Individuals and businesses in California can benefit from careful tax planning. Aside from the peace of mind that meticulously going over one’s tax filings can provide, many other benefits can flow from a careful and strategic handling of one’s tax obligations. For one, individuals and businesses may be able to legally avoid or minimize certain types of tax. In other scenarios, a business may be able to defer capital gains taxes and roll their gains directly into the next investment. Aside from these potential benefits, accurately and timely completing and filing one’s taxes is a duty that nearly all individuals and business in California must satisfy. A failure to do so can lead to significant fines and penalties.
The tax attorneys of NewPoint Law Group can assist with an array of tax concerns and financial goals. To discuss how our tax law firm can assist you or your business, please call 1-800-358-0305 today.
Planning for California State Tax Obligations
Planning for and handling the array of California state tax obligations in a timely manner is an obligation held by nearly all people living in California and nearly all businesses operating or selling goods in the state. California state tax obligations that taxpayers must account for include:
- State income and franchise tax – Individuals and entities in the state are generally subject to an income tax or a franchise tax. This income tax obligation is separate and apart from federal income tax.
- State sales tax and use tax – While both individuals and businesses can have a sales and use tax obligation, this obligation is more typically held by businesses. Sales tax is imposed on goods sold in the state. Use tax is imposed on goods purchased out of state but utilized in California. California sales and use tax is enforced by the California Board of Equalization.
- State payroll taxes – The California Employment Development Division handles employment tax obligations. Businesses that fail to satisfy their employment tax duty obligations in a timely manner are often shocked by the level of aggression of this type of audit. Payroll tax mistakes or oversights can throw a business into disarray and may even result in the temporary or permanent cessation of operations.
At NewPoint Law Group, our tax attorneys approach all matters strategically. Through our years of experience dealing with the various California tax agencies, we can often anticipate and correct potential issues before they become problems.
Planning for Federal Tax Obligations Enforces by the IRS
In additional to state tax obligations, taxpayers are also extremely likely to have a number of federal tax obligations. Generally, taxpayers must account for, file, and pay both federal income taxes and federal employment taxes. These obligations are enforced by the IRS. Some taxpayers may also have an obligation to file FBAR, FATCA, and other foreign disclosures on an annual basis.
The failure to satisfy these and other federal tax obligations is likely to trigger an audit or other tax enforcement action. The tax attorneys of NewPoint Law Group can engage in careful tax planning to decrease the likelihood of an audit or event that disrupts operations.
How Tax Planning Can Save You Money
Engaging in careful tax planning can allow a business or an individual to leverage certain provisions of the U.S. Tax Code to secure tax savings. Some individuals may make a claim for business expenses incurred throughout the year. This may include travel in their vehicle, a home office, and other routine business expenses. However, it is essential to keep all documentation regarding these expenses and ensure that all tax positions are proper. Real estate developers and other investors may be able to leverage the benefits of a Section 1031 like-kind transfer and defer capital gains taxes. Additional tax reducing provisions are available in the U.S. Tax Code for additional scenarios.
Work with Experienced Tax Planning Attorneys in California
Individuals living in California along with companies doing business in California have an array of tax obligations which must be satisfied by engaging with three state tax agencies and the IRS. Needless to say, handling these obligations can be complex. For large organizations, the complexity may only be overshadowed by the potential for strategic tax planning. However, even small to mid-sized companies may be able to leverage provisions of the U.S. Tax Code to reduce tax liabilities.
To schedule a free and confidential consultation, please call NewPoint Law Group at 1-800-358-0305 today.