2008 California Tax Brackets
October 6th, 2010
Question: Is the $800 California annual franchise tax on a single-owner LLC in addition to personal income tax?
For instance, if I’m taxed as sole proprietor on my single-owner LLC, and make $20,000 net (and my income tax bracket is 10%), do I have to pay the $2000 PLUS the $800, or just $2000 since my income tax exceeded the minimum of $800?
Also, California Form FTB 3522 states:
“The annual LLC tax is due and payable by the 15th day of the 4th month after the beginning of the LLC’s taxable year (fiscal year) or April 15, 2008 (calendar year).”
So right now (in March) I create an LLC with the default sole proprietorship status, when is the minimum $800 due? 4 months after I setup the company, or on April 15th?
Answer: At the state level, your LLC is treated as a separate entity unlike the Federal treatment as a disregarded entity. The minimum $800 franchise tax is assessed on the LLC so it’s in addition to your personal tax liability.
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