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Why Do I Owe State Taxes?

California is one of 43 states that collects state income taxes and currently has the highest state income tax rate in the U.S. at 13.3%. It comes in fourth for combined income and sales tax rates at 11.2%, behind New York, New Jersey, and Connecticut. We are here to explore the common reasons for higher state taxes in California and ways to ease the bite they take from your earnings and...
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What is the IRS Statute of Limitations for an Audit?

IRS audits operate under a statute of limitations, meaning the IRS is barred from auditing returns after a set period of time. The limitation period typically begins at a particular time in the process and may be extended according to particular circumstances. Why do these limitations exist and how do they apply to various audit situations?
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Explanation and Penalties of Sales Tax Fraud in California

Sales tax is added to almost every piece of merchandise sold in the State of California. It adds to the city, county, and state coffers to help pay for services everyone enjoys. Sales tax can also be a lure into illegal activity. Sometimes it is not intentional. A retailer makes an error that can be attributed to complexity of the tax code. This is merely negligence. Other times, it is very...
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All About California Self-Employment Tax

When you work for someone else, your employer takes care of tax withholdings for you.  When you work for yourself, you are responsible for the withholding and payment of these same taxes. In California, you are not just responsible for federal taxes; you are also required to pay state employment tax. Here is a rundown of the things you need to know to stay out of trouble with the IRS and the ...
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What Are the California Payroll Tax Penalties If I Don't Pay?

As an employer, you are obliged to file payroll tax returns and pay payroll taxes. While the obligation can feel burdensome, especially when times are tough and cash flow is slow, this is obligation that you must never delay.  Substantial penalties may accrue to any employer who doesn’t file correctly, leaving you in a far worse situation than before.
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The BOE and California Tax Liens

The consequences of falling behind on your taxes are difficult for anyone, but when we are talking about businesses, sales taxes, and California’s Board of Equalization (BOE), the results can be devastating. The BOE is particularly aggressive about investigating and pursuing unpaid sales taxes, and will often demand immediate payment of any liability, no matter what other types of financial...
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California Income Tax Brackets

In California, state income taxes are generally among the highest in the country, but the burden is spread among different segments of the population. The rate of California income tax is arranged on something of a sliding scale, separated by income tax brackets. Low earners pay a smaller percentage of tax on their wages, while people who earn more pay higher rates. Understanding which bracket...
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Tax Help for Seniors: How Taxes Change as You Get Older

Taxes may be certain, but they are not immune to change. As you age, your tax situation will alter. Understanding the myriad rules around senior deductions, eligibility for various credits and the ways in which pensions and investments are taxed can be daunting, but a little knowledge goes a long way to ensuring that your golden years are comfortable and financially secure.
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Who Can Get a California Sales Tax Exemption?

If you own a business which produces tangible goods, then you are obligated to pay sales tax to the Board of Equalization. There are, however, a number of exemptions to this rule, some of which apply to various types of goods and others which attach to certain buyers.  It is important to understand which types of business can get a partial or full sales tax exemption and the consequences for...
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How to Handle an EDD Lien: Notification, Contributions, and Penalties

As a business owner, you are responsible for paying payroll taxes and filing periodic reports in accordance with your obligations. If you do not do so, you risk having a lien recorded against your property by the EDD. The details of tax liens are confusing to many people, but it’s important to understand what a lien is, why they are issued, and what your options are to avoid or discharge the...
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