Tax & Accounting
CST Tax Advisors
CST Tax Advisors provide international tax advice and tax compliance services for expats living in Los Angeles. Their offices are located in several strategic locations worldwide, delivering local knowledge with international expertise.
For expats moving to Los Angeles to live and work or establish a business they will provide the essential tax services to ensure your international tax matters are effectively managed.
Tax & Accounting for Expats in Los Angeles
Los Angeles is one of the most culturally diverse cities in the USA and is the commercial and financial centre of Southern California. As the second most populated city in the States, it attracts a large number of expats each year – all of whom are advised to seek tax advice to help them navigate the complex tax system in the United States.
Key Tax & Accounting tips you should know as an expat in Los Angeles
- As an expat in LA, you will need to find out your tax status first – meaning whether you qualify as a resident or non-resident. These categories have nothing to do with your visa and help you determine whether you need to file a tax return at the end of the financial year. A tax advisor can help you with this
- You will also need to pay social security tax. You and your employer pay 6.2% tax each as well as 1.45% for Medicare which adds up to 7.65% of your salary. These are automatically deducted and go towards any retirement benefits that you are entitled to from your time spent living in Los Angeles.
- You will get a social security number, which also serves as your tax identification number as an expat.
Tax & Accounting for expats establishing a business in Los Angeles
- California imposes three different types of taxes on businesses, namely a corporate tax, a franchise tax, and an alternative minimum tax.
- Corporate tax applies to corporations and LLCs that elect to treat themselves as corporations. The rate is 8.84% on taxable income from business activity in California. While they may not be subject to the State’s franchise tax, they do have to pay the states alternative minimum tax (AMT) of 6.65% on the net taxable income
- Franchise tax applies to S Corporations, LLCs, Limited Liability Partnerships (LLPs) and Limited Partnerships. Traditional or C corporations that do not earn positive net income are not subjected to corporate tax, but must pay franchise tax instead.
- For S corporations, the franchise tax is 1.5% of the corporation’s net income with a minimum tax amount of $ 800.00 per tax year
- For standard LLC’s, the franchise tax is a flat fee rather than a percentage of net income. The fee is paid on a graduating scale depending on the LLC’s net income.
- It is advisable that you either employ a local with tax expertise or outsource your accounting requirements to a reputable tax provider with experience of the local tax system.