OK! Now I'm angry. ~ CA taxes! (San Jose, San Francisco: attorneys, new home, school district)

[Curmudgeon]

Yesterday we finished having our taxes done. In 2009 we were part-time residents of California (8 months) and part-time residents of Missouri (4 months), having moved in early September. Additionally, we took some distribution from an IRA and purchased a new home.

Lo-and-behold, while MO only taxed us on earnings and distributions beginning in September, CA taxed us for the entire year of our retirement income because it originated in California. Almost a decade ago the U.S. Supreme Court ruled against California regarding their "source tax." Until then it was CA's policy to tax any earnings, including retirement funds, that originated in CA regardless of how long you'd lived out of state.

Looks like CA found a way to make an end-run around the ruling for anyone who spent even just part of the year in the state.

Why aren't I surprised?

The good news is, today I write the check and send them the tax return. That will end CA's ability to tax me forever. It gives "Tax Freedom Day" a whole new meaning!

[CA central coast]

Then wouldn't it be illegal, according to the Supreme Court ruling? They found a loophole?

[Charles]

Originally Posted by Curmudgeon

Yesterday we finished having our taxes done. In 2009 we were part-time residents of California (8 months) and part-time residents of Missouri (4 months), having moved in early September. Additionally, we took some distribution from an IRA and purchased a new home.

Lo-and-behold, while MO only taxed us on earnings and distributions beginning in September, CA taxed us for the entire year of our retirement income because it originated in California. Almost a decade ago the U.S. Supreme Court ruled against California regarding their "source tax." Until then it was CA's policy to tax any earnings, including retirement funds, that originated in CA regardless of how long you'd lived out of state.

Looks like CA found a way to make an end-run around the ruling for anyone who spent even just part of the year in the state.

Why aren't I surprised?

The good news is, today I write the check and send them the tax return. That will end CA's ability to tax me forever. It gives "Tax Freedom Day" a whole new meaning!

Your tax dollars at work:

California Spent More Than $42,000 to Fight Nudists, Based on Two Known Complaints. The Orange County Register reports that state officials spent more than $42,000 battling a group of nudists who wanted to keep a portion of San Onofre State Beach as a clothing-optional area. Nudity on public beaches is illegal, but had been accepted at this beach for decades, prior to a June 2008 crackdown that led to litigation.

School District Paid $720,000 for Pizza Machine, Then Took Pizza Off School Menu. The San Jose Unified School District paid $720,000 in 2006 for a machine that was supposed to churn out 800 pizzas a day to sell on various campuses in the district. But the San Jose Mercury News reports that the machine has made only 2,000 or so pizzas in the two years it has been in place. (Cal-Tax: At a cost that works out to $360 per pizza, let's hope the kids got extra cheese and generous toppings.)


IRS Auditor Pleads Guilty to Cheating on His Taxes. An IRS agent who conducts audits of taxpayers has agreed to plead guilty to cheating on his own taxes, the Associated Press reported March 31.

Jury Says State Must Pay Motorcyclist $8.6 Million for Collision With Pig. A Monterey County jury has ordered the state to pay $8.6 million to a motorcyclist who sued the state for damages for injuries sustained when he collided with a wild pig on Highway 1. The jury ruled that the state was responsible because officials knew that wild pigs regularly crossing a stretch of the highway were creating a dangerous situation, but they did nothing to address it.

the motorcyclist was intoxicated when the crash occurred, pointing to a test showing his blood alcohol level was 0.10 percent,

Jurors also awarded $500,000 to the motorcyclist's wife for loss of consortium. (Source: San Francisco Chronicle, March 28.)
*

Taxpayers Paying Handsomely for Expert Witness ...the paper notes that a physician and professor of medicine testifying for Caltrans said he was paid $8,000 by the state government, plus $1,000 by the motorcyclist's attorneys, for one day of giving depositions. The newspaper points out that the motorcyclist's attorneys hope to recover their payment, and everything else they've spent on their case, from taxpayers.

"At $9,000 for a single day of work, that means the professor believes he's worth $2.3 million per year," the editorial says. "How on earth did these fees get so high?" (Source: Carmel Pine Cone, March 20.)

Source: Waste - Strange but True

[NewToCA]

I thought pension income was prorated based on the % of days you spent in each state that year. I'm pretty sure you cannot be taxed on the same income twice, once by each state.

However, my understanding is that a lump sum pension or IRA distribution would be fully taxed by the source state, if you had a split residency that year.

[Curmudgeon]

Originally Posted by NewToCA

I thought pension income was prorated based on the % of days you spent in each state that year. I'm pretty sure you cannot be taxed on the same income twice, once by each state.

However, my understanding is that a lump sum pension or IRA distribution would be fully taxed by the source state, if you had a split residency that year.

Only the distribution we took in CA. Another distribution taken here was only taxed here.

I thought the same as you about the prorating but it would seem that we were, indeed, double dipped, or is that "clipped?"

Oh, well. There's this year!

Amended to correct the issue regarding double-taxation. I don't believe MO taxes government pensions. But CA sure does!

[Curmudgeon]

Originally Posted by CA central coast

Then wouldn't it be illegal, according to the Supreme Court ruling? They found a loophole?

Looks like. Probably based upon the fact that we were permanent CA residents for most of the year. But they can't get us for this year!

[Mr. Fantastic]

Ugh, no wonder California is going down the crapper.

[eureka1]

The year I had income from two different States was the year I got my highest tax bill,both Federal and the two States. I'll never do THAT again.

[bentstrider]

I sent in a late-filed, '08 return and e-filed an '09 CA return.
They got all the info correct for my '08 return and I'll take care of that as usual(part of '08 was six months as a dreaded 1099 employee, we'll discuss that later).
But, the '09 one they claimed that the S/S # didn't match and now they want everything mailed to them for additional confirmation and such.

[Curmudgeon]

Originally Posted by bentstrider

I sent in a late-filed, '08 return and e-filed an '09 CA return.
They got all the info correct for my '08 return and I'll take care of that as usual(part of '08 was six months as a dreaded 1099 employee, we'll discuss that later).
But, the '09 one they claimed that the S/S # didn't match and now they want everything mailed to them for additional confirmation and such.

Hush yo mouf! We'd better be done with them. They've taken more than their fair share. Just leave us the hell alone!

1098s, 1099-Rs, W-2s. enough already!