Do you have to pay the $800 California S Corp fee the first year?
The First-Year Franchise Tax Exemption In the second year and beyond, corporations are subject to the annual $800 minimum franchise tax rule.
The first-year exemption only applies to S corporations, C corporations, LPs, LLPs and LLCs that elect to be taxed as a corporate entity..
How can I avoid $800 franchise tax?
The only way to avoid the annual $800 California franchise fee is to dissolve your company, file a ‘final’ income tax return with the FTB and to submit the necessary paperwork. Once your company no longer exists, neither does your liability protection.
How do I pay annual fees for LLC in California?
Every two years after filing the initial Statement of Information, the LLC must pay a fee of $20 and file either a Statement of Information or a Statement of No Change (Form SI-550). If you have hired a registered agent, those associated fees must also be paid each year.
What happens if you don’t pay LLC fee?
When you do not pay your minimum LLC tax of $800 the FTB will charge you a penalty. Eventually, if you do not pay the tax your LLC will be suspended. The FTB will continue to charge you the $800 fee until the LLC is dissolved.
What happens if you don’t pay California Franchise Tax?
The California Franchise Tax Board imposes a penalty if you do not pay the total amount due shown on your tax return by the original due date. The penalty is 5 percent of the unpaid tax (underpayment), plus 0.5 percent of the unpaid tax for each month or part of a month it remains unpaid (monthly).
How much does it cost to file an S Corp in California?
You must file the Articles of Incorporation with the California Secretary of State, along with a filing fee of $100. Note that your corporation will also be responsible for an annual tax of $800 to the California Franchise Tax Board.