The California LLC ? taxed to death?

The limited liability company, better known as "LLC," was marketed as the best companies for small economic unit. The question is whether the market reflects a reality or not. In California, the situation is a little murky at best.

California is known that over the business unfriendly as any state. If you do not get taxed here, you are always met with some odd charge there. The weather makes up for it, butsometimes you really have to wonder whether it's worth it. This is especially true for small businesses, for which a company with limited liability in the head to be met with a number of surprises head.

The first surprise is that it could be found only in California. CLL is to pay an annual fee of $ 800 for a "privilege of doing business in California." Oh, joy. The tax is due by the end of the first year, but within months of forming your company. Yes,Door has just opened and already met with the costs of the state!

The next surprise comes when you start bringing in a business. The surprise villain goes by the name of the "tax on gross income." In addition to the annual fee of $ 800 over, you must pay a tax based on gross revenue. The tax does not start until you bring in at least $ 250,000 per year, but it is important to remember that what we are talking about. This is a tax "gross" revenue. An example will helpexplain the importance of this.

Places I have a business that sells an item of great price. My business plan calls for me to lose my money the first three years as a company grows. The first year I have lost $ 125,000 and $ 10,000 as expected. Then about two years apart. I bring in $ 260,000 in lost revenue and another $ 10,000. To my surprise, I have an extra $ 900 in gross receipts taxes. Yes, this is true, even if I do not make a profit!

Then you must avoid the formation of aCalifornia LLC? No, not really. It's still a good choice. A company in California to be 800 to pay the same fee of $, but not the gross income tax. Until you know what you get involved, LLC is still worth the aggravation Financial.

Source: http://legal-corporations-llc.chailit.com/the-california-llc-taxed-to-death.html

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