Best Tax Lawyers in Calabasas

About Tax Law in Calabasas, United States

Tax law in Calabasas, United States, falls under both federal and state jurisdictions, with specific local regulations that may affect residents and businesses. Tax regulations cover a wide array of financial activities including income, property transactions, estate planning, business profits, and more. The Internal Revenue Service (IRS) governs federal taxes while the California Franchise Tax Board (FTB) oversees state taxes. Calabasas, situated in Los Angeles County, also has specific local tax codes that need to be adhered to by its residents and businesses.

Why You May Need a Lawyer

Navigating the complexities of tax law can be overwhelming, and specialized legal advice may be necessary in various scenarios. Common situations where legal help is often sought include:

• Disputes with the IRS or FTB concerning tax returns, audits, or penalties.
• Estate planning to minimize tax liability for inheritance and gifts.
• Starting a new business and understanding the tax implications of different business structures.
• Dealing with back taxes and negotiating payment plans or settlements.
• Filing amended tax returns after discovering errors or omissions.
• Litigation or appeals if you are involved in tax-related court cases.

Local Laws Overview

Calabasas follows California state tax laws, which include several unique regulations distinct from federal law. Key aspects that are particularly relevant include:

• State Income Tax: California has a progressive income tax system with rates ranging from 1% to 13.3%.
• Property Tax: Governed by Proposition 13, which caps property tax rates and limits annual increases in assessed values to 2% unless there is a change in ownership.
• Sales Tax: The combined state and local sales tax rate in Calabasas typically amounts to 9.5%.
• Corporation Tax: Businesses in California are subject to a flat 8.84% tax on their net income, with specific regulations for S corporations and LLCs.
• Estate and Gift Tax: California does not have a state estate tax, but federal estate taxes still apply.

Frequently Asked Questions

What should I do if I receive an audit notice from the IRS?

If you receive an audit notice, it’s crucial to respond promptly and consult with a tax attorney or accountant to ensure all required documents and information are prepared correctly. An attorney can help protect your rights throughout the audit process.

How can I reduce my taxable income?

Reducing taxable income can involve methods like claiming deductions, credits, contributing to retirement accounts, and using tax-advantaged savings plans. A tax advisor can provide strategies tailored to your specific situation.

What are the consequences of not paying my taxes on time?

Failure to timely pay taxes can result in penalties, interest on the outstanding balance, wage garnishment, tax liens, and even criminal charges in severe cases. Immediate action is recommended to negotiate payment terms or dispute the tax liability.

How are capital gains taxed in California?

Capital gains in California are taxed as regular income at the state level. The rate depends on your overall income tax bracket.

Can I deduct state taxes from my federal tax return?

Yes, state income taxes can be deducted on your federal tax return if you itemize your deductions. However, there are specific limits and rules regarding these deductions.

Do business owners in Calabasas need to pay local business taxes?

Yes, business owners in Calabasas typically need to register for a business license and pay applicable local taxes and fees.

What kind of tax breaks are available for homeowners in Calabasas?

Homeowners may be eligible for deductions such as mortgage interest, property taxes, and home office expenses if applicable. Proposition 13 also provides property tax relief.

Can I handle tax disputes without a lawyer?

While it is possible to handle minor tax disputes without a lawyer, complex issues or large sums of money may require specialized legal assistance to ensure the best outcome.

What documentation should I keep for tax purposes?

It is advisable to retain all income documents, receipts, bank statements, investment records, and any other documentation related to deductions and credits for at least seven years.

How does the IRS Fresh Start Program work?

The IRS Fresh Start Program offers taxpayers options like installment agreements, offers in compromise, and penalty relief to help manage and pay off tax debt over time. Consult with a tax attorney to see if you qualify.

Additional Resources

For more assistance with tax issues, consider these resources:

• Internal Revenue Service (IRS): The federal agency responsible for tax collection and enforcement.
• California Franchise Tax Board (FTB): Handles personal income and corporate taxes within California.
• Calabasas Chamber of Commerce: Offers resources and support for local business owners.
• Volunteer Income Tax Assistance (VITA): Provides free tax help for qualifying individuals.

Next Steps

If you need legal assistance with tax matters in Calabasas, consider the following steps:

1. Consult with a certified tax attorney or accountant familiar with both federal and local tax laws.
2. Gather all pertinent financial documents and records before your consultation.
3. Discuss your specific issue and ensure you understand the legal advice provided.
4. Follow through on any recommended actions such as filing amended returns, making payments, or disputing liabilities.
5. Keep informed about changes in tax laws that may affect you or your business.

Seeking professional help can save you time, money, and stress in the long term by ensuring compliance and optimizing your tax position.