2019 Tax Season
January 30th, 2019
ATTN: Independent Contractors, Self-Employed, Freelancers, Sole Proprietors, Small Business Owners, Partnerships, Fictitious Business Names (DBAs), Loan-Out Co.s, LLCs, Corp.s, S-Corp.s doing Business within the County of Los Angeles!
Let’s Fight Back!
AVOID Unnecessary City of L.A., Office of Finance Penalties!
There are no Extensions: YOU MUST COMPLY with Business Registration by February 28, 2019! Read full details on how to register below.
Dear Client, We hope that ’19 is off to a great start!
First of all, it’s not too soon to schedule your tax appointment for your 2018 tax preparation! Contact Izaira@taxplus.com or call 310.398.3231.
AVOID PENALTIES! City of LA Business Tax Renewals Deadline is February 28th
When you are self-employed or operating a small business within any city you will have many additional responsibilities. One of these responsibilities is to register and possibly pay taxes with the city or cities in which you do business. The City of Los Angeles, Office of Finance enforces that requirement for the County of Los Angeles. They issue a Business Tax Registration Certificate or “Business License” to those who are registered. Although this requirement is not new, in recent years the City of Los Angeles has started to enforce the registration and taxes militantly.
Issues Specific To City Of LA City Taxes
The issues with the City of Los Angeles campaign to enforce city taxes are two-fold. First of all, when the city decided to enforce the law, they did not start with a public relations effort encouraging registration and compliance. They simply started sending DISCOVERY letters to self-employed individuals and small business owners based on information from State of CA tax filings. These DISCOVERY letters do not provide late relief from taxes or interest for those who would have otherwise qualified for the small business or creative artist exemptions. They will however waive penalties upon your request.
Strange Filing Deadline
The second issue with the City of Los Angeles campaign is that its filing due date of February 28 each year is unfair to many and should be changed to April 15th. Although tax preparers could handle this registration or advise clients, we cannot take the responsibility for the filing because we meet with many clients for tax preparation after February 28th. Even though tax preparers can try to advise clients ahead of time about the requirement, there are new clients that will miss the deadline because they engage our services after February 28th. The City of Los Angeles does not provide an option for extensions. After February 28th the registration is late and subject to tax and interest even though you might other wise be eligible for exemptions. Therefore, it becomes the client’s responsibility to handle this registration timely.
It’s Your Responsibility To Register
Since it is the self-employed individual or small business client’s responsibility you should be aware of the following information. At any time during 2018, if you operated through self-employment or as a business owner within the County of Los Angeles, the business tax registrations and renewals for 2018 calendar year are due by February 28th. This includes self-employment or business operation with zero income, claiming any business expenses.
This requirement is very broad and applies to independent contractors, self-employed, freelancers, sole proprietors, small business owners, partnerships, fictitious business names (DBAs), loan out co.s, and business entities such as LLC’s, S-Corp.s, C-Corp.s, etc…
Are You Exempt?
The good news is that you may qualify for the Small Business Tax Exemption for businesses with total gross income under $100,000, or the creative artist exemption for total gross income under $300,000 – but ONLY if you file before February 28, 2019! For other possible industry exemption amounts, please visit the City of Los Angeles, Office of Finance website: https://finance.lacity.org/ or call 844.663.4411.
Once again, if you do not register for 2018 calendar year operation by the deadline you will pay taxes, penalties and interest even if you were otherwise eligible for an exemption!
Are You Operating Within LA County Limits?
The City of Los Angeles, Office of Finance has a way to DISCOVER that you are operating within the county limits. Clients who have filed a State of CA tax filing within the county zip codes are receiving DISCOVERY letters, requesting disclosure of gross income generate in previous years! In other words, the State of CA is collaborating with the City of Los Angeles to identify self-employed individuals and businesses. The unfortunate outcome of this DISCOVERY letter is that you will not be eligible for any exemptions. The City of Los Angeles, will calculate tax, penalties and interest and you will receive a bill.
If you receive any correspondence, DISCOVERY letters or bills from the City of Los Angeles, Office of Finance we can help you respond. We may be able to help you mitigate the tax bill. It turns out that if you are late with the registration and the City of Los Angeles assesses taxes, penalties and interest, you can request abatement (removal) of penalties by indicating that you were not aware of the annual business registration requirement.
Options For Registration
Once again, at your request for a flat $100 fee we can help you comply with business registrations or respond to the City of Los Angeles, Office of Finance. However, it is your responsibility as a self-employed individual or business to comply annually, by the deadline.
Contact Izaira@taxplus.com or call 310.398.3231 to Help You Comply, Or Contact The City of Los Angeles, Office of Finance Directly:
City of Los Angeles, Office of Finance 844.663.4411
For more information visit: http://finance.lacity.org/
City of Los Angeles, Office of Finance Locations:
Van Nuys Civic Center
West Los Angeles