All LLCs that are organized, registered, or doing business in California must file Form 3522 and pay the LLC annual fee. You may also be eligible to file Form 3536 and pay LLC fees. The California Franchise Tax Board grants a 6-month extension for Form 568 if the LLC fails to pay Non-Consenting Non-Resident Members (NCNR) taxes by the 15th day of the 4th month. In such a case, the LLC may file Form FTB 3537. To show whether you have a profit or loss from your LLC, you must file IRS Schedule C, Profit or Loss from Business with your tax return. Here you list all your business income and deductible expenses. If you terminate your LLC within one year of the organization, you can file an abbreviated termination (SOS Form LLC-4/8) with SOS. Your LLC is not subject to $800 in annual tax for the first tax year. The problem is that it could get complicated when it comes to corporate tax.
But the good news is that with LLC taxes, you have several options. Here is some information that can be helpful in understanding what to expect with LLCs and taxes. Everyone in the United States has to pay these taxes, and they are much higher than the taxes levied by California or other states. The good news is that your LLC doesn`t pay taxes or file federal tax returns. Instead, you include the income you earn or losses you incur from your LLC on your personal tax return (IRS Form 1040). Make sure you fill out the correct form when you file your return by mail (do not attempt to pay franchise tax on or with your Form 568). You can also submit your application online. Online payments are charged with a convenience fee of 2.3%. However, you have to pay self-employment taxes — that is, Social Security and Medicare taxes — on your business income (called by the IRS self-employment income).
Self-employment taxes are equal to the total of the social security and health insurance tax paid for an employee. Many entrepreneurs form LLCs because they are often cheaper than companies with some liability protection. For example, LLC`s finances are treated separately from individual assets. They are also usually treated as intermediate tax units, so you can claim them on your taxes. The exceptions are LLCs whose members choose to be taxed as corporations. There are two main federal taxes for LLCs: income taxes and Social Security and Medicare taxes. All LLCs that sell goods and retain sales tax or have employees must file Form 568 for the limited liability company`s tax return. LLCs use this form to file and pay tax for non-consenting non-resident members and any deficits or penalties after filing LLC fees. If you don`t think someone is acting as your agent for lawsuit delivery, the California Secretary of State`s office provides a list of private service companies (registered commercial agents) that you can choose from for a fee. If you choose to file your LLC online, companies like Incfile or ZenBusiness fulfill the requirements of a registered agent by acting as your representative.
If you decide to file your own bylaws, you should have the following information handy: California is one of the few states that levies income taxes from S Corp. If you want to avoid the hassle of filing yourself, you can use an online LLC filing service like Incfile or ZenBusiness instead. These online services will help you with all the steps you need to take to form an LLC in California, from choosing a proper business name to filing your documents with the state. The best way to ensure your LLC avoids unnecessary penalties is to file your tax returns on time. It also requires precise and meticulous attention to detail. That`s why we`ve honed our tax filing skills and knowledge for LLCs and corporations over the years. The knowledgeable accountants at Cook CPA Group can help you understand and work on the tax reporting requirements for your LLC. Let our experience and knowledge work for you.
To learn more about your options during a free consultation with one of our accountants in Sacramento, call Cook CPA Group today at (916) 432-2218 or contact us online.