Taxation of LLCs

1. Go to http://www.irs.gov/formspubs/page/0,,id=12153,00.html to review the IRS tax treatment of LLCs. See also our link "As an LLC what forms do I use to file a return."

2. In some states, including California, annual state taxes are due just for the right to do business as a limited liability company or partnership. In California, every limited liability company is subject to the annual limited liability tax of $800. The tax must be paid for each taxable year until a Certificate of Cancellation is filed.

3. In some states there is an annual fee if gross receipts exceed a certain amount. In California, the fee begins at gross income of $250,000. In California, go to
http://www.ftb.ca.gov/; in other states go to the web site for your state tax collector. The fee is roughly .003 x gross income.

Franchise Tax Board fees:

Less than $250,000 .....................0
$250,000 to $499,999 .................$900
$500,000 to $999,999 .................$2,500
$1,000,000 to $4,999,999 ...........$6,000
Greater than $5,000,000 ............$11,790