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California Franchise Tax Assistance

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California Franchise Tax Assistance


What is California Franchise Tax (CA 568)?

In California, LLCs are subject to the mandatory California Franchise Tax, which applies to LLCs operating within the state. They must file CA Form 568 (Limited Liability Company Return of Income) and pay an annual franchise tax of $800. This rule applies to disregarded entities or partnerships. The $800 annual tax is due, even if the LLC is not conducting business, until it is canceled. There are also additional fees for LLCs with annual income equal to or over $250,000. Form 568 provides a detailed overview of the LLC’s financial transactions throughout the year, covering everything from income to property distributions, refunds, withholdings, and use tax.

Who needs to file:

Form 568 filing is required for every LLC not taxed as a corporation under the following circumstances:

  • The LLC conducts business activities within California.
  • The LLC is established under California laws.
  • The LLC, though formed in another state or foreign jurisdiction, is registered with the California Secretary of State.
  • The LLC earns income from California sources (Nonregistered foreign LLCs, refer to Exceptions to Filing Form 568 below).

When to file?

  • If an LLC is classified as a partnership for tax purposes, Form 568 must be filed by the 15th day of the 3rd month after the end of the taxable year.
  • If the LLC is classified as a single member LLC but owned by pass-through entities (S corporations, partnerships, or LLCs classified as partnerships), Form 568 is due by the 15th day of the 3rd month after the close of the taxable year.
  • If the LLC is classified as a single member LLC but owned by an individual, Form 568 is due by the 15th day of the 4th month after the close of the taxable year of the owner.

When to pay tax?

  • The 2024 $800 annual tax is due before the 15th day of the 4th month after the beginning of the 2023 taxable year (fiscal year) or April 15, 2022 (calendar year).
  • This payment should be submitted with form FTB 3522. Do not mail the $800 annual tax with Form 568.
  • It’s important not to mail the $800 annual tax with Form 568.

Our Services:

  • Tax Planning and Compliance: Craft comprehensive tax strategies to ensure your business meets its obligations and takes advantage of available deductions and credits.
  • Financial Analysis: Delve into your financial data to provide accurate reporting and identify opportunities for tax optimization.
  • Tax Filing Assistance: Our experienced professionals take care of your annual franchise tax filings, including no-tax-due reports and accurate tax calculations.
  • Deadline Management: Ensure your business meets all filing deadlines, preventing unnecessary penalties and interest charges.

Why Choose DimovTax?

  • Expertise: Our team comprises seasoned CPAs with a deep understanding of California tax regulations.
  • Personalized Service: Tailored solutions to meet your unique business needs.
  • Proactive Guidance: Keep you informed about changes in tax laws and help you plan ahead.

Get Started Today!

Ready to take control of your California franchise tax obligations? Contact us below to get started. We are here to support your business success by ensuring tax compliance and optimizing your financial strategy. This draft follows the structure and content of the existing Texas franchise tax landing page, tailored to the specifics of California franchise tax.

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