Is the California LLC Tax ($800) both deductible on Federal and CA tax return as a business expense? If not on CA tax return, how do I remove it from CA state return?

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June 3, 2019
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TurboTax Home & Biz Mac

Best answer by Cindy0H

Yes, it is. It is a deduction on the federal return under Common Business Expenses...Taxes and Licenses. This deduction would be part of your Schedule C and would flow to the California return. You do not need to remove it.

Cindy0HAnswer

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taxpayer7

I thought it is deductible on federal, but must be removed from California because it is not considered deductible on the state level? which one is correct? <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2948388-is-the-california-llc-tax-800-and-or-llc-fee-900-deductible-on-personal-return-smllc-disregarded-if-so-does-the-deduction-apply-to-state-and-fed">https://ttlc.intuit.com/questions/2948388-is-the-california-llc-tax-800-and-or-llc-fee-900-deductible-on-personal-return-smllc-disregarded-if-so-does-the-deduction-apply-to-state-and-fed</a>

baceved0

my guess here yes but it depends on where the credit is applied

1. If the LLC is like single member LLC /pass through entity and all business deductions are captured on personal income tax forms, then yes you can list the tax/fee and it is a deduction.

2. If the company /llc is a multi-member partnership and where a federal form 1065 needed; then in this case business expenses are allocated to the members and their respective share. This is reported a K-1 income/loss form for each member. The loss for example $800 calif tax is passed on to the members. and they will get the tax benefit (deduction).

You can't claim it both places...This is my guess as to why it is not allowed in some cases