Small businesses in California are an essential part of the state economy. These businesses contribute to providing significant employment in an area, pay taxes, and may contribute to the well-being of all local residents. However, even small to mid-sized businesses can have significant tax obligations. The failure to satisfy these state and federal tax obligations can result in an audit or significant fines and penalties. Furthermore, the failure to account for and pay taxes can disrupt one’s business or result in the termination of operations.
The tax lawyers at NewPoint Law Group can assist small businesses with an array of tax and financial concerns. We can engage in a routine handling of annual tax obligations, perform an internal audit, and seek out tax-saving opportunities your business can leverage. To schedule a free and confidential initial consultation, please call 1-800-358-0305 today.
Small Businesses in CA Must Manage Payroll Taxes or Face Serious Consequences
One of the more strictly enforced tax obligations on both the state and federal level are payroll taxes. Taxes of this type are subject to strict enforcement because they technically trust fund taxes. This means that the money always belongs to the government and it is merely held in trust by the business owner. Therefore, when a business fails to pay employment taxes, they are actually stealing from the government. Thus, enforcement efforts regarding unfulfilled payroll tax obligations are often extremely aggressive. Business owners who have experienced a payroll tax enforcement action often compare the ordeal to being “guilty until proven innocent.”
Furthermore, the failure to properly handle payroll taxes can result in responsible parties being held personally liable for the payroll tax improprieties. On the federal level, certain responsible parties can be held personally liable for unpaid payroll taxes. At the state level, “A Fair Day’s Pay Act” was signed into law in 2015 and became effective in 2016. Under the law, liability for willful wage and hour violations is expanded to include owners, directors, officers, and managing agents of the employer. It is essential for businesses to properly handle payroll tax obligations.
California Businesses Must Also Handle Sales and Use Tax Obligations
Businesses in California are also generally required to account for and pay over sales and use tax obligations. Sales tax is generally imposed on goods sold in California. Use tax is generally imposed on goods purchased from outside of the state but is imported into the state for usage. Businesses must account for and pay their fair share of payroll and use taxes. The failure to do so will significantly increase the likelihood of facing an audit or another tax enforcement action.
Careful Guidance Regarding Income and Corporate Taxes
Businesses in California are also obligated to pay taxes on income or a franchise tax. The exact taxes an entity will pay is based on its form of organization, the level of income, and tax planning and other factors. Satisfying all income tax obligations is essential for a business. Businesses that fail to do so can expect to face enforcement action by the California Franchise Tax Board for state tax obligations and the IRS for federal income tax obligations.
Tax Minimization Guidance for Businesses in California
Businesses in California are generally subject to a high level of taxes and other financial obligations. As such, it is often essential for businesses to reduce their liabilities where they can. One of these areas where businesses strive to reduce expenses is in their tax obligations. However, at least some businesses will make mistakes regarding potentially aggressive tax strategies. An inexperienced application of tax minimization techniques can place a business on the hook for significant penalties and fines. The tax attorneys at NewPoint Law Group are sensitive about staking out overly aggressive tax positions. We will support any and all tax-savings positions we recommend.
Work with Small Business Tax Lawyers in Roseville
If your business is seeking guidance in handling its tax obligations while also legally minimizing the amount of tax it is required to pay, the tax attorneys of NewPoint Law Group can help. Our lawyers can take a comprehensive approach to tax law and handle payroll tax, sales tax, use tax, income tax, and all other tax obligations your business may face. To schedule a free and confidential consultation regarding how our approach can help your bottom line, please call 1-800-358-0305 today.