{"id":120,"date":"2015-02-23T14:22:49","date_gmt":"2015-02-23T22:22:49","guid":{"rendered":"http:\/\/www.evanssvcs.com\/?p=120"},"modified":"2015-02-23T14:24:43","modified_gmt":"2015-02-23T22:24:43","slug":"common-business-tax-misconceptions","status":"publish","type":"post","link":"http:\/\/www.evanssvcs.com\/?p=120","title":{"rendered":"Common Business Tax Misconceptions"},"content":{"rendered":"

Over the years I have noticed some reoccurring misconceptions when it comes to business taxes.\u00a0In this post I am addressing some of the ones I have heard most frequently. If you have any questions about business taxes, please contact me at\u00a0 (323) 380-8714, or Questions@EvansSvcs.com<\/a><\/p>\n

If my business is registered in Nevada\/Delaware I don’t have to pay state taxes even though my business operates in California.\u00a0<\/strong><\/p>\n

Generally if a Corporation or LLC \u00a0company does business in California, it must pay taxes to California.\u00a0Doing business generally means the business\u00a0has employees working in the state on behalf of the company,\u00a0owns real, or personal (furniture, equipment computers, etc.) property in the state, or does a number of other activities in California.\u00a0In addition, if your business operates in California, it is required to register to do business within California, regardless of where it was incorporated.<\/p>\n

States such as Nevada and Delaware heavily promote using their states for incorporation. These states have favorable business\u00a0laws that do a lot to\u00a0protect a business and its shareholders in the event of a lawsuit. In addition, they have minimal business taxes, which are\u00a0a great benefit to businesses operating in those states. Generally, those are the reasons why businesses choose incorporate in those states, but those advantages do not waive any requirements put forth by other states.<\/p>\n

A Single Member LLC doesn’t have to pay taxes in California.<\/strong><\/p>\n

I addressed this in another post here<\/a>, but the summary is that\u00a0any LLC doing business in California, regardless of where it was formed is required to pay taxes in California. It pays to be aware of this rule, especially if you’re thinking of moving your Single Member LLC from another state to California.<\/p>\n

The government cannot require shareholders\/partners\/corporate officers to pay unpaid business taxes.\u00a0<\/strong><\/p>\n

Under certain circumstances shareholders and\/or corporate officers can be held personally responsible for business taxes. I always recommend that a business in trouble should pay its payroll and sales taxes before anything else\u00a0for this exact reason. Typically these debts are not dischargeable\u00a0in bankruptcy either. You don’t want to wind up making payments to\u00a0the IRS or the State for 20 years because of a business error.<\/p>\n

Credit\/Debit card statements are just as good as actual receipts in case you’re audited.<\/strong><\/p>\n

The official stance of the IRS is that credit\/debit card statements are not an acceptable substitute\u00a0for actual receipts. While you may find that some IRS agents are willing to accept them to prove that a deduction is justified, most will\u00a0not.<\/p>\n

If the business pays for it, it’s automatically deductible.\u00a0<\/strong><\/p>\n

This one is sounds a little broad, but follow me.\u00a0If your business pays for your car\/home\/non-business meals, the IRS will require that you allocate a portion of these expenses to personal use, and either deny the deduction at the business level, or require that the owner\/shareholder report the portion of personal\u00a0use on their personal tax return.<\/p>\n","protected":false},"excerpt":{"rendered":"

Over the years I have noticed some reoccurring misconceptions when it comes to business taxes.\u00a0In this post I am addressing some of the ones I have heard most frequently. If you have any questions about business taxes, please contact me at\u00a0 (323) 380-8714, or Questions@EvansSvcs.com If my business is registered in Nevada\/Delaware I don’t have…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,6],"tags":[],"class_list":["post-120","post","type-post","status-publish","format-standard","hentry","category-blog","category-business-tax"],"_links":{"self":[{"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/posts\/120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=120"}],"version-history":[{"count":3,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/posts\/120\/revisions"}],"predecessor-version":[{"id":136,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=\/wp\/v2\/posts\/120\/revisions\/136"}],"wp:attachment":[{"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=120"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.evanssvcs.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}