QUESTION: Rod, what are the 2 things you hate the most about taxes?

Wow, only 2 choices?

Ok, here are my 2 least favorite things;

  1. OBAMACARE TAX FORMS (i.e. the 1095-A forms that you all forget to bring in every year even though I remind you 1000 times)
  2. THE CITY OF LOS ANGELES OFFICE OF FINANCE 

If you are any of the following, you need to read this;

  1. I receive or will start to receive 1099-MISC forms
  2. I am a Sole Prop, Self Employed, Independent Contractor, DBA
  3. I own an LLC (single member or multi-member partnership)
  4. I own an S CORP
  5. I own a C Corp
  6. I own a Partnership but am not an LLC
  7. I am paid in Cash! CASH BABY!
  8. I have a Schedule C on my tax returns

Did you say YES to any one of those? If YES, then read on.

If NOT, then you do not need to read this email blast.

If YES, then are you also any one of the following;

  1. Earning my income in the City of Los Angeles
  2. Earning my income in the City of West Hollywood
  3. Earning my income in the City of Beverly Hills
  4. Earning my income in the City of Santa Monica
  5. Earning my income in the City of San Diego
  6. Earning my income in the City of San Francisco
  7. Earning my income in a major metropolitan area in the US, or somewhere regional?

Then you probably have an obligation to register and report your income to the local deputy dicks.

This is sometimes referred to as a Business License, sometimes it is referred to as City Tax. What it should be called is a Shakedown.

I am only going to talk about the City of LA. The other cities all have their own rules and idiosyncrasies. You will need to do your own research or go on their websites to see what your obligations are. They are actually very easy to understand and execute, whereas the City of Los Angeles Office of Finance is…well…you’ll see.

If you work or earn money in the City of LA, and get a 1099 Misc or are an entity (such as LLC, S Corp, etc) then the City of LA Office of Finance wants you to do 2 things;

  1. Register with them
  2. Report your income of the previous year to them between Jan 1st and Feb 28th of the new year. So you need to report your gross 2019 income to them between Jan 1st and Feb 28th, 2020.

So, if you received your first 1099 MISC in 2019,or just opened a new LLC or S Corp, etc, you need to register with them ASAP, then report your gross 2019 earnings to them between Jan 1st and Feb 28th, 2020.

Once you are registered, you need to report your gross income annually, until your situation and/or location changes.

If your gross income is under $100k, they will not impose a tax.

If you are in the entertainment industry (actor, writer, director, crew), you can earn up to $300k without getting taxed.

If you miss the Feb 28 deadline, they will tax you anyway.

They will NOT tell you that you have a filing obligation

They will NOT remind you that the deadline is coming

They WILL wait 2-3 years, once you have amassed enough penalties and interest, and send you a bill overstating your income and overstating how much you owe them.

They want you to make a mistake. That’s where they make their money.

It is based on GROSS not NET.

You can register and report income to them in person, by phone, by mail or online

Go to finance.lacity.org

Do not wait until Feb 28th or you will be screwed, because;

  1. The Phone Lines are clogged
  2. There is a long line around the office
  3. The website crashes
  4. The Mail is slow and they make believe they never got your letter in time

Do NOT call me in a panic that you missed the deadline. I have given you fair warning, and I even send out 3-4 blasts a year reminding everybody about this. I also send a final reminder on Feb 15th.

Be aware that even if you do everything correctly, this office is run by idiots. Therefore, you may still get a bill from them, stating you never registered, (even though you did), or that you never reported your income (even though you did), or that you have a filing obligation (even though you don’t). They do this ALL THE TIME.

THEREFORE, please document everything and make sure you receive confirmations. This office does NOT care about doing the right thing. The Office of Discovery does not cross reference with the other offices that have updated information, they just send out notices that are not based on any facts. They don’t care about efficiency.

IF YOU HAVE ANY FURTHER QUESTIONS, PLEASE GO TO finance.lacity.org

Peace & love to you all!!!!

GDMT