Freelance Tax for Los Angeles Residents?

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  • Freelance Tax for Los Angeles Residents?

    City of Los Angeles levies $30,000 tax bill for $500 freelance assignment.(http://www.laweekly.com/news/did-you...30-000-6040715)

    http://finance.lacity.org/content/AB63ProgramFAQ.htm

    http://mograph.net/board/index.php?showtopic=19031

    Has anyone here been affected by this tax and its ambush-style penalties? It looks like the Guild has been involved, so I'm assuming members are aware, and have made arrangements.

    First-timers, freelancers in all kinds of media, and non-Guild writers may be looking at some heinous penalties. If you make a couple of grand in any given year, you could be on the hook for thirty grand if you don't get your paperwork in on time. Crazy.
    If you really like it you can have the rights
    It could make a million for you overnight

  • #2
    Re: Freelance Tax for Los Angeles Residents?

    Originally posted by odocoileus View Post
    City of Los Angeles levies $30,000 tax bill for $500 freelance assignment.(http://www.laweekly.com/news/did-you...30-000-6040715)

    http://finance.lacity.org/content/AB63ProgramFAQ.htm

    http://mograph.net/board/index.php?showtopic=19031

    Has anyone here been affected by this tax and its ambush-style penalties? It looks like the Guild has been involved, so I'm assuming members are aware, and have made arrangements.

    First-timers, freelancers in all kinds of media, and non-Guild writers may be looking at some heinous penalties. If you make a couple of grand in any given year, you could be on the hook for thirty grand if you don't get your paperwork in on time. Crazy.
    taxes for all independent contractors, writers or otherwise, can get tricky

    http://www.scpr.org/blogs/economy/20...ins-at-tax-ti/

    Comment


    • #3
      Re: Freelance Tax for Los Angeles Residents?

      I can tell you from personal experience that the system is a mess. Their letters are confusing and threatening, their calculations are wrong, and it's nearly impossible to get a person on the phone. Also, all correspondence must be done via mail which makes record keeping more challenging because if they don't get your forms (even if you have a tracking number that says they did), it's your problem.

      If you earn less than $100,000 (I think that's the limit) of 1099 writing income, then you can get the Creative Artist exemption. But you MUST apply during that tax year. Otherwise, you'll be paying interest and penalties on a tax you don't owe.

      Don't trust TurboTax or HR Block to take care of this for you. Go to LA's Office of Finance and follow the links to "online business registration."

      If you don't, you will HATE life.

      Comment


      • #4
        Re: Freelance Tax for Los Angeles Residents?

        Originally posted by Bunker View Post
        I can tell you from personal experience that the system is a mess. Their letters are confusing and threatening, their calculations are wrong, and it's nearly impossible to get a person on the phone. Also, all correspondence must be done via mail which makes record keeping more challenging because if they don't get your forms (even if you have a tracking number that says they did), it's your problem.

        If you earn less than $100,000 (I think that's the limit) of 1099 writing income, then you can get the Creative Artist exemption. But you MUST apply during that tax year. Otherwise, you'll be paying interest and penalties on a tax you don't owe.

        Don't trust TurboTax or HR Block to take care of this for you. Go to LA's Office of Finance and follow the links to "online business registration."

        If you don't, you will HATE life.
        Yikes!

        Good advice.
        If you really like it you can have the rights
        It could make a million for you overnight

        Comment


        • #5
          Re: Freelance Tax for Los Angeles Residents?

          Does this apply to writers whose permanent residence is outside LA?

          Late Night Writer

          Comment


          • #6
            Re: Freelance Tax for Los Angeles Residents?

            Originally posted by LateNightWriter View Post
            Does this apply to writers whose permanent residence is outside LA?

            Late Night Writer
            A lawyer and/or accountant with experience in this area could answer the question definitively.

            The FAQ on the city website might shed some light:

            http://finance.lacity.org/content/AB63ProgramFAQ.htm

            I live in Los Angeles but my business is located outside the city limits. What are my liabilities for City of Los Angeles Business Tax?

            As long as all business activity is conducted outside of the City of Los Angeles, there is no liability for the City of Los Angeles Business Tax.

            I conduct a business from my home. Am I required to register with the City?

            Yes, home-based businesses are subject to City Business Tax. In almost all cases, businesses located within the City of Los Angeles, whether at a commercial or residential location, require that a Business Tax Registration Certificate be obtained from the Office of Finance.
            If you really like it you can have the rights
            It could make a million for you overnight

            Comment


            • #7
              Re: Freelance Tax for Los Angeles Residents?

              Yup. I got clobbered by this over the summer for money that should've been paid to me as an employee, not a business.
              LA
              Check out my animated feature available on VOD:
              www.TheGridZom.com

              Comment


              • #8
                Re: Freelance Tax for Los Angeles Residents?

                That settles it. Augura and Thousand Oaks look nice

                Comment


                • #9
                  Re: Freelance Tax for Los Angeles Residents?

                  You say, "I wrote everything I was paid for in a coffee shop... In Beverly Hills. Prove I didn't"

                  Comment


                  • #10
                    Re: Freelance Tax for Los Angeles Residents?

                    Originally posted by Bunker View Post
                    If you earn less than $100,000 (I think that's the limit) of 1099 writing income, then you can get the Creative Artist exemption. But you MUST apply during that tax year. Otherwise, you'll be paying interest and penalties on a tax you don't owe.
                    The limit is $100,000 for business.

                    But for writers, the "creative artists exemption" is set at $300,000.

                    The first year I didn't know and I had to pay a small fee. Since then I've registered and it's been easy. First of the year they send me a postcard telling me I have to pay my freelance tax. I log onto the city website, plug in the info from the postcard, assure them that I made less than $300,000 from writing, and then click submit.

                    A pain to set up, but manageable once you're set.

                    Comment


                    • #11
                      Re: Freelance Tax for Los Angeles Residents?

                      Originally posted by Alfred Parker View Post
                      You say, "I wrote everything I was paid for in a coffee shop... In Beverly Hills. Prove I didn't"
                      Um, no. It's based on where you live.

                      Comment


                      • #12
                        Re: Freelance Tax for Los Angeles Residents?

                        Actually, it's based on where you live and where you work.
                        If you live in the City of Los Angeles, but freelance in Burbank and can prove that's where your 1099's come from, then you don't owe the City of L.A.
                        LA
                        Check out my animated feature available on VOD:
                        www.TheGridZom.com

                        Comment


                        • #13
                          Re: Freelance Tax for Los Angeles Residents?

                          Originally posted by EscapeFL View Post
                          Actually, it's based on where you live and where you work.
                          If you live in the City of Los Angeles, but freelance in Burbank and can prove that's where your 1099's come from, then you don't owe the City of L.A.
                          Yep.

                          Comment


                          • #14
                            Re: Freelance Tax for Los Angeles Residents?

                            Originally posted by EscapeFL View Post
                            Actually, it's based on where you live and where you work.
                            If you live in the City of Los Angeles, but freelance in Burbank and can prove that's where your 1099's come from, then you don't owe the City of L.A.
                            That makes sense to a point. But the suggestion that you "work" in a BH coffee shop doesn't mean you're working in BH, especially if the company is in LA or elsewhere. I mean, I do that all the time. I live in LA, work for a company that's based in NYC, and sometimes work at the Santa Monica library. But that doesn't mean I can get out of the freelance tax. Does it? I don't think it does.

                            Comment


                            • #15
                              Re: Freelance Tax for Los Angeles Residents?

                              Originally posted by docgonzo View Post
                              That makes sense to a point. But the suggestion that you "work" in a BH coffee shop doesn't mean you're working in BH, especially if the company is in LA or elsewhere. I mean, I do that all the time. I live in LA, work for a company that's based in NYC, and sometimes work at the Santa Monica library. But that doesn't mean I can get out of the freelance tax. Does it? I don't think it does.

                              The difference is that you're not getting paid by the BH coffee shop, or leaving your home to go to NYC. So, no. You do not get out of the tax that way.

                              If you work in Burbank, physically... Off your butt for a company... At their place of business in Burbank. They pay you as w9/1099, then that is not work performed in the City of Los Angeles. The freelance tax is a license to conduct business in the City of Los Angeles, and being paid money by the people/businesses of the City of Los Angeles.

                              It's ridiculous because a lot of people should be getting paid as W2 employees and are not only being cheated by the people/businesses paying them (because you have to pay your own payroll taxes), but they are now getting bent over the table by the city.

                              Whatever you do... File with the city... Do it! They will find you.
                              LA
                              Check out my animated feature available on VOD:
                              www.TheGridZom.com

                              Comment

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