No matter where you work or where you go, taxes are all the same, right? You still have to file and pay the IRS every year, and most tax preparers can do your state return regardless of where they have their business. So, why would you need a Los Angeles tax specialist?
The Entertainment Industry
Los Angeles is the center of the entertainment industry, and many people who work in the entertainment industry tend to work on a project-by-project basis, as opposed to staying at one company and being on the staff payroll. While most people consider this to be freelancing, in tax terms it means you are self-employed and you are responsible for keeping track of your income and your expenses, and you have to pay the self-employment tax.
Because there are so many self-employed workers in Southern California, a Los Angeles tax specialist will have the knowledge and experience to guide you through the ins and outs of filing your self-employment taxes. Your employer (or multiple employers) will report your income on a 1099-NEC, but you will have to keep track of your expenses so you can deduct them from your income to lower your tax bill. A Los Angeles-based tax preparer can guide you through which expenses can be deducted and will know how to report both your income and expenses on Schedule C of your tax return.
The Gig Economy
While pursuing that entertainment industry career, many people have to take on one or more side hustles to pay their rent, which makes Los Angeles a center for the gig economy as well. Many an Uber driver, delivery person, or freelance writer is an aspiring actor or screenwriter waiting for their big break, and the money from that gig work is reported to the IRS as self-employment income. The good news? That means you can deduct expenses from that income on Schedule C.
Incorporating: LLC vs S Corporation
Once you do get your big break and the money starts rolling in, if you’re still being paid on a freelance basis, there could be tax benefits to incorporating. But how do you know when it’s beneficial to incorporate or what kind of corporation you should form? A Los Angeles tax specialist has worked with countless local people who have had to make the same decision.
State and Local Taxes
Freelancing in Los Angeles can trigger certain local taxes, like the Los Angeles City Business Tax, and learning how and when to file that tax can be confusing. Working with a tax preparer who is already familiar with those local taxes can make your life a lot easier.
Moore & Paquette Tax Group can help you no matter where you live, but if you live in Los Angeles, our tax preparers have the knowledge and experience you need to file your taxes appropriately. Reach out to us today to make an appointment.
**Please note that tax law can change often, and the above should not be considered legal advice. Always consult with a tax preparer before completing a tax return.