Why Do I Owe State Taxes This Year? (& Why so Much?) 2022 Guide

 

If you haven’t had to pay any state taxes for the past few years but now face a liability, you might be wondering, why do I owe state taxes this year? It’s a pretty common question that many taxpayers struggle to find the answer to.

You may not even be aware that you owe state taxes this year. It all depends on how your income has changed over the previous year and whether you still have any credits or deductions available to you that were used previously to reduce your taxes.

Read more

California Payroll Tax: SUI, ETT, SDI & PIT Employer Guide

The California payroll tax structure for an employer in this state is based on four distinct taxes, commonly referred to as the CA SUI, ETT, SDI, and PIT payroll taxes. There are different rates for each of these taxes and the calculation methods are different as well.

Read more

Learn How to Beat the IRS with the Tax Master Class

The first “Tax Master Class,” masterminded and hosted by Sam Brotman, took place on Thursday, April 29, 2021. Due to the current COVID-19 climate, the event was on Zoom, but for those who missed it, a recording will be made available.

Brotman’s message was aimed at business owners owing more than $100K in taxes. Although the IRS is systematic he warned that with its new influx of money and pressure from the U.S. Treasury to fill the widening $441 billion tax gap, it is far less likely to let the “big whales,“ slip through their nets .

With his many successful years of defending clients against the IRS and the state of California, Brotman decided to put on a seminar about alleviating tax debt, in a sense, performing a much needed, long-form, free public service announcement.
Using his interest in high-stakes poker as a stage, he conveyed that dealing with the IRS is not a game of luck or chance, it’s a game of skill. In this way, his “Tax Master Class,” offers learning the edge to beating the IRS at their own game.

Read more

Establishing Residency or Domicile in California Can Be Taxing

Robert Wood, tax expert and frequent contributor to Forbes.com, wrote that “many would-be former Californians have unrealistic expectations about establishing residency in a new state. They may have a hard time distancing themselves from California, and they may not plan on California tax authorities pursuing them.”

Read more

What’s the Difference Between Federal and State Business Taxes?

Every business pays a variety of taxes to the federal government and the state of California. The type of tax, the structure of the business, and the amount of money received or earned dictates the amount of the tax.

The following post outlines the various taxes collected by the state and federal governments, the tax rates, and how often the taxes must be paid. The information is provided by business structure since that is the main dividing point for finding tax information.

Read more

What Is a Trust Fund Recovery Penalty (TFRP): Your Ultimate Guide

If your company has been struggling with tax issues and the resulting penalties, the trust fund penalty (TFRP) can be a crushing blow with far-reaching consequences for your personal financial security and future.

But all is not lost…

Join us as we discuss common questions, such as “what is the trust fund recovery penalty?” and, “how do you avoid the trust fund recovery penalty?”

So, what is a trust fund recovery penalty?

Also sometimes referred to as the “responsible person penalty,” a trust fund recovery penalty is a personal liability that may occur if a company’s payroll taxes are not properly remitted to the Federal government.

Typical examples of employment taxes not remitted are Medicare and social security deductions from employees’ wages.

It forms part of the payroll tax audit, and is definitely not something you should ignore.

How much is the trust fund recovery penalty?

For uncollected tax, the trust fund recovery penalty calculation is the employee’s part of any withheld FICA taxes plus withheld income taxes, and will be the same amount as unpaid trust fund taxes. For collected taxes, trust fund recovery penalties are the unpaid amount of collected excise taxes.

Read more

What is Reasonable Compensation?

One of the recent hot topics with respect to the IRS audits has to do with auditing S corporations[1] (and those taxed like an S, such an LLC) for not paying their employee/owners “reasonable compensation. According to the IRS “S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee” (IRS.gov, “S Corporation Compensation and Medical Insurance Issues,” 8/31/2013).

Read more

Circular 230: An Overview

Circular 230[1] is a publication of the U.S. Treasury regulations that include the rules that govern the practice of licensed professionals before the Internal Revenue Service.[2] These rules apply to those qualified and licensed to prepare tax returns and provide legal advice to do certain things within the boundaries of the field, including this San Diego tax attorney. The rules both encourage and prohibit certain conduct. Penalties are assessed when an admitted member is found to be non-compliant. With this in mind, rules of Circular 230 apply to attorneys, certified public accountants, enrolled agents, enrolled actuaries, appraisers, and enrolled retirement plan agents.

Read more

Brotman Law Featured in Inc. Magazine - Fastest Growing Law Firm in California