KNOWLEDGE| Corporation | LLC | |
| Filing Status | As a C corporation. |
An
LLC must have the same classification for both California and Federal tax
purposes: • Disregarded entity: Single member LLC can be classified as disregarded entity. • Partnership: LLC can be classified as a partnership (more than one member). • Corporation: LLC can elect to be classified as an association and taxable as a corporation. |
| Franchise Tax V.S. Annual Tax |
You
must pay minimum franchise tax $800 whether your corporation is active,
inactive, operates at a loss, or files a return for a short period (less than
12 months) |
• Taxed
as Disregarded Entity or Partnership: LLC classified as a disregarded entity
or as a partnership is subject to an $800 annual tax, even if it conducts no
business in California. • Taxed as Corporation: You do not need to pay annual tax, but you are subject to franchise tax. |
|
Exception For Franchise Tax or Annual Tax |
• Newly
incorporated or qualified corporation is not required to pay the minimum
franchise tax in first year. • Corporation is not subject to the franchise tax for a tax year if both of the following is true:tax year is 15 days or less; and you did not conduct any business in California during the 15 days. |
• Taxed
as Disregarded Entity or Partnership: LLC classified as a disregarded entity
or as a partnership is not subject to the annual tax and fee if both of the
following are true: tax year was 15 days or fewer; and you did not conduct
any business in California during the tax year. • Taxed as Corporation: Follow the Corporation rule. |
| California Corporate Income Tax |
• The
income tax for C corporations is the greater of 8.84% of the corporation's
net income or $800 (Franchise tax). • Any first-year net income is still subject to the 8.84% tax rate. |
• Taxed
as Disregarded Entity or Partnership: LLC classified as a disregarded entity
or as a partnership is not subject to the California Corporate Income Tax,
you should report California income, deductions, and credits on your personal
income tax return. • Taxed as Corporation: Follow the Corporation rule. |
| LLC Fee | N/A | LLC classified as a disregarded entity or as a partnership is subject to an LLC fee, if its total income exceeds $250,000 "from all sources derived from or attributable to California" . |
| Forms | California Corporation Franchise or Income Tax Return (Form 100) |
• Taxed
as Disregarded Entity or Partnership: California Limited Liability Company
Return of Income (Form 568). • Taxed as Corporation: Follow the Corporation rule. |
| Due Dates | Your minimum franchise tax ($800) is due on 15th day of the 4th month after the close of your tax year. |
• Taxed
as Disregarded Entity or Partnership: (1) Form 568: 15th day of the 3rd month after the close of your tax year. (2) Annual Tax: You have until the 15th day of the 4th month from the date you file with the SOS to pay your first-year annual tax. For the subsequent years, the due date is 15th day of the 4th month after the beginning of your tax year. (3) LLC Fee: you must estimate and pay the annual fee by the 15th day of the 6th month, of the current tax year. • Taxed as Corporation: Follow the Corporation rule. |
|
Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
Language
close
