Proposition 30 Retroactively Raises Taxes in California

by Matthew Burgess on November 29, 2012

This update comes directly from Thor Eakes, CPA and partner at Murrill Eakes & Company in San Diego.

On November 6th, taxpayers voted for a tax increase retroactive to January 1, 2012. The following rate increases are effective for seven years:

Increase to 10.3% (1% increase) for individuals making over $250,000 and married filing joint filers making over $500,000.

Increase to 11.3% (2% increase) for individuals making over $300,000 and married filing joint filers making over $600,000.

Increase to 12.3% (3% increase) for individuals making over $500,000 and married filing joint filers making over $1,000,000.

Proposition 30 also increased the state sales tax by .25% for four years beginning January 1, 2013.

The income tax rates below the income amounts above is 9.3%.

This is a very steep increase for high income taxpayers in California and will negatively impact their decision for making a living in California.

Contact Thor Eakes or your CPA if you have questions.

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

If you're new here, you may want to subscribe to my RSS feed or Subscribe to Formation Solutions by Email. Thanks for visiting!

{ 1 comments }

Collect Your Unclaimed Property from California

by Matthew Burgess on August 17, 2011

Our friends at the accounting firm of gishSeiden have brought this to our attention:

We want to remind you that the State of California may be holding property or money belonging to you. The California State Controller’s office has received unclaimed property belonging to over 13 million individuals and companies. This includes bank accounts, stocks, bonds, uncashed checks, and safe deposit box contents. Most accounts are turned over to the State when there is no owner contact with the institution or account for 3 years. Often the owner forgets the account exists or moves and does not leave a forwarding address. [click to continue…]

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 1 comments }

Epsilon Security Breach – Protect Your Information

by Matthew Burgess on April 4, 2011

This is no April Fool’s Joke. Some security experts are saying this may be the biggest security breach ever.

On April 1, Epsilon, an online marketing unit of Alliance Data Systems Corp., announced that an outside intrusion had hacked into many of its customer files. In a brief statement, Epsilon says it detected a breach on March 30 during which “clients’ customer data were exposed by an unauthorized entry into Epsilon’s e-mail system.” [click to continue…]

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 2 comments }

The friendly and incredibly knowledgeable experts at Robert Hall & Associates are offering a complimentary seminar on the ins and outs of 1031 Exchanges and Self-Directed IRAs as vehicles for wealth building and retirement planning.

When: Tuesday, March 22, 2011
Check-in/Networking: 6:30pm – 7:00pm
Seminar: 7:00pm – 8:30pm
Where: 300 West Glenoaks Blvd. Suite 300, Glendale, CA 91202
RSVP: By Monday, March 21st to: jennifer@roberthalltaxes.com

Anthony Watson, tax preparer, lecturer, and real estate expert from Robert Hall, will discuss the tax benefits of these two strategies. Then they’ve brought in speakers from two companies that specialize: Exchange Resources, Inc. will discuss how 1031 exchanges work, and how you can gain greater cash flow from your investment property. and IRA Services Trust Company will discuss ways to build, protect and grow retirement wealth through self-directed investing.

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 1 comments }

If you’re wanting to dissolve a California business entity, such as a limited liability company or corporation, you may want to do that right away.

If the entity is dissolved before March 15, and if it has not conducted business in this calendar year, the $800 annual minimum franchise tax for 2011 will not be due, in most circumstances. If you wait until after the 15th, you’ll very likely have to pay $800 for the year.

We can file your Certificate of Cancellation/Dissolution at the counter in Sacramento in the next few days and get you in under the deadline. Begin the process of dissolution by filling out the appropriate form here.

It may take the California Secretary of State’s office weeks or months to process the dissolution paperwork, but the dissolution will be effective on the day they received the filing. This is why you cannot mail it in: you must file it with a courier service, at the counter for hand date-stamping.

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 4 comments }

Long Processing Times Have Returned in Sacramento

by Matthew Burgess on March 2, 2011

In early December of 2010, one could file new Articles of Incorporation or Organization at the counter in Sacramento, and expect about a six day turnaround. And just like last year at this time, processing times have recently extended considerably.

The California Secretary of State is reporting turnaround times for new corporations and LLCs at between 23 and 26 business days.

We’ve reported on this before: with budget cuts and a growth in new filings, the queue at the Secretary of State’s office can be a moving target throughout the year.

There is the 24-hour expedited filing offered by the state, for an additional $350 filing fee. Let us know if you have any questions about the best way to file and speed things up.

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 0 comments }

As the end of the year approaches, one very important question is on the minds of many our clients:

Should we dissolve our unused corporation or LLC, or face another year of taxes?

The end of a relationship can involve a mixture of emotions – pain, happiness, relief. The ending of a business is much the same especially when your business is often one of the most intimate relationships in your life. [click to continue…]

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 1 comments }

Nothing feels worse than paying more than you have to because of your own actions. With all things you manage to drive your business, it can be challenging to keep track of legalities that may seem fairly boring or unimportant by comparison.

The only problem – they aren’t so unimportant.

Forgetting important filings and renewals can cost you a lot in late fees and penalties. The first step is maintaining a list of the things you need to track.

1. Statement of Information. California requires every corporation and LLC to file a Statement of Information with the Secretary of State. For-profit corporations need to file annually based on your date of formation while LLCs and non-profits can file biennially. You’ll only part with $25 if you get your Statement in on time. Once your company becomes delinquent, expect a hefty $250 penalty fee to get everything straightened out. Most other states have a similar filing requirement. [click to continue…]

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 4 comments }

Which Business Entity Saves the Most on Taxes?

by Matthew Burgess on December 18, 2010

Tax concerns are usually at the top of the list when it comes to selecting an operating structure. Here’s a quick overview of a few tax benefits for the most common business entities:

Sole Proprietorship is the default structure if you’re operating on your own and haven’t officially registered your business as a corporation, LLC (Limited Liability Company), or Non-profit.  A sole proprietorship is NOT a legal business entity: you pay personal income tax on your earnings (as well as self-employment tax), can subtract some expenses as itemized business deductions on your tax return, and you’re personally liable for all of the debts the business incurs.

Why it might be a good idea

  • You’re only taxed once on your earnings from the business
  • There’s no need to file a separate tax return for the business
  • Net losses can be “carried” to prior or later tax years to offset tax liability
  • Hidden tax perks, like healthcare reimbursement arrangements and provisions for hiring family members abound

A traditional Partnership is also a “pass through” business entity, and is sometimes seen as the default structure when multiple parties run a business without forming an official entity (like an LLC or corporation). Just like a sole proprietorship, capital gains and income are taxed to the business owners, typically at a higher rate than they would be for some other business structures.

Why it might be a good idea: [click to continue…]

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to Reddit Post to StumbleUpon

{ 8 comments }

Forming a Corporation or LLC in January 2011? File Now: Avoid Long Waits

by Matthew Burgess 11.14.2010

Are you ready to form a new corporation or LLC, but you’re waiting to file your Articles of Incorporation or Organization until January to avoid the $800 California Minimum Annual Franchise Tax? Well, there are a couple things you might want to consider. Share on Facebook

Read the full article →

Phishing Scam Alert: Fake EFTPS IRS Email

by Matthew Burgess 11.01.2010

Formation Solutions, Inc. is providing this notification as a courtesy to our clients and all business owners. Business owners are reporting that they have been targeted by a phishing email scam. The scammers are sending e-mails to businesses in an attempt to lure recipients into clicking a link that directs them to a fraudulent site. [...]

Read the full article →

When to Pay Annual Franchise Tax for a New LLC

by Matthew Burgess 10.16.2010
Thumbnail image for When to Pay Annual Franchise Tax for a New LLC

Every LLC that is doing business in California is subject to the $800 annual tax. This includes any LLC that has articles of organization issued by the Secretary of State, as well as LLC’s that are formed in other states and have been issued a certificate of registration to do business in California. The tax [...]

Read the full article →

Nerd Enterprises – Quickbooks, Finance, & Excel Help for Businesses

by Matthew Burgess 09.16.2010

It can be hard for small businesses to find solid resources for services like bookkeeping, accounting, financial modeling, etc. Many of our clients ask us for referrals to firms or individuals that can provide these services. So we’ve built a network of professionals, done our best to learn about their practice, and then made referrals [...]

Read the full article →

Formation Solutions Featured in Santa Barbara Noozhawk

by Matthew Burgess 08.04.2010

Noozhawk.com in Santa Barbara has written a nice piece on our work at Formation Solutions, as well as a mention of a blog we started to highlight entrepreneurship in Santa Barbara. From the lead-in: In The Art of War, the general Sun Tzu observes that every battle is won or lost before it ever begins. [...]

Read the full article →

Needs: Freelance Graphic Designers / front-end web person (CSS)

by Matthew Burgess 07.24.2010

We are looking for an ecommerce-focused site designer who can create multiple alternative designs for elements of existing sites. Preferably with experience creating skins and page elements to test in multivariate conversion-focused environment. In other words, not one big re-branding exercise, but lots of tests to optimize for conversion. For use with a multivariate testing [...]

Read the full article →

Long Processing Times at CA Secretary of State

by Matthew Burgess 06.30.2010

Just a heads up. If you’re hoping to get a new corporation started quickly, plan on waiting at least a month, unless you are ready to pay substantial expediting fees. Due to budget cutbacks, the Secretary of State has closed or consolidated a number of functions and several regional offices. They’ve been forced to close [...]

Read the full article →

Costs of Incorporation Services: Are They Tax Deductible?

by Matthew Burgess 06.12.2010

Many of our clients ask if the cost of forming a new corporation or limited liability company is tax deductible. Here is the guidance excerpted From IRS Publication 535 (2008), Business Expenses: Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 [...]

Read the full article →

New Business Seminar – A Huge Success!

by Matthew Burgess 05.27.2010

Palius + O’Kelley, LLP teamed up with Formations Solutions to give a free seminar for those brave entrepreneurs who are courageous enough to start a business during the “Great Recession”, on Monday, May 17th. Speakers included Tony Vallejo and Monique Bunstone of Palius + O’Kelley, LLP, and Matthew Burgess of Formation Solutions. Share on Facebook

Read the full article →

Jim Bunch is not a Motivational Speaker

by Matthew Burgess 05.26.2010

Recently, at a conference in Cabo San Lucas, Mexico, I had the opportunity to see Jim Bunch, “The Ultimate Life Entrepreneur”, speak to a crowd of business professionals like myself. He introduced himself, and shortly thereafter played a clip of Chris Farley’s SNL skit where he is motivational speaker, Matt Foley, to illustrate that he’s [...]

Read the full article →

New Business Seminar in Santa Barbara

by Matthew Burgess 04.28.2010

Okay, maybe it’s not as fun as going to the dentist for a root canal, but  if you’ve just created a new company, there are quite a few details that are easy to overlook. Palius + O’Kelley CPA’s Tony Vallejo and Matthew Burgess and Michael Neville of Formation Solutions, Inc. will be co-hosting a free [...]

Read the full article →

Lonely at the Top: When Startup CEOs Can’t Discuss Problems Internally

by Matthew Burgess 04.14.2010

Joey Tamer talks about the loneliness of the CEO in a recent post on her blog. She discusses how to find the right consultant to work with on the questions and problems that you can’t take to others in your company. The Loneliness of the CEO & A Way to Find a Solution I’ve known [...]

Read the full article →

Authorized Shares and Issued Shares in a New Corporation

by Matthew Burgess 03.17.2010

Here are questions we hear frequently from our clients: When I form my corporation, what are “authorized shares,” and how many shares should my corporation authorize? How are authorized shares different from “issued” shares? How many shares should my new corporation issue? To help with the idea of how many shares are needed, here’s a [...]

Read the full article →

Misleading Termination Solicitations

by Matthew Burgess 01.06.2010

The California Secretary of State has issued another warning regarding misleading solicitations. The Secretary of State’s office has been advised that letters are being sent to California corporations directing them to submit $495 and a completed form to a private company named “Business Filings Division” in order to dissolve their business entity.  A similar letter [...]

Read the full article →

The Zamzow Group, Inc. – Client Spotlight

by Matthew Burgess 12.31.2009

Formation Solutions client Brenda Zamzow-Frazier is a hard working woman. As owner of the Zamzow Group, Inc., a financial and accounting consulting firm based in Los Angeles, Brenda has built a successful business with clients in the entertainment, non-profit, and manufacturing industries, among others.   Formation Solutions helped Brenda set up The Zamzow Group as [...]

Read the full article →