Small Business Tax Filing California

Small Business Entity Types

The entity type determines which tax returns you file. Sole proprietors file Schedule C on their personal Form 1040. Single-member LLCs are treated as sole proprietors by default. Multi-member LLCs file Form 1065 (partnership return). S corporations file Form 1120-S. C corporations file Form 1120. Each entity type has different tax rates, filing deadlines, and California requirements.

Which Returns to File

Payroll Tax Filing

Businesses with employees must file payroll tax returns quarterly (Form 941 federal, DE 9 California) and annually (Form 940 federal, DE 9ADJ California). Payroll tax deposits are due on a semi-weekly or monthly schedule depending on payroll size. W-2s must be issued to employees and filed with the IRS and California by January 31. 1099-NECs must be issued to contractors and filed by January 31. KDA handles payroll tax compliance for business clients as part of our business tax service.

California Business Tax Requirements

California has several business tax requirements beyond the income tax return: (1) Statement of Information — LLCs and corporations must file a Statement of Information with the Secretary of State annually or biennially. (2) Seller's Permit — businesses selling taxable goods must register with the California Department of Tax and Fee Administration (CDTFA) and file sales tax returns. (3) Business license — most California cities require a local business license. (4) EDD registration — businesses with employees must register with the EDD and file quarterly payroll tax returns.

Key Filing Deadlines

California small business filing deadlines for calendar-year entities: January 31 (W-2s and 1099s), March 15 (S corp and partnership returns), April 15 (individual, C corp, and LLC returns), April 30 (Q1 payroll tax returns), July 31 (Q2 payroll tax returns), October 31 (Q3 payroll tax returns), January 31 (Q4 payroll tax returns). KDA maintains a filing calendar for every business client and sends reminders before each deadline.

Common Small Business Filing Errors

The most common errors KDA corrects on small business returns: (1) Missing the March 15 deadline for S corp and partnership returns (not April 15). (2) Failing to file California Form 568 for single-member LLCs. (3) Applying federal bonus depreciation on the California return. (4) Not paying the California $800 minimum franchise tax by April 15. (5) Failing to issue 1099-NECs to contractors paid $600 or more. (6) Mixing personal and business expenses in the same bank account.