California LLC Tax Trick

http://www.incorporationforartists.com If you're starting an LLC in California, there are a couple bizarre things you must know about the annual $800 LLC tax. I'll show you everything you need to know.

Category:

Howto & Style

Tags:

• California
• LLC
• tax
• trick
• howto

[SuperShank76]

If I additionally fill out the 2008 tax voucher along with 2007 form,wouldn't that mean that I'll do the 2008 form along with 2009 tax voucher when I am filing my 2008 tax return, effectively paying LLC tax for 2008 twice?

[Incorp4Artists]

@SuperShank76 Let's say you start your company on January 10, 2011. You have 90 days to pay the $800 LLC tax for 2011. When you file your Form 568 for tax year 2010 (next April), it'll be, as you saw, the 2011 form--but you'll be paying the 2012 LLC tax voucher, because you (supposedly) already paid the one for 2011. That's how it always is: on Form 568 you're reporting in past tense; on the voucher you're paying in present tense.

[Incorp4Artists]

But what often happens is that people don't realize they need to pay the $800 LLC tax that soon, so they put it off till they're doing their Form 568. Then they realize what the rule is, and they find they owe BOTH the 2011 tax (which is late and will have penalties assessed) and the 2012 tax. In that case, yep, they're effectively getting taxed twice in the same year. Which kinda sucks.

[yieldhog]

I have made this mistake every year for the past four years. Two questions: (1) is there a way to clawback the penalties by amending the return. I litterally make no money in my LLC as it is being parked for future activities; and (2) does this still apply for 2010?

[Incorp4Artists]

@yieldhog The form is still identical this year. I just looked, and there this trick is, waiting to entrap the unwary. As for amending the return, my recollection is that that doesn't work. You can amend the return, sure, but the FTB will still claim that you underpaid the tax on the due date, therefore all the penalties would still be due.

[jeminijemini]

I didnt pay my fee right after I signed up for my LLC, how do you put that on the form correctly or is it seperate?

[ikey76]

@yieldhog I did the same thing now Im scared to go see how much I owe. Chalk this up to wealth education fund.

[gilliam53]

VERY VERY GOOD THANK YOU

[svca12218]

THANK YOU!!!

[aaroncom23]

thank you!

I'm positive that I would have made "that mistake," haha! You saved me from having a bad day and a headache.

"because every other tax you've seen in your life..." - so funny/true.