Small Business Tax Attorneys | Roseville, CA

California Small Business Tax Obligations

Small businesses in California face a layered set of federal and state tax obligations. Depending on the business structure and activities, these may include federal income tax, California income tax or franchise tax, payroll taxes (FICA, FUTA, SUI, SDI), sales and use tax, business property tax, and any applicable local business license taxes.

Understanding which obligations apply to your business — and structuring your affairs to legally minimize tax while remaining compliant — is a core function of small business tax counsel.

Entity Choice and Tax Implications

The legal structure of your business has a direct and ongoing impact on your tax obligations. Sole proprietorships and single-member LLCs are subject to self-employment tax on all net profits. S corporations allow owners to split income between salary and distributions, potentially reducing self-employment tax exposure. C corporations are subject to the corporate income tax rate but face double taxation on dividends.

California imposes an $800 minimum annual franchise tax on LLCs, S corporations, and C corporations doing business in the state, as well as a graduated LLC fee based on gross receipts. Our attorneys help small business owners evaluate entity structure in light of their specific financial situation and goals.

Audit Risk and Compliance for Small Businesses

• Accurate reporting of all business income, including cash receipts

• Proper substantiation of business expense deductions (travel, meals, home office, vehicle use)

• Correct worker classification and timely payroll tax deposits

• Sales tax collection and remittance for taxable goods and services

• Use tax on business purchases from out-of-state vendors

Resolving Small Business Tax Problems

When a small business faces an IRS or California tax audit, receives an unexpected assessment, or falls behind on tax obligations, the consequences can threaten the business's survival. Our tax attorneys help small business owners in Roseville and throughout Northern California resolve tax disputes efficiently and get back on solid footing.