{"id":1717,"date":"2015-05-20T06:18:32","date_gmt":"2015-05-20T06:18:32","guid":{"rendered":"http:\/\/evergreensmallbusiness.com\/?p=1717"},"modified":"2017-10-13T11:17:37","modified_gmt":"2017-10-13T18:17:37","slug":"california-payroll-tax-forms-prepared-in-five-minutes","status":"publish","type":"post","link":"https:\/\/evergreensmallbusiness.com\/california-payroll-tax-forms-prepared-in-five-minutes\/","title":{"rendered":"California Payroll Tax Forms Prepared in Five Minutes"},"content":{"rendered":"
\"Tax<\/a>
You can expedite preparation of California’s employer quarterly tax returns by simplifying.<\/figcaption><\/figure>\n

If you\u2019re preparing the California payroll tax forms for a single shareholder-employee corporation, you can make the process pretty easy.<\/p>\n

In fact, no kidding, you can make the process so<\/em> easy, you can do it yourself. In about five minutes time. Per year.<\/p>\n

Note:<\/strong> In addition to the state payroll tax forms, you would also need to prepare and file quarterly payroll tax returns with the IRS, as described here<\/a> and as mentioned in the write up entitled, \u201cFive Minute Payroll\u201d at the bottom of this post.<\/p>\n

Simple Example of One-Employee California Corporation<\/h2>\n

Don\u2019t believe me? Let\u2019s say you pay yourself $10,000 a quarter as a shareholder-employee in a one-employee situation.<\/p>\n

Further assume that you pay the standard California new employer unemployment insurance rate of 3.4% on the first $7,000 of wages an employee earns in a year and then the employer training tax equal to .1% on the first $7,000 of wages.<\/p>\n

This means, if you do the math, that the small corporation owes $238 in state unemployment insurance tax and $7 in employer training tax. Or $245 in total.<\/p>\n

Note:<\/strong> If you want to check your actual unemployment tax rate, you can use the following web page (click here<\/a>). All you need to do is enter your account number into the box provided.<\/p>\n

Preparing the California CA DE-9 Return for Quarter 1<\/h2>\n

If you withhold no state income taxes, you prepare the first quarter\u2019s quarterly return, which is known as a CA DE-9, as shown in Figure 1. Note that while in our example you report $10,000 of wages, you only pay the taxes on the first $7,000 of wages.<\/p>\n

\"Picture<\/a>
California payroll tax form DE-9 for $10,000 of wages<\/figcaption><\/figure>\n

Note:<\/strong> You can get an equivalent paper form from the state\u2019s website by googling on the term \u201cCalifornia CA DE 9 form\u201d. For the 2015 form, you can also just use this link<\/a>. You can also get a more legible PDF version of the form shown in Figure 1 by clicking here<\/a>.<\/p>\n

Remitting Taxes Due with a California Payroll Tax Form<\/h2>\n

If you do owe money\u2014in this example scenario I\u2019m saying you owe $245 of taxes\u2014you need to prepare and print a DE 88 voucher form (available here<\/a>) that indicates you owe this money. And then you send in the voucher form and your check to Employment Development Department, P.O. Box 826276, Sacramento, CA 94230-6272.<\/p>\n

Figure 2 shows an example completed DE-88 form:<\/p>\n

\"Picture<\/a>
California Payroll tax form voucher for remitting amount owed.<\/figcaption><\/figure>\n

Note:<\/strong> Sorry about the poor quality of the image of the payroll voucher. You cam get a more legible PDF of the voucher by clicking here<\/a>.<\/p>\n

Preparing the California CA DE-9 Return for Quarter 2<\/h2>\n

If you withhold no state income taxes, you prepare the second quarter\u2019s quarterly return as shown in Figure 3. And note that you pay no state unemployment or employer training taxes in the second quarter because you will have already paid the taxes on that first $7,000 of wages earned in quarter 1.<\/p>\n

\"Picture<\/a>
California payroll tax form showing wages not subject to payroll taxes<\/figcaption><\/figure>\n

Note:<\/strong> Again, sorry about the, er, poor image quality of the payroll tax form. You can grab a more legible PDF copy here<\/a>.<\/p>\n

State Income Taxes<\/h2>\n

The California quarterly forms shown here provide for no state income tax withholding. This omission means that the shareholder-employee will need to directly make quarterly estimated tax payments. Yikes! Is that even legal?<\/p>\n

Well, it is. But you will need to pay the taxes. And you should pay them over the year to avoid penalties and interest charges. You can do that using this form<\/a>. (By the way, if you have an S corporation, you may already be making quarterly estimated tax payments to the IRS and the State of California to pay taxes on the part of your business profit that isn\u2019t wages.)<\/p>\n

Slick Trick to Save Time<\/h2>\n

You want to know a trick for saving time when you use the approach outlined here for handling this employee payroll stuff? Do all four quarters at once.<\/p>\n

In other words, because the second, third and fourth quarters are nearly identical (only the quarter is different) do them at the same time.<\/p>\n

California State Disability Insurance<\/h2>\n

If you\u2019re eagled-eyed in your review of the example forms shown here, you may have noticed that the CA DE 9 form also calculates and shows any state disability insurance you owe. But a shareholder-employee of small corporations can opt out of this coverage if the shareholder is the sole employee and a corporate officer. You use this form<\/a>.<\/p>\n

And Now A Plug for Our Five Minute Payroll eBook (Cost $20)<\/h2>\n

People have regularly asked us to provide a cleaner, fuller ebook that goes into all the details of the approach to payroll described here. (We call this approach the “Five Minute Payroll” system.) In other words, people want more precise instructions, fully completed example IRS forms, and then also nearly complete IRS forms to which they can add their name, address and EIN. So that\u2019s what we’ve finally done with our $10 ebook, “Five Minute Payroll<\/em>.”<\/p>\n

\"mattrd39_04\"<\/a><\/p>\n

The “Five Minute Payroll<\/em>” ebook explains how to do simple cookie-cutter payroll for most one-employee S Corporations using base salary amounts of $10,000 a quarter or $16,000 a quarter. (These amounts should work for just about everyone.) The e-book includes sample and nearly complete IRS forms as mentioned which you can copy to get payroll tax returns done in a few minutes. And the e-book provides some common-sensed tips you can use to set a reasonable salary for yourself.<\/p>\n

Interested in\u00a0our $20 ebook? Use this button to download the 2017 version:<\/p>\n