Have You Paid Your California $800 Minimum Franchise Tax?
APRIL 15TH TAX DEADLINE!!
For those of you who own businesses, please keep in mind there is a very important item that is easily missed during tax time which may cause unnecessary penalties ~ that is the $800 California minimum franchise tax due by April 15, 2014.
WHO IS REQUIRED TO PAY $800?
The following business entities are required to pay the $800 tax:
- “C” Corporations
- “S” Corporations
- Limited Liability Companies (LLCs)
- Limited Partnerships (not General Partnerships)
Why do these business entities PAY California Franchise Tax?
- Incorporated or organized in California
- Qualified or registered to do business in California
- Doing business in California, whether or not incorporated, organized, qualified, or registered under California law
How is the overall California Franchise Tax calculated?
The franchise tax is equal to the larger of your California income multiplied by the appropriate tax rate or the $800 tax.
HOW TO PAY $800 FRANCHISE TAX?
Use Form FTB 100-ES to send payment to the Franchise Tax Board:
OR
Use Web Pay for Businesses to make electronic payments to the Franchise Tax Board anytime you wish.
What if you started business in 2012 and did NOT pay $800 tax?
California does NOT require newly incorporated or qualified corporations, including LLCs treated as corporations, to pay the minimum franchise tax in their first taxable year. This means payment was not required in 2012 but it is required in 2013 but is required in 2014.
FOR MORE INFORMATION ON THIS SUBJECT, REVIEW THE GUIDE FOR STARTING BUSINESS IN CALIFORNIA: https://www.ftb.ca.gov/forms/misc/1060.pdf
What’s Due on 4/15/2014
- Federal Individual Income Tax Returns
- Most State Individual Income Tax Returns
- Federal Partnership Returns including LLCs
- Extension of Time to file tax returns
- 1st Quarter Estimated Tax Payments
- California $800 Franchise Tax Fee