As the 2017 tax deadline draws closer, many business owners will need to examine revenues, receipts and other documents from the previous year to ensure that their information is accurate and complete. Since California updates the tax codes on a regular basis, it’s possible that your business may be affected by a new rule. Before filing your return, remember the following.
File Your Paperwork Online
According to the State of California’s Employment Development Department, employers submitting payroll tax information and other documents must do so electronically. The Department’s Fourth Quarter Newsletter states, “Assembly Bill (AB) 1245 (Chapter 222, Statutes of 2015) requires all employers to electronically file their employment tax returns, reports, and payments to the Employment Development Department (EDD) beginning January 1, 2017.” As such, you may want to get acquainted with the submittal process before the deadline.
Seek Out And Apply For Credits
California has various tax credits available in many industries, and businesses are eligible to apply throughout the year. One such credit is the California Competes tax credit, which benefits businesses that operate in and stay in the state. The California Business Assistance Portal explains, “Tax credit agreements are negotiated by GO-Biz and approved by a statutorily created ‘California Competes Tax Credit Committee,’ consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.”
Keep Your Employees Informed
Some small business owners may have employees who qualify for the California Earned Income Tax Credit, along with the Federal EITC. If your company employs such workers, you are required to notify them. According to the California Legislature, a bill that was passed in November states, “This bill would require those same employers currently required to notify employees who may be eligible for the federal earned income tax credit to also notify these employees that they may be eligible for the California Earned Income Tax Credit under the same conditions.”
Stipulations To Healthcare Tax Credit
Employers who offer full health coverage to employees are still eligible for a tax credit, but only if the plan comes through Covered California. The Employment Development Department Fourth Quarter 2016 newsletter explains, “Enrollment in Covered California for Small Business is available year-round. It is also the only place where small businesses may qualify for a federal tax credit for offering health coverage.”
These and other rules may affect your tax returns this season. Before preparing your taxes, be sure to conduct a thorough review of your books and paperwork, and if you have any questions, speak with a tax professional.
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