John Pham & Co. NPSYS Corporation 14541 BROOKHURST STREET, SUITE C1
WESTMINSTER, CA 92683 License #0649378
Tel. (714) 531-3637 * Fax (714) 531-3633
Email: johnpham@muabaohiem.com
When Are Taxes Due for an LLC?
Corporation
If you elect to treat the LLC as a corporation for tax purposes, you must file an annual IRS Form 1120 by the due date. The due date of the LLCs corporate tax return is the 15th day of the third month following the end of the tax year. You must choose to use either a fiscal or calendar tax year when you file the business's first income tax return. A calendar year requires you to report all income and expenses for the period of Jan. 1 through Dec. 31. A fiscal year is any consecutive 12-month period that ends on a date other than Dec. 31. For example, if the LLC begins operations on July 15 and you elect a calendar year for tax reporting, you can prepare a short-year return for the period of July 15 through Dec. 31 and file it by March 15 of the following year. In all successive tax years, the return is due on March 15 but will cover the tax period of Jan. 1 through Dec. 31.
Partnership
Limited liability companies that are subject to the partnership taxation rules must conform the tax year to the accounting period that the members who own a majority interest in the LLC use. If a majority of the members do not use identical accounting periods, the LLC must use the period that principal partners use. A principal partner is a LLC member having a 5 percent or more interest in the profits or capital of the LLC. If neither rule applies, the LLC must use an accounting period that results in the least aggregate deferral of income to the members. The LLC must file IRS Form 1065 by the 15th day of the fourth month after the tax year ends. For example, if one of the rules requires the LLC to use a tax year of June 1 through May 31, you must file the 1065 and pay all taxes in full by Sept. 15 of each year.
Disregarded Entity
If you are the sole member of the LLC, the business entity is disregarded for tax purposes. Disregarding the LLC requires you to include all income and expenses of the business on a personal tax return. Therefore, the due date of the return is the same day the Form 1040 is due. All individuals must file the tax return and pay all taxes that relate to the LLC by April 15 each year.
Changing Tax Years
You can change the tax year of an LLC that you treat as a corporation or partnership for tax purposes by making an application with the IRS on Form 1128. However, individual taxpayers are ineligible to request the change.
2018 Federal & CA Tax Rates, Tax Tables, Personal Exemptions, and Standard Deductions
2018 Federal Tax Rates, Tax Tables, Personal Exemptions and Standard Deductions
IRS Tax Brackets & Deduction Amounts for Tax Year 2018
This article gives you the tax rates and related numbers that you will need to prepare your 2017 income tax return. In general, 2017 individual tax returns are due by April 17, 2018.
2018 Income Tax Brackets
The Federal income tax has 7 brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The amount of tax you owe depends on your income level and filing status.
It's important to understand that moving into a higher tax bracket does not mean that all of your income will be taxed at a higher rate. Instead, only the money that you earn within a particular bracket is subject to that particular tax rate.
Single
Taxable Income
Tax Rate
$0-$9,525
10%
$9,526-$38,700
$952.50 plus 12% of the amount over $9,525
$38,701-$82,500
$4,453.50 plus 22% of the amount over $38,700
$82,501-$157,500
$14,089.50 plus 24% of the amount over $82,500
$157,501-$ 200,000
$32,089.50 plus 32% of the amount over $157,500
$200,001-$500,000
$45,689.50 plus 35% of the amount over
$200,000
$500,001 or more
$150,689.50 plus 37% of the amount over
$500,000
Married Filing Jointly or Qualifying Widow(er)
Taxable Income
Tax Rate
$0-$19,050
10%
$19,501-$77,400
$1,905 plus 12% of the amount over $19,050
$77,401-$165,000
$8,907 plus 22% of the amount over $77,400
$165,001-$315,000
$28,179 plus 24% of the amount over $165,000
$315,001-$400,000
$64,179 plus 32% of the amount over $315,000
$400,001-$600,000
$91,379 plus 35% of the amount over $400,000
$600,001 or more
$161,379 plus 37% of the amount over $600,000
Married Filing Separately
Taxable Income
Tax Rate
$0-$9,525
10%
$9,526-$38,700
$952.50 plus 12% of the amount over $9,525
$38,701-$82,500
$4,453.50 plus 22% of the amount over $38,700
$82,501-$157,500
$14,089.50 plus 24% of the amount over $82,500
$157,501-$200,000
$32,089.50 plus 32% of the amount over
$157,500
$200,001-$300,000
$45,689.50 plus 35% of the amount over
$200,000
$300,001 or more
$80,689.50 plus 37% of the amount over
$300,000
Head of Household
Taxable Income
Tax Rate
$0-$13,600
10%
$13,601-$51,800
$1,360 plus 12% of the amount over $13,600
$51,801-$82,500
$5,944 plus 22% of the amount over $51,800
$82,501-$157,500
$12,698 plus 24% of the amount over $82,500
$157,501-$200,000
$30,698 plus 32% of the amount over $157,500
$200,001-$500,000
$44,298 plus 35% of the amount over $200,000
$500,001 or more
$149,298 plus 37% of the amount over $500,000
2017 Personal Exemption Amounts
For tax year 2017, the personal exemption amount is $4,050.
You are allowed to claim one personal exemption for yourself and one for your spouse (if married). However, if somebody else can list you as a dependent on their tax return, you are not permitted to claim a personal exemption for yourself.
The personal exemption amount "phases out" for taxpayers with higher incomes. The Personal Exemption Phaseout (PEP) thresholds are as follows:
Filing Status
PEP Threshold Starts
PEP Threshold Ends
Single
$261,500
$384,000
Married Filing Jointly
$313,800
$436,300
Married Filing Separately
$156,900
$218,150
Head of Household
$287,650
$410,150
2018 Standard Deduction Amounts
There are two main types of tax deductions: the standard deduction and itemized deductions. You can claim one type of deduction on your tax return, but not both.
For example, if you claim the standard deduction, you cannot itemize deductions - and vice versa (if you itemize deductions, you cannot claim the standard deduction). You are allowed to use whichever type of deduction results in the lowest tax.
The standard deduction is subtracted from your Adjusted Gross Income (AGI), thereby reducing your taxable income. For tax year 2018, the standard deduction amounts are as follows:
Filing Status
Standard Deduction
Single
$12,000
Married Filing Jointly
$24,000
Married Filing Separately
$12,000
Head of Household
$18,000
Qualifying Widow(er)
$24,000
2017 California Tax Rates, Tax Tables, Personal Exemptions and Standard Deductions
Rate of inflation
The rate of inflation in California, for the period from July 1, 2016, through June 30, 2017, was 2.6%. The 2017 personal income tax brackets are indexed by this amount.
Corporate tax rates
Entity Type
Tax Rate
Corporations other than banks and financials
8.84%
Banks and financials
10.84%
Alternative Minimum Tax (AMT) rate
6.65%
S corporation rate
1.5%
S corporation bank and financial rate
3.5%
Individual tax rates
●
The maximum rate for individuals is 12.3%
●
The AMT rate for individuals is 7%
●
The Mental Health Services Tax Rate is 1% for taxable income in excess of $1,000,000.
Exemption credits
Filing Status/Qualification
Exemption Amount
Married/Registered Domestic Partner (RDP) filing jointly or qualifying widow(er)
$228
Single, married/RDP filing separately, or head of household
$114
Dependent
$353
Blind
$114
Age 65 or older
$114
Phaseout of exemption credits
Higher-income taxpayers' exemption credits are reduced as follows:
Filing Status
Reduce Each Credit By:
For Each:
Federal AGI Exceeds:
Single
$6
$2,500
$187,203
Married/RDP filing separately
$6
$1,250
$187,203
Head of household
$6
$2,500
$280,808
Married/RDP filing jointly
$12
$2,500
$374,411
Qualifying widow(er)
$12
$2,500
$374,411
When applying the phaseout amount, apply the $6/$12 amount to each exemption credit, but do not reduce the credit below zero. If a personal exemption credit is less than the phaseout amount, do not apply the excess against a dependent exemption credit.
Standard deductions
The standard deduction amounts for:
Filing Status
Deduction Amount
Single or married/RDP filing separately
$4,236
Married/RDP filing jointly, head of household, or qualifying widow(er)
$8,472
The minimum standard deduction for dependents
$1,050
Reduction in itemized deductions
Itemized deductions must be reduced by the lesser of 6% of the excess of the taxpayer's federal AGI over the threshold amount or 80% of the amount of itemized deductions otherwise allowed for the taxable year.
Filing Status
AGI Threshold
Single or married/RDP filing separately
$187,203
Head of household
$280,808
Married/RDP filing jointly or qualifying widow(er)
$374,411
Earned Income Tax Credit
The California earned income tax credit is available to California households with federal adjusted gross income (AGI) of:
●
Less than $15,009 if there are no qualifying children.
●
Less than $22,323 if there is one qualifying child.
●
Less than $22,310 if there are two qualifying children.
●
Less than $22,303 if there are three qualifying children.
The maximum amount of investment income to remain eligible for the credit is $3,561.
Nonrefundable Renter's credit
This nonrefundable, non-carryover credit for renters is available for:
●
Single or married/RDP filing separately with a California AGI of $40,078 or less.
●
The credit is $60.
●
Married/RDP filing jointly, head of household, or qualifying widow(er) with a California AGI of $80,156 or less.
●
The credit is $120.
Miscellaneous credits
●
Qualified senior head of household credit
●
2% of California taxable income
●
Maximum California AGI
of $73,226
●
Maximum credit
of $1,380
●
Joint custody head of household credit/dependent parent credit
●
30% of net tax
●
Maximum credit
of $451
AMT exemption
Filing Status
Amount
Married/RDP filing jointly or qualifying widow(er)
$91,793
Single or head of household
$68,846
Married/RDP filing separately, estates, or trusts
$45,895
AMT exemption phaseout
Filing Status
Amount
Married/RDP filing jointly or qualifying widow(er)
$344,225
Single or head of household
$258,168
Married/RDP filing separately, estates, or trusts
$172,110
FTB cost recovery fees
Fee Type
Fee
Bank and corporation filing enforcement fee
$100
Bank and corporation collection fee
$365
Personal income tax filing enforcement fee
$81
Personal income tax collection fee
$266
The personal income tax fees apply to individuals and partnerships, as well as limited liability companies that are classified as partnerships. The bank and corporation fees apply to banks and corporations, as well as limited liability companies that are classified as corporations. Interest does not accrue on these cost recovery fees.
2017 California Tax Rate Schedules
Schedule X - Single or married/RDP filing separately
IF THE TAXABLE INCOME IS
Over
But Not Over
Tax Is
Of Amount Over
$0
$8,223
$0.00
plus 1.00%
$0
$8,223
$19,495
$82.23
plus 2.00%
$8,223
$19,495
$30,769
$307.67
plus 4.00%
$19,495
$30,769
$41,629
$758.63
plus 6.00%
$30,769
$42,711
$53,980
$1,475.15
plus 8.00%
$42,711
$53,980
$275,738
$2,376.67
plus 9.30%
$53,980
$275,738
$330,884
$23,000.16
plus 10.30%
$275,738
$330,884
$551,473
$28,680.20
plus 11.30%
$330,884
$551,473
AND OVER
$53,606.76
plus 12.30%
$551,473
Schedule Y - Married/RDP filing jointly, or qualifying widow(er) with dependent child
IF THE TAXABLE INCOME IS
Over
But Not Over
Tax Is
Of Amount Over
$0
$16,446
$0.00
plus 1.00%
$0
$16,446
$38,990
$164.46
plus 2.00%
$16,446
38,990
$61,538
$615.34
plus 4.00%
$38,990
$61,538
$85,422
$1,517.26
plus 6.00%
$61,538
$85,422
$107,960
$2,950.30
plus 8.00%
$85,422
$107,960
$551,476
$4,753.34
plus 9.30%
$107,960
$551,476
$661,768
$46,000.33
plus 10.30%
$551,476
$661,768
$1,102,946
$57,360.41
plus 11.30%
$661,768
$1,102,946
AND OVER
$107,213.52
plus 12.30%
$1,102,946
Schedule Z - Head of household
IF THE TAXABLE INCOME IS
Over
But Not Over
Tax Is
Of Amount Over
$0
$16,457
$0.00
plus 1.00%
$0
$16,457
$38,991
$160.40
plus 2.00%
$16,457
$38,991
$50,264
$599.66
plus 4.00%
$38,991
$50,264
$62,206
$1,039.14
plus 6.00%
$50,264
$62,206
$73,477
$1,737.54
plus 8.00%
$62,206
$73,477
$375,002
$2,616.34
plus 9.30%
$73,477
$375,002
$450,003
$29,947.55
plus 10.30%
$375,002
$450,003
$750,003
$37,476.85
plus 11.30%
$450,003
$750,003
AND OVER
$70,517.82
plus 12.30%
$750,003
Individual Filing Requirements
If your gross income or adjusted gross income is more than the amount shown in the chart below for your filing status, age, and number of dependents, then you have a filing requirement.
Filing Status
Age As Of December 31, 2017*
California Gross Income
California Adjusted Gross Income
Dependents
Dependents
0
1
2 Or More
0
1
2 Or More
Single or head of household
Under 65
$17,029
$28,796
$37,621
$13,623
$25,390
$34,215
65 or older
$22,729
$31,554
$38,614
$19,323
$28,148
$35,208
Married/RDP filing jointly or separately
Under 65 (both spouses/RDPs)
$34,060
$45,827
$54,652
$27,249
$39,016
$47,841
65 or older (one spouse)
$39,760
$48,585
$55,645
$32,949
$41,774
$48,834
65 or older (both spouses/RDPs)
$45,460
$54,285
$61,345
$38,649
$47,474
$54,534
Qualifying widow(er)
Under 65
N/A
$28,796
$37,621
N/A
$25,390
$34,215
65 or older
N/A
$31,554
$38,614
N/A
$28,148
$35,208
Dependent of another person (Any filing status)
Under 65
More than your standard deduction
65 or older
More than your standard deduction
If you turn 65 on January 1, 2018, you are considered to be age 65 at the end of 2017.
