There’s nothing new to report on the California budget. The unstoppable force has collided with the immovable object, and nothing’s happening for now. California Controller John Chiang is warning that he will soon be forced to issue registered warrants (aka IOUs).
This brings up an interesting issue. Assume you’re a California taxpayer (or a professional who prepares California tax returns). You’re waiting for that last Schedule K-1 to file Aunt Hilda’s tax return. However, that K-1 won’t be in your hands until September 20th or so. Aunt Hilda’s going to get a large California refund; the amount of the refund won’t change based on the K-a. Should you file the return now (and amend the return to report the K-1 when you receive it) so that Aunt Hilda can get her refund before California starts to issue IOUs, or should you wait?
Normally, it’s almost always correct to wait: You don’t want to amend a return unless you have to. However, if Aunt Hilda needs her money it may be right to file that return today so that she can get the refund (rather than an IOU). This is especially true if you believe that the K-1 won’t have an impact on the final numbers of her return.
One thing is certain, though: The budget mess will start to have an impact on many Californians soon. It will be interesting to see if that forces a change on either the unstoppable force or the immovable object.
Tags: 2010CalBudget