This post in one in a four-part series explaining how the California Department of Tax and Fee Administration (CDTFA) performs its audit function, what to expect from an audit, how to prepare for it, and what happens when the audit is complete.
Blog
Common Tax Issues for Small Businesses
Small businesses, of which there are thousands in California, spend the highest percentage of time of any business entity preparing and submitting taxes. Federal, state, and local tax requirements are extremely complex and change every year.
Multiple agencies administer different taxes, and each has its own set of rules and methods of payment. It is no wonder that small business owners often have common tax issues and outcomes of inadvertent noncompliance.
California Payroll Tax Problems and the EDD
Part of being a business owner is filing and paying payroll taxes for your employees. In California, the Employment Development Department, or EDD, administers these taxes. In addition to receiving tax filings and payments, the EDD also identifies and investigates potential infractions of tax law.
What do you do if you develop tax problems and find yourself on the receiving end of an audit?
Do You Need California Sales Tax Defense?
The Board of Equalization is the California public organization that administers the state sales and use tax law and regulations. The BOE also conducts audits, collects unpaid California state sales and use taxes, and administers the state property tax.
There are presumptions of the tax code that the BOE follows in its operation and decision-making process. The BOE presumes:
- All sales are taxable unless specifically exempted
- Exemptions must be supported by documentation
- The taxpayer is responsible for maintaining and providing documentation in case of examination or audit
How FTB Tax Liens Affect Your Credit Report
As if taxes were not complicated and frightening enough, the federal and state taxing authorities have a variety of devices in their arsenal to compel payment and stave off penalties.
Tax liens, one of the most common of those devices, can cause trouble not just with your property and bank accounts, but with your credit score and ability to obtain lines of credit.
Federal Payroll Tax: What the IRS Expects from Business Owners
If you have employees, you are liable for federal payroll taxes. Some taxes are withheld from your employee’s wages, some you must pay yourself.
The Internal Revenue Service, or IRS, administers payroll taxes as part of its responsibilities. Remaining in compliance means understanding how and when payroll taxes are calculated, filed, and paid.
Explanation and Penalties of Sales Tax Fraud in California
Sales tax is added to almost every piece of merchandise sold in the State of California. It adds to the city, county, and state coffers to help pay for services everyone enjoys.
Sales tax can also be a lure into illegal activity. Sometimes it is not intentional. A retailer makes an error that can be attributed to complexity of the tax code. This is merely negligence.
Other times, it is very intentional. Then it becomes sales tax fraud.
California Self Employment Tax 2022: What You Must Know!
With so much conflicting information about the California self employment tax process floating around online, it can often be difficult for a lot of people to figure out precisely what these taxes are, how they’re calculated, paid, and what the consequences of non-payment might be.
What Are the California Payroll Tax Penalties If I Don’t Pay?
As an employer, you are obliged to file payroll tax returns and pay payroll taxes. While the obligation can feel burdensome, especially when times are tough and cash flow is slow, this is obligation that you must never delay. Substantial penalties may accrue to any employer who doesn’t file correctly, leaving you in a far worse situation than before.
The CDTFA and California Tax Liens
The consequences of falling behind on your taxes are difficult for anyone, but when we are talking about businesses, sales taxes, and the California Department of Tax and Fee Administration (CDTFA), the results can be devastating. The CDTFA is particularly aggressive about investigating and pursuing unpaid sales taxes, and will often demand immediate payment of any liability, no matter what other types of financial responsibilities or consequences the business may be facing. One of the most powerful “weapons” in the CDTFA’s arsenal of collection tactics is the tax lien. Understanding how liens work, why they happen, and what to do if one is recorded against you is important in order to protect your business during times of financial difficulty.