Jan 24, 2024
Fees and Taxes
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Navigating the intricacies of California's small business taxes can be perplexing. Every business operating or based in California falls under the state's tax regulations. The nature of your business determines your tax bracket. For instance, corporations are levied at 8.84%. On the other hand, entities like S corporations, LLCs, partnerships, and sole proprietorships are considered pass-through entities, where profits are taxed as personal income of the owner.
Remember, tax deadlines vary based on your business type. Corporations, for instance, must file by the 15th day of the third month post their tax year's end. Many businesses also need to make quarterly estimated tax payments. Payments can be made online, via mail, or in person through California's CalFile system.
Beyond income taxes, businesses must also address withholding taxes, especially if they have employees. The amount to withhold depends on the employee's income and their Withholding Allowance Certificate. As of 2021, the withholding tax rate stands at 7% of eligible income. Payments are typically made quarterly. The Franchise Tax Board's website offers more details.
Several other taxes apply to California businesses:
The concluding step involves preparing and submitting your tax returns. Whether you choose to file online, by mail, or in person, ensure you have all necessary documents on hand.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. Seek the counsel of a licensed professional for specific questions related to these topics.