Need to File Business Tax Return in California? Here’s What to Do
Who Needs to File a Business Tax Return?
If you run a business – like a corporation, LLC, partnership, or even freelance work – you probably need to file a business tax return. The state’s Franchise Tax Board says you must file if you’re organized, doing business here, or registered with the Secretary of State.
- C corporations: Must file if they’re incorporated in the state, registered here, or earn income. They also owe at least an $800 franchise tax.
- S corporations: Must file business tax return in California when they’re set up or doing business and earn state-sourced income. They pay a 1.5% tax on income (minimum $800).
- LLCs: All LLCs formed or operating must file Form 568 and pay an $800 annual tax—even if they made no money. If they earn over $250,000, extra fees kick in.
- Partnerships & sole proprietors: Partnerships (other than LLCs taxed as partnerships) typically file too. Sole proprietors report business income via their personal return if they earn from California sources.
You’re considered “doing business” if you sell goods or services here, have lots of sales or payroll in the state, or are officially based here.
Important Forms You’ll Need to Gather
First, you’ll need the main tax return form for your business type – one of these:
- Form 100 – for regular C corporations
- Form 100S- for S corporations
- Form 565 – for partnerships
- Form 568 – for LLCs
If you have an LLC, you’ll also need Form 3522 to pay the $800 annually.
At‑a‑Glance Checklist
- Main return (Form 100, 100S, 565 or 568)
- Form 3522 (LLC annual tax voucher)
- Any schedules or worksheets (like K-1, depreciation, credits)
- Federal return or supporting schedules (often required with business e-file)
Once you have those in hand, you’re almost ready. If you’re e-filing, be sure all schedules & authorizations (such as Form 8453‑LLC or 8453‑P) are attached. This business tax return form helps you set up payments, extensions or report withheld taxes. With everything organized, you’ll be set to submit your business tax return.
How to File Business Taxes?
1. Choose how you file
You can file online using the FTB’s Business e-file system or paper forms. Online is faster and more accurate. California also lets you use its free CalFile system through MyFTB if you qualify.
2. Fill out the right forms
Pick the correct form – 100 for C-corps, 100S for S-corps, 565 for partnerships, or 568 for LLCs. Be sure to include any schedules, payment vouchers (like 3522) & your federal return or worksheets.
3. Meet your deadline
C-corps and LLCs (treated as corps) usually file by the 15th of the 4th month after the end of their tax year. S-corps, partnerships & LLPs file by the 15th of the 3rd month. The business income of sole proprietors is included with personal taxes due April 15.
4. Pay what you owe
If you e-file, you can pay online via Web Pay or electronic funds. Otherwise, mail a check with the forms. Don’t forget to send Form 3522 if you’re an LLC.
5. Send it in
For e-filing users, submit through your software. For paper filing, mail your forms to the FTB address listed in the form instructions.
Filing by mail might take up to three months to process, so filing online is the better choice. When everything’s in, you’ll get a confirmation or refund faster.
What Happens If You File Late?
If you fail to meet the business tax return deadline, the Franchise Tax Board will assess various penalties. To begin with, there is a late filing penalty of 5% of the liability per month (or part of a month) if you’re late, to a maximum of 25%. For S‑corps, partnerships & LLCs treated as partnerships, it’s $18 per partner or shareholder per month for up to a year.
If you don’t pay what you owe, there’s also a late-payment penalty – 5% upfront plus 0.5% per month (up to 40 months), adding up to another 25%. On top of that, interest accrues daily, starting from the original due date. And if you ignore a formal demand from the state, you could face an extra 25% “demand” penalty.
These fees can stack fast and cause cash flow headaches. If you have a solid reason – such as illness or a major disaster, you can ask for penalty relief. And if it’s your first time being late, sometimes offers a one‑time waiver, but you must pay everything first.
Final Words
When you file business tax return in California it might seem like a lot at first. But when you understand what’s needed & plan ahead, it gets much easier. The key is knowing your deadlines, having the right forms ready, and getting help when you need it.
At Business Taxes and More, we simplify and make it hassle-free. We assist you in filing accurately, saving taxes & staying away from audit risk. Whether you’re a small business owner or freelancer or have a growing company, we’re here to help you. Our team focuses on more than just filling out forms. We help you plan smart with strategies that reduce taxes, protect your money from inflation, and guard against future risks. Contact us and experience the difference.
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