If you are an LLC in California, you need to know what the LLC fee is all about.

LLC, short for limited liability company, is a business structure that has become popular in recent years due to its flexibility and tax benefits.

If you start to operate an LLC business in California, you need to pay the first $800 fee in the 4th month after the approval of your LLC.

After that, you will also need to pay another $800 in annual franchise tax due on April 15 every year.

To pay that, you need to file Form 3522, called the LLC Tax Voucher.

California LLC Annual Franchise Tax

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Every LLC company in California is required to pay the Annual Franchise Tax of $800 whether their company has an income or not.

On the other hand, LLC companies that make more than $25,000 or more during the tax year will have to pay a $900 additional fee.

You will have to file a limited liability company return called Form 3536 (Estimated Fee for LLCs).

Remember that as your income increases, this additional fee will increase as well.

However, if your company makes less than $25,000 during the tax year, you don't have to worry about this additional fee.

Due Dates for the First Year Annual Tax Payment

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The annual fee must be paid in the fourth month after filing for LLC, which is around six to ten months after registering your business.

And this will be during the fourth quarter of every year.

For example, if you filed your LLC application in January 20220, you need to pay your annual franchise fee by October 15, 2020.

Now, you need to remember that even if your LLC annual franchise tax is due on April 15, you should not send it to the California Franchise Tax Board at that time.

What you should do instead is to file for an extension with the California Secretary of State first before paying the fee.

The required Form 3536 must be filed by mid-March so you can get an automatic 6-month extension until October 15.

If you are wondering why the fee should not be sent to the Franchise Tax Board before filing for Form 3536, it is because there is no way for them to accept your payment if you do not fill out this form first.

The annual $800 would be due every April 15 during the next four years until your company has to file for renewal.

This would be done by filing form 3538 on or before the 15th day of the 4th month after any fiscal year ends on March 31.

California LLCs are obligated to pay taxes in full every year even if they still owe money from the previous year.

Failure to include the annual fee on your tax filings would mean not only late fees but also eventual suspension of your company's status as a legal business entity in California.

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Finding a California Accountant

If you are looking for an accountant to handle your California LLC Annual Franchise Tax, you can find the one best suited for your business with Thumbtack's free online service.

Hiring an accountant within Thumbtack helps provide transparency throughout the hiring process, allowing you to see reviews of each professional before making a final decision.

By using Thumbtack's free service to hire an accountant, you can ensure that your company gets the best service for the lowest price.a

California Franchise Tax Board Contact Info

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To contact the California Franchise Tax Board, you can call 1-800-852-5711 or visit their website at http://www.ftb.ca.gov.

The California Franchise Tax Board is responsible for processing tax returns and issuing tax refunds in the state of California, including non-residents who work in the state.

They are also responsible for processing tax payments and tax forms, including the California State Personal Income Tax Return (Form 540) and California Fiduciary Income Tax Return (Form 541).

FAQs

Do All LLCs Have to File a Return?

In general, most states require LLCs to file various tax returns.

The state uses these returns to ensure that LLCs comply with state laws and regulations, including those that govern LLCs' taxation.

Is the 800 LLC Fee Deductible for California?

No, the $800 fee is not deductible for California state tax purposes.

What Happens if You Don’t Pay LLC Tax?

If you neglect or refuse to pay your tax dues with impunity, then your business will most probably face the consequences.

For instance, the state could dissolve your LLC. This is one of the direst results of failing to pay LLC tax.

Other possible implications are fines or penalties, though these are not as severe as dissolution.

California Franchise Tax $800: Final Thoughts

Overall, it's critical to pay all of your taxes on time, particularly whether they're an LLC fee or an annual tax.

It is essential to pay your taxes and obey the taxation rules given by the country where your LLC is located to safeguard your business from penalties.

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