Am I Going to Be Hit With an Estimated Tax Payments Penalty?

For many people, income tax withholding is something that happens automatically: you indicate your tax withholding rate to your employer on a W-4 form for federal taxes and a DE 4 form for California, and the taxes are taken out before you even see your paycheck. If your employer withholds at the correct rate, chance are you’ll end up with a nice refund at tax time.
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Sales Tax Audit Statute of Limitations: Is Time on Your Side?

A sales tax audit is a sobering ordeal, but it is one that many (if not most) California businesses will face eventually. If you are selected for an audit by the California Board of Equalization (BOE), you will have to prepare a wide range of documents and records for your auditor to review, but how far back will the BOE want to look, and what are your rights? Today we will take a look at the ...
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Employee Payroll Taxes: How the EDD Handles Misclassified Workers

Managing employee payroll taxes can get quite complicated, with a number of areas being particularly opaque. One of those is the question of employee classification; is a person properly classified as a worker or an independent contractor? Misclassifying workers as independent contractors carries with it some significant consequences, including penalties and even potential fraud prosecution,...
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Installment Agreements and the IRS: Settling Your Debt

In an ideal world, everyone would be able to pay their taxes in full and on time, but sometimes it just isn’t possible. If difficult circumstances mean that you are coming up short this tax season, it is probably the source of a lot of stress and anxiety. The instinct to avoid the issue may be strong, but it can cause your problems to multiply exponentially. Interest, penalties, and other...
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Trust Fund Recovery Penalty (TFRP): How the IRS Addresses Unpaid Payroll Taxes

Are you personally responsible for your corporation’s unpaid payroll taxes? We have discussed payroll taxes on the blog before, covering the basics, but today we are delving a little deeper into a specific area of payroll tax compliance and consequences: the trust fund recovery penalty, or TFRP. Also sometimes referred to as the “responsible person penalty,” this refers to a personal liability...
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An Introduction to Payroll Tax Fraud: EDD Investigations

Payroll tax fraud can occur either through deliberate criminal activity or simply because an employer or employee has provided inaccurate or incomplete information.  The Employment Development Department (EDD) takes payroll tax fraud extremely seriously, so it is imperative that you understand the ways in which fraud can occur and take the necessary steps to avoid committing fraud.
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Income Withholding Order: How to Process an EWOT

Being served with an income withholding order can be a disconcerting experience as an employer. These orders can come from a variety of sources, but they are all legally binding and require careful handling. Understanding how these orders work, what your obligations are regarding them, and how to comply with them is very important. Failing to do so can have severe consequences for you and your...
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Tax Evasion Penalties in California

Nobody likes paying tax.  However, it is one of your core obligations as a resident of California, and there are significant penalties for not doing so. It is worth knowing what constitutes tax evasion, as opposed to tax minimization, and what the penalties are for failing to pay the appropriate amount of tax.
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California Payroll Taxes: Everything You Need to Know

The true cost of employees goes far beyond wages. Every new hire comes with tax obligations, and having a strong grasp on payroll taxes is something fundamental to your peace of mind as a business owner and employer. Whether you are a household employer or taking care of a huge team, you need to understand how to compute taxable income, what to withhold, what to contribute, and how to file. ...
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Penalty Abatement: Eliminating FTB Tax Interest

If you have an outstanding tax liability owed to the California Franchise Tax Board (FTB) past the due date, your tax bill is at risk of growing much larger over time. By law, the Franchise Tax Board must charge interest on unpaid taxes. This interest is charged from the due date until the date it is paid, is adjusted twice a year, and compounds daily. On top of this interest, a delinquent...
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