by mkern | August 10, 2009, 4:21 pm
An additional thought. These pols are cut from the same cloth as the ones wanting to “reform” health care. Easy to see why many Americans don’t want congress to mess with health care. One never knows what the pols will do, but it likely will involve money moving from someones pocket to the pols pocket at he expense of the taxpayer.

Posted by mkern | August 10, 2009, 4:27 pm