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Los Angeles Tax Law Blog

CROS: Is your business struggling with the new tax filing system?

"That's a distinction without a difference." You likely have heard that phrase before. What it aims to point out is a fault in someone's logic. Typically, it is evoked when a speaker tries to propose that two things are different when no difference actually exists.

Such a rebuttal does not appear appropriate applied to California's new tax management system. In development since 2010 and finally launched in May, the system is touted by officials as one that simplifies business sales tax reporting, increasing revenue. What they appear to have not anticipated was that it is so different from what came before that filers are stymied by it

Will CA Supreme Court ruling make it harder to hire contractors?

A recent ruling from the California Supreme Court will have business owners across the state questioning whether they need to re-classify independent contractors as employees. The ruling could have serious ramifications for employers and employees connected to the state’s growing “gig economy” companies.

In a unanimous ruling, the court found that for a worker to be correctly classified as an independent contractor, businesses must prove that the worker meets all three of the following conditions:

Handling An EDD Audit

When most people hear the term “audit,” they think of the IRS. They also think of a confusing process that can take months or years. In California, business owners need to be aware that an audit by the state Employment Development Department (EDD) can also have costly results if not handled properly.

These audits typically look at whether a business is meeting its payroll tax obligations and providing the proper benefit coverage that employees are entitled to. Disputes usually arise over a company’s classification of some workers as independent contractors, who are not entitled to benefits.

Millennials and taxes: Avoid these three big mistakes

Taxes are complex. There is rarely a simple answer to a tax matter. However, one question often does have a simple answer: do I need to file taxes? Millennials are often struggle with this question. The wrong answer to this, and two other common errors, can cause serious problems.

One big problem to watch out for: becoming the subject of an audit by the Internal Revenue Service (IRS).

Answer this before using online, do-it-yourself tax software

Frugality is often beneficial, but there are certain situations when a good deal ends up costing a lot more than expected in the long run. This can be the case when using a low cost, do-it-yourself tax software program. These programs are not always bad, some tax filers find these systems helpful and may benefit. However, others could set themselves up for additional problems in the future.

So how do you know which category you fit into? Should you use the tax software or find another method of tax preparation services? Ask yourself these three questions to help find the answer:

Will the new tax law lead to more tax scams?

Tax filers beware: scammers are working hard this tax season. Their attempts generally increase this time of year, as tax payers are putting together their filings. However, it is likely that fraudsters will find even more success this year as confusion over the new tax law abounds throughout the country.

Tax payers can take steps to protect themselves from becoming a victim. One of the most important steps is to gather some basic knowledge about how the Internal Revenue Service (IRS) works. One tip that will help reduce your risk of becoming a victim: it is extremely unlikely that the IRS will call you. The agency is also unlikely to reach out through an email or via social media. Any attempts using these methods are likely a scam.

Payroll vs. employment tax: Is there a difference?

You may have heard the terms "payroll tax" and "employment tax" used interchangeably. Many people--even some tax professionals!--think that these terms are synonyms. Granted, the terms do have their similarities. After all, they both refer to the taxes owed by an employer.

But the Internal Revenue Service actually considers each term different, and they both have distinct definitions. If you are an employer who will have to pay these taxes, it is important to know the similarities and differences between the two. 

Three end-of-year tax savings tips you can implement now

While the 2017 election season pales in comparison to last year’s cycle, it is no less important for those who are in office on Capitol Hill and in state legislatures around the country. Senate Republicans may be feeling the pressure of producing at least one major piece of legislation before the year is out, and after the failure of health care reform, tax reform is a worthy goal.

According to several media sources, Senate Republicans will introduce their tax plan this week. It is rumored to be an ambitious agenda aimed at lowering corporate income taxes and easing the financial pain on middle class families.

Tax considerations for military members

Life in the military is not the same as the life of a civilian. Those in the military are often required to move for training and other obligations. The basics of their compensation can be different than those who work within the private sector. Due to these and other considerations, the tax filings of a military serviceman are often more complex than their civilian peers.

Military versus civilian: The difference in pay

Taxpayers beware: IRS and settled credit card debt

The Internal Revenue Service (IRS) rarely makes life easy. This is particularly true for those who are able to negotiate with a credit card company about an outstanding debt. In some cases, a successful negotiation can result in a dismissal of the debt. Although the consumer may no longer need to pay off the bill with the credit card company or other lender, his or her financial woes are far from over.

This is when the financial woes shift to matters involving the IRS. In the eyes of this federal agency, the deal noted above results in a gain for the consumer. The IRS views this as a financial benefit to the consumer and expects the consumer to list the benefit as income on his or her tax returns.

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