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Business Formation & Tax Planning in Los Angeles (2026)
Short answer: In Los Angeles the work is split three ways: the Secretary of State files the entity, an attorney handles legal structure and operating agreements, and a tax professional chooses the tax classification and runs your numbers. All State Tax Resolution, a Los Angeles firm led by an Enrolled Agent (a tax professional licensed by the IRS), does the tax side, including LLC and S corporation setup.
Who helps with business formation and tax planning in Los Angeles
"Setting up a business" is really three jobs, each with a natural owner in Los Angeles.
Filing the entity — Who does it: California Secretary of State; What it covers: Accepts the LLC or corporation filing and the Statement of Information
Legal structure — Who does it: An attorney; What it covers: Operating agreements, ownership terms, whether your profession may use an LLC
Tax classification and planning — Who does it: A tax professional, such as an Enrolled Agent or CPA; What it covers: Tax treatment, the S election, payroll, estimated taxes
A simple one-owner business may not need an entity at all.
Your options in Los Angeles
The realistic routes, free ones first:
The agencies themselves. The Secretary of State, IRS, Franchise Tax Board (FTB), Employment Development Department (EDD), California Department of Tax and Fee Administration (CDTFA) and City of Los Angeles Office of Finance each take their own registrations. The FTB has a Los Angeles field office (300 South Spring Street, Suite 5704; appointments at 213-897-5196), and Los Angeles County's Department of Consumer and Business Affairs publishes free tax help resources for residents. Agencies explain their own rules; comparing structures for your numbers is a different job.
Free help for individuals and disputes. IRS Taxpayer Assistance Centers answer account questions by appointment at 844-545-5640 but do not negotiate for you. VITA and TCE sites prepare returns for eligible taxpayers, Low Income Taxpayer Clinics (listed in IRS Publication 4134) offer free or low-cost representation under an income limit, and the Taxpayer Advocate Service, (213) 576-3140, helps when normal IRS channels have failed. None plans a new entity.
An attorney. The right person for operating agreements, co-owner or investor terms and legal liability, and the one you need for litigation or criminal exposure.
A CPA or another Enrolled Agent. Either can advise on tax classification, file returns and plan the year.
How the four structures compare for a Los Angeles owner
Sole proprietorship — Federal tax treatment: Self-employment tax: 15.3% up to the Social Security wage base ($184,500 in 2026), 2.9% Medicare above it; California cost: No entity tax; Payroll needed?: No; only if you hire; Tends to fit: One owner, little liability exposure
LLC — Federal tax treatment: Liability protection; taxed like the owner unless it elects otherwise; California cost: $800 annual tax, Form 568, plus an LLC fee from $250,000 of California income; Payroll needed?: No, unless it elects S treatment; Tends to fit: Liability protection with owner-level taxes; some licensed professions must form a professional corporation instead
S corporation — Federal tax treatment: Owner takes a reasonable wage through payroll; remaining profit avoids Social Security and Medicare tax; California cost: 1.5% of net income, Form 100S; $800 minimum from year two; Payroll needed?: Yes, before distributions; Tends to fit: Profitable owner-operators
C corporation — Federal tax treatment: 21% federal rate, then tax again on dividends; California cost: 8.84% rate; $800 minimum from year two; Payroll needed?: Yes, for owners paid for work; Tends to fit: Specific cases; run the numbers first
California's $800 LLC tax is due by the 15th day of the 4th month of the tax year (April 15 for a calendar-year LLC), profit or not. The first-year waiver mentioned in older articles applied only to LLCs formed in 2021 through 2023 and has expired. The added LLC fee is $900 from $250,000 of California income, $2,500 from $500,000, $6,000 from $1,000,000 and $11,790 from $5,000,000, estimated by the 15th day of the 6th month on form FTB 3536.
The registrations a new Los Angeles business needs, in order
Form the entity with the Secretary of State. A sole proprietor skips this.
Get an EIN from the IRS. Employers need one.
File the Statement of Information. LLCs file within 90 days of formation, then every two years.
Know your FTB dates. An LLC pays the $800 tax and files Form 568. An S corporation files Form 100S by March 15 and owes the $800 minimum from its second taxable year.
Register with the EDD (1-888-745-3886) if you will have employees, within 15 days of paying more than $100 in wages in a calendar quarter.
Get the City of Los Angeles Business Tax Registration Certificate from the Office of Finance and renew it by the last day of February every year, even with no revenue. West Hollywood has its own city certificate.
Get a CDTFA seller's permit (1-800-400-7115) if you sell goods.
The S corporation election and late relief
An LLC or corporation elects S status on Form 2553, due within 2 months and 15 days of the start of the tax year the election should take effect. Miss it and the entity is taxed as a C corporation, or passes its profit through to the owners with full self-employment tax exposure.
Rev. Proc. 2013-30 offers late relief within 3 years and 75 days of the intended effective date, if the entity shows reasonable cause, the late filing was the only reason it failed to qualify, and the entity and every shareholder reported consistently as an S corporation (K-1s and payroll for the owner). After that, the only route is a private letter ruling, with a $14,500 IRS user fee in 2026. Our guide to late S corporation election relief has the steps.
The election carries a payroll duty: the IRS says an S corporation must pay its shareholder-employee reasonable compensation before non-wage distributions. That matters for the loan-out corporations used by actors, writers, directors and crew in Los Angeles: a loan-out that skipped payroll invites examination.
What proactive tax planning means through the year
Proactive planning means making decisions before year-end instead of discovering them when the return is prepared.
January to March. The last federal estimate for the prior year is due January 15. Form 100S is due March 15, with an automatic six-month extension to file, not to pay.
April 15, June 15, September 15. The other federal estimate dates. California front-loads its installments at 30%, 40%, 0% and 30% of the annual amount.
June 15. First payment of California's pass-through entity elective tax (9.3% of qualified net income, tax years 2026 through 2030): the greater of $1,000 or 50% of the prior year's elective tax, paid with form FTB 3893 and claimed with FTB 3804 and 3804-CR.
Before December 31. Salary level, the pass-through election, retirement contributions (2026: $24,500 employee deferral, $72,000 overall), equipment timing, an accountable plan for reimbursements, and hiring family members properly.
Whether any of this saves money depends on your numbers, so be cautious of promised savings.
How to check whoever you hire
Credential. Ask whether they are an attorney, CPA or Enrolled Agent and what that lets them do. You can verify any Enrolled Agent's status with the IRS, through its public directory of credentialed preparers or its Office of Enrollment.
Fee. Ask for a flat fee in writing that lists what is included.
Who does the work. Ask who personally handles your file and prepares your returns afterward.
Promises. Walk away from any promised saving made before your numbers are seen.
What we do and how we work with Los Angeles clients
I'm Sabih Shafi, founder of All State Tax Resolution in Los Angeles, and an Enrolled Agent: licensed by the IRS under Treasury Circular 230 to represent taxpayers before the IRS in all 50 states. We form LLCs and S corporations, file S elections, set up payroll and plan the year's taxes. Our published prices are $750 for LLC formation and $1,250 for S corporation formation or election, with state filing fees separate; anything else is a flat fee quoted in writing. I am not an attorney, so operating agreements and legal advice stay with an attorney you choose.
We work by phone, video and a secure client portal, so you do not need to visit an office. Our mailing address is 1110 N Virgil Ave, Los Angeles, CA 90029 and our phone is (323) 900-0305. We serve Los Angeles, West Hollywood, Hollywood, Beverly Hills, Santa Monica, Culver City, Glendale, Burbank, Pasadena, the San Fernando Valley, Long Beach and the rest of Southern California remotely from our Los Angeles base.
Frequently Asked Questions
Who can help with business formation and tax planning in Los Angeles?
Three kinds of help split the work: the Secretary of State files the entity, an attorney handles operating agreements and legal structure, and a tax professional such as an Enrolled Agent or CPA handles tax classification, the S election and planning. You can hire an attorney and a tax professional together, or start with a tax professional if the structure is simple. Our firm covers the tax side remotely, including LLC and S corporation formation and the S election.
Where can I get entity structuring advice in California?
For the legal side, ask an attorney; for the tax side, ask an Enrolled Agent or CPA to run your numbers across sole proprietorship, LLC, S corporation and C corporation treatment. State agencies explain their own filings but do not choose a structure for you. Some licensed professions cannot use an LLC and form a professional corporation instead, so ask an attorney first if that applies to you.
Who offers proactive tax planning services in Los Angeles?
CPAs, Enrolled Agents and some tax firms offer it, and what matters is that the work happens before year-end instead of at return time. It covers the owner's salary level, the California pass-through entity election, retirement plan contributions, estimated payments and equipment timing. We do this work for Los Angeles owners by phone, video and portal, and the result depends on your numbers, so treat any promised saving with caution.
What does it cost to form an LLC or S corporation in Los Angeles?
Our published prices are $750 for LLC formation and $1,250 for S corporation formation or election, with state filing fees separate. After formation, California charges an LLC an $800 annual tax plus an added fee once California income reaches $250,000. An S corporation pays 1.5% of California net income, and the $800 minimum applies after its first taxable year.
What if I missed the deadline for my S corporation election?
You may still have time. Rev. Proc. 2013-30 allows a late-election request within 3 years and 75 days of the intended effective date, if you show reasonable cause, the late filing was the only reason you did not qualify, and you reported consistently as an S corporation. After that window the only route is a private letter ruling, which carries a $14,500 IRS user fee in 2026.
Last reviewed: October 2026 by Sabih Shafi, EA
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This article is general information, not individual tax advice. If you want to talk through your own IRS or state balance, book a free 15-minute review or call or text us directly.
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