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CITY of LA BUSINESS LICENSE.  DO IT NOW

You must get or renew your City of Los Angeles Business Tax License by the end of January

EVERY YEAR.   See the pretty map?  If you live in a community whose name is in black, Do it.  NOW.

Click here to sign up for FREE:

 

If you are a “creative earner”, choose the

Creative Activity Exemption if you think you will earn less than $300,000.

 

If you are a “civilian” choose the

Small Business Exemption if you will earn less than $100,000 this year.

 

Questions?  Call them: (844) 663-4411 They can be very nice.

Do it NOW.    If you don’t do it, I can't fix it.

AUTOMOTIVE:

Keep a damn mileage log. 

 

  • I need your TOTAL Miles

  • BUSINESS Miles - the miles you drove to pursue business

  • COMMUTING Miles - to your regular or side-hustle job 

  • One ROUND-TRIP to said regular or side hustle job

  • MEDICAL Miles - doctors, therapy, pharmacy

  • CHARITY Miles - thrift store, or to volunteer, but not worship

  • PERSONAL Miles - …seriously, not everything is for your art

 

If you are leasing your vehicle, then we will want to take the “business percentage of your actual expenses” which may include:

gas

lease payments

oil changes

insurance

car washes

repairs

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Anything that goes in or on your vehicle. So what does “business percentage of actual expenses“ mean?  I’ll give you an easy math example: Let’s say you drive 1000 miles in a year. 500 of those miles are to job interviews, classes to expand your knowledge or skill set, networking events, business meals, ya’ know; pursuit of "the biz". These are Business Miles. So in this easy math example, 50% of your driving is in pursuit of business. That means (in this easy math example) half of your lease payments, gas, oil changes, repairs, insurance, car washes, seat covers, etc. can be deductible. 

 

What if you own, or are making payments to own, your car?  You’re probably better off sticking with actual Business Miles unless it’s a year where you incurred major repair bills. Either way - Use a damn Mileage Log.  Click HERE to download mine.

REPETITIVE LAYERS OF REDUNDANCY ...or
AUDIT PROOFING YOUR TUCHAS

The IRS loves (needs, wants, requires...) multiple layers of proof when it comes to your deductions.  You'll want to have 4 things in your hot little hands, for every expense you put into my

Tax Packet Worksheets…

  • Receipts

  • Bank Card Statement

  • Calendar Entry

  • Mileage Log

 

Your bank card statement alone isn’t enough.  You could’ve bought $52 worth of toilet paper at Target.  But the actual receipt will show you bought a filling cabinet, which IS a business deduction.  Now you might not make a notation in your calendar about buying a filing cabinet at Target, but you should definitely include that in your MILEAGE LOG

 

For the all important business Lunch-Dinner-Drink-Coffee-PleaseHireMe-ThankYous, KEEP THE RECEIPT.  And write on top of the receipt the name of the person, who they are to you (agent, writing partner, tax preparer), AND what the purpose, or topic of conversation was.

 

You should also make an entry in your calendar (either hand written in book form, or electronic in your phone/computer), about this business lunch, and OF COURSE you have also noted this in your mileage log.  A mileage log can be an App or a paper book that lives in your vehicle.

 

Ahhhh, Beautiful Redundancy.

 

 

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“What’s a Mileage Log?” you ask.  Here is a link to download Jordana’s Mileage Log.  Sure, you can buy one from any office supply store, and yes, that’s a deduction in both cost AND mileage, but it isn’t quite the same as...  Jordana’s Mileage Log.

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EXTENSIONS:

  • An extension is only an extension of time to FILE.

  • It is NOT an extension of time to PAY.

  Click on these links:

  IRS EXTENSION 

  and

  CA FTB EXTENSION

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Or Google the department of revenue for your state, and type Extensions in the search box.

 

Send as much money as you typically owe, or 15% to the IRS and 4% to the State, of your 1099 or self-reported income from last year.  If you don’t send enough at least it will knock down your tax bill.  If you send too much, the excess will be refunded to you.

If you want me to file the extensions for you, I charge $40. 

And you should pay at least 90% of what you think you might owe with the extension

PENALTIES… aaand INTEREST:

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A late FILING penalty is charged if your return is filed after the due date - usually April 15th, or extension date - October 15th. The penalty is usually 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%. If your return is more than 60 days late, the minimum penalty is $135 or the balance of the tax due on your return, whichever is smaller.

 

In addition to the possible late filing penalty, you may have to deal with...

 

The late PAYMENT penalty it is usually ½ of 1% of any tax not paid by Tax Day (usually April 15th). It is charged for each month or part of a month the tax is late. 

The maximum penalty is 25%.

If you properly filed an extension, meaning you paid at least 90% of what you owe when filing the extension, then you will not be charged the late payment penalty. 

 

On top of the penalties you may owe, there will be interest…

The INTEREST rate being charged by the IRS is 3% per year. 

 

Google any states you owe taxes to for their Penalties and Interest rates.  

HOW LONG TO KEEP ALL THOSE FILES & RECEIPTS?

The short answer is:  drumroll please... 7 Years.

But when you do finally decide to shred the mountains of paper, ALWAYS keep the actual tax returns and your actual W-2s.  FOREVER.  Why? When you retire and file for Social Security if there’s a question about how much you get each month - you’ll need to show your actual tax returns and actual W-2s from your entire working life.  Period.

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FYI - buy a scanner so you can scan all of those receipts into a computer file, and the price of the scanner is a business deduction!!

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THE ABCs OF CONTACTING THE IRS

(A)  Here’s my secret phone hack to actually get through to somebody at the IRS:  Call 1-800-829-1040   When you hear them ask if you want English press 1, with each subsequent voice prompt, you continue with these codes:  2-1-3-2- Then you will hear the recording ask for your Social Security number, do NOT enter it. You’ll hear the recording a second time, again do NOT enter it, then with the next two voice prompts hit these numbers:  2-1, then hit 0 a few times until you hear the hold music.

 

 

If you call in the middle of the day you may just be told there are too many people in queue. Call right back.  Maybe a few times.  You still may be on hold for half an hour or so but if you can get through to the horrible hold music, you will eventually get to speak to a human being.

 

And the IRS is open from 7 am until 7 pm in every time zone.  Because almost nobody knows that, it’s easier to get through if you call before 9 am, or after 5 PM.  (In every U.S. time zone)

 

And of course the person who answers is going to sound exhausted and defeated and they’re going to grumble their name and badge number at lightning speed.  Write down their badge number and then in your most cheerful-happy-pleasant voice say something like “Wow you speak faster than I can write! Please tell me your name again I want to be able to address you properly…________ Thank you! Man-oh-man I really hope you can help me……“

 

As soon as they know you’re not going to swear at them, and blame them for everything from war to Covid, their tone and their energy will change 100%. 

 

(B)  If you still can’t get through after four or five attempts with my trick above, then click on this link:

https://www.irs.gov/help/contact-my-local-office-in-california

Scroll down a little bit and you’ll see a list of every local field office the IRS has in California. Start at the top and just keep calling until you can get a hold of a human being who can help.  Of course there will be a list like that for every state.  

 

(C)  In addition to calling with either of the formats above, I encourage everyone to set up their own IRS account. Go to

https://www.irs.gov/individuals/secure-access-how-to-register-for-certain-online-self-help-tools   And enter the information you need to set up an account.  This makes it so much easier to find answers to questions and information connected to letters you’ve received.  At some point in the process of setting up your account you will be told that they will now mail you a password. Yes it’s old-school snail-mail.  Once you get that password in the mail, log back in and finish setting up your account.

 

ONLY AFTER YOU’VE EXHAUSTED THE ABOVE WAYS TO CONTACT THE IRS, THEN AND ONLY THEN SHOULD YOU CALL THE TAXPAYER ADVOCATE SERVICE - - -  

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The Taxpayer Advocate Service helps individual and business taxpayers resolve problems with the IRS ensuring any taxpayer problems which are not resolved through normal IRS channels are promptly and impartially handled. 

 

• TAS is an independent organization within the IRS that protects taxpayers’ rights.  Our service is free and tailored to meet your needs.

 

• You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or if you believe an IRS procedure just isn't working as it should. 

 

• If you qualify for our help, we’ll do everything we can to get your problem resolved. You will be assigned to one advocate who will be with you at every turn.

• As a taxpayer, you have rights that the IRS must abide by in its dealings with you. visit www.TaxPayerAdvocate.IRS.gov for more information.

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CONTACTING THE CA FRANCHISE TAX BOARD

You can try an Online Chat

Here is the California Franchise Tax Board‘s main phone number:  1-800-852-5711

And here is the phone number specifically for collections:  1-800-338-0505
You might have better luck getting through if the phone prompts thinks you owe them, then when they answer, they can connect you to the right department.


Here’s the link to the Franchise Tax Board local offices.  If the "chat" and phone numbers above don't do the trick, try going down this list until you find someone to talk to:

https://www.ftb.ca.gov/help/contact/office-locations.html  Once you click on that link, scroll down a little bit until you see the list of local offices, start at the top and keep calling every number until you get through to a person.

 

 

The FTB TAXPAYERS’ RIGHTS ADVOCATE:

 

Click here for the

Franchise Tax Board Taxpayers' Rights Advocate

 

Our mission is to provide quality service to taxpayers and tax professionals through

Education and Outreach – We educate and engage taxpayers and tax professionals by - - 

  • Addressing changes in the law

  • The most common return filing errors

  • Providing useful and timely information about FTB

  • We solicit feedback from external stakeholders about FTB services, policies, and procedures to improve transparency and the quality of the services provided.

 

  • Case Advocacy – We assist individuals and businesses with problems ranging from customer service concerns to complex audit and filing issues not resolved through normal channels.

 

  • Systemic Advocacy – We work with external stake holders to identify, analyze, and resolve broad-based taxpayer problems, including issues that require a legislative solution.  We provide input to FTB on behalf of taxpayers and tax professionals.