@SuperShank76 Let's say you start your company on January 10, 2011. You have 90 days to pay the $800 LLC tax for 2011. When you file your Form 568 for tax year 2010 (next April), it'll be, as you saw, the 2011 form--but you'll be paying the 2012 LLC tax voucher, because you (supposedly) already paid the one for 2011. That's how it always is: on Form 568 you're reporting in past tense; on the voucher you're paying in present tense.
I am so much thrilled when i found this video, as i am struggling on how to fill the Form 568. My LLC established in California at the end of April, 2016, and i sent Form LLC-4/8 to SOS to close at the beginning of Oct,2016, and have been told that i no need to pay that $800. Now i need to fill the Form 568, feeling so difficult to do it, Can you share some experience about this case? very appreciate!!!!
Hello Dear, in 2020 I have the exact same problem as you. i finished Form LLC-4/8. but i need to do Form 568. the company didn't conduct any business. So i have no idea have to fill out Form 568. if you don't mind please share your experience?
The word "trick" is an interpretation, yes, but it is deliberately used. It's safe to assume that most new filers only dig into the instructions when something on the form itself seems unclear. And since the FTB appears to have deliberately chosen definitions for "tax" and "fee" that are contrary to most people's understanding of those terms, I submit that it is done deliberately in order to raise extra revenue by tricking people into filling out the form incorrectly.
This is a great FYI! Thank you Mr. Toombs for sharing your mistake so that I won't make the same mistake because I probably would have in my brand new business tax preparation process.
Great video - if I have not done business with my LLC in less than 6 months after opening up my LLC- can you advise which pages to complete so I can dissolve my LLC?
@yieldhog The form is still identical this year. I just looked, and there this trick is, waiting to entrap the unwary. As for amending the return, my recollection is that that doesn't work. You can amend the return, sure, but the FTB will still claim that you underpaid the tax on the due date, therefore all the penalties would still be due.
Seven years later and this is still perfectly good info. I laughed so hard when you said "Don't. Do. This. Or you will get This." and "oh no, there's more!" Good old FTB...now in 2015 they're requiring e-filing (or a waiver for the 2014 tax year). SMLLCs will have to pony up for TTax Business in future years unless CA continues to grant "technical" waivers or TTax allows e-filing 568 in the home and business version (I'm not holding my breath). Hopefully someone will come along and offer CA 568 filing online as a standalone service, much like 1099's and 1096's for the IRS.
Thank you! I will do more research to see if this is still how it is in 2017 filing for 2016. I think it's still relevant, because it looks familiar. This LLC "tax" is soooo confusing!
To make this even more confusing, when you want to shut down your LLC or change to a sol prop, you'll need to file a cancellation to the Secretary of State and follow up that they actually process your paperwork and send it to the State of CA Franchise Tax Board or else the FTB will keep charging you the $800 annual LLC tax.
I have made this mistake every year for the past four years. Two questions: (1) is there a way to clawback the penalties by amending the return. I litterally make no money in my LLC as it is being parked for future activities; and (2) does this still apply for 2010?
If I additionally fill out the 2008 tax voucher along with 2007 form,wouldn't that mean that I'll do the 2008 form along with 2009 tax voucher when I am filing my 2008 tax return, effectively paying LLC tax for 2008 twice?
But what often happens is that people don't realize they need to pay the $800 LLC tax that soon, so they put it off till they're doing their Form 568. Then they realize what the rule is, and they find they owe BOTH the 2011 tax (which is late and will have penalties assessed) and the 2012 tax. In that case, yep, they're effectively getting taxed twice in the same year. Which kinda sucks.
Each state has its own methodology of filling tax returns. California is certainly one of those states where tax payers can use all of the legitimate information they can get.
Does anyone know if TurboTax figures all this out correctly...? Or if any changes (dare I hope for improvements) have been made since this video (thanks for it, by the way....)
Hello Dear, I created LLC in CA in 2019 December. since then the company didn't conduct any business. it was inactive until now. i am trying to close my LLC. I finished Form LLC-4/8. Butt I need to do Form 568. So I have no idea have to fill out Form 568. Should I just fill out everything 0$ on form 568? if you don't mind please help and give me some information?
Rick, I'm afraid the answer is: open your window and hand $800 to the state. The tax and the fee are separate things, and the state would like both from you.
@SuperShank76 Let's say you start your company on January 10, 2011. You have 90 days to pay the $800 LLC tax for 2011. When you file your Form 568 for tax year 2010 (next April), it'll be, as you saw, the 2011 form--but you'll be paying the 2012 LLC tax voucher, because you (supposedly) already paid the one for 2011. That's how it always is: on Form 568 you're reporting in past tense; on the voucher you're paying in present tense.
I am so much thrilled when i found this video, as i am struggling on how to fill the Form 568. My LLC established in California at the end of April, 2016, and i sent Form LLC-4/8 to SOS to close at the beginning of Oct,2016, and have been told that i no need to pay that $800. Now i need to fill the Form 568, feeling so difficult to do it, Can you share some experience about this case? very appreciate!!!!
Hello Dear, in 2020 I have the exact same problem as you. i finished Form LLC-4/8. but i need to do Form 568. the company didn't conduct any business. So i have no idea have to fill out Form 568. if you don't mind please share your experience?
SO GLAD I stumbled upon this video. Thank you for educating me on this subject!
The word "trick" is an interpretation, yes, but it is deliberately used. It's safe to assume that most new filers only dig into the instructions when something on the form itself seems unclear. And since the FTB appears to have deliberately chosen definitions for "tax" and "fee" that are contrary to most people's understanding of those terms, I submit that it is done deliberately in order to raise extra revenue by tricking people into filling out the form incorrectly.
This is a great FYI! Thank you Mr. Toombs for sharing your mistake so that I won't make the same mistake because I probably would have in my brand new business tax preparation process.
Great video - if I have not done business with my LLC in less than 6 months after opening up my LLC- can you advise which pages to complete so I can dissolve my LLC?
Thank you so much for this video! It was really useful for me. It very difficult talk with them or have a support online.
@yieldhog The form is still identical this year. I just looked, and there this trick is, waiting to entrap the unwary. As for amending the return, my recollection is that that doesn't work. You can amend the return, sure, but the FTB will still claim that you underpaid the tax on the due date, therefore all the penalties would still be due.
should sue for entrapment
Seven years later and this is still perfectly good info. I laughed so hard when you said "Don't. Do. This. Or you will get This." and "oh no, there's more!" Good old FTB...now in 2015 they're requiring e-filing (or a waiver for the 2014 tax year). SMLLCs will have to pony up for TTax Business in future years unless CA continues to grant "technical" waivers or TTax allows e-filing 568 in the home and business version (I'm not holding my breath). Hopefully someone will come along and offer CA 568 filing online as a standalone service, much like 1099's and 1096's for the IRS.
I'm thinking of starting a CA LLC next year. I realized the info is kind of dated... but for the insight... Thank you so much for making this video!
When I last did taxes for this LLC (for tax year 2013), everything discussed in this video was still completely true. I am very sad about saying that.
Thank you! I will do more research to see if this is still how it is in 2017 filing for 2016. I think it's still relevant, because it looks familiar. This LLC "tax" is soooo confusing!
Esther Sorenson what a the link to get the form?
Thank you sooooo much. Filing in 2019 and WOW this was so helpful!
Thank you so much! I really appreciate that you shared this knowledge. I wish you the best on your business always!!
To make this even more confusing, when you want to shut down your LLC or change to a sol prop, you'll need to file a cancellation to the Secretary of State and follow up that they actually process your paperwork and send it to the State of CA Franchise Tax Board or else the FTB will keep charging you the $800 annual LLC tax.
I have made this mistake every year for the past four years. Two questions: (1) is there a way to clawback the penalties by amending the return. I litterally make no money in my LLC as it is being parked for future activities; and (2) does this still apply for 2010?
If I additionally fill out the 2008 tax voucher along with 2007 form,wouldn't that mean that I'll do the 2008 form along with 2009 tax voucher when I am filing my 2008 tax return, effectively paying LLC tax for 2008 twice?
could do a video about doing the 568 form please?
But what often happens is that people don't realize they need to pay the $800 LLC tax that soon, so they put it off till they're doing their Form 568. Then they realize what the rule is, and they find they owe BOTH the 2011 tax (which is late and will have penalties assessed) and the 2012 tax. In that case, yep, they're effectively getting taxed twice in the same year. Which kinda sucks.
So do you file a schedule c and form 568 if you are doing business in california?
So I pay an annual fee to my LLC, would I put that fee amount down in the number 2 spot or just leave it $0?
Thank you so much for this information.
Sigh i registered in late december and now the state wants 800 for 2011 and 800 for 2012.
Each state has its own methodology of filling tax returns. California is certainly one of those states where tax payers can use all of the legitimate information they can get.
Does anyone know if TurboTax figures all this out correctly...? Or if any changes (dare I hope for improvements) have been made since this video (thanks for it, by the way....)
This is the 1st year I started LLC on 1/20/2016, do I need to file FTB3536?
Thank you! This was extremely helpful!
Is the california LLC tax deductible?
Where is the 2017 form?
THANK YOU.
thanks for making this video
Hello Dear, I created LLC in CA in 2019 December. since then the company didn't conduct any business. it was inactive until now. i am trying to close my LLC. I finished Form LLC-4/8. Butt I need to do Form 568. So I have no idea have to fill out Form 568. Should I just fill out everything 0$ on form 568? if you don't mind please help and give me some information?
Did you ever end up figuring this out?
I didnt pay my fee right after I signed up for my LLC, how do you put that on the form correctly or is it seperate?
@yieldhog I did the same thing now Im scared to go see how much I owe. Chalk this up to wealth education fund.
Hi,does the $800 LLC tax go towards the tax i owe for the year? OR its just an out the window cost for having an LLC?
Rick, I'm afraid the answer is: open your window and hand $800 to the state. The tax and the fee are separate things, and the state would like both from you.
Make
An updated video
What's p.o box u send the documents
THANK YOU!!!
Thank uuuuuuuuuuuuuuuuuuuuuuuuuuuu