Welcome to Chips Money Tips. I’m Chip Chinery with a very special Hollywood money tip. The Man is at it again Maaaaaan. This is a very specific money tip for those of us who work in the Creative Arts in Los Angeles – especially if you do you work under your own corporation and/or you get paid by 1099 income.
You may have received a postcard from the city about the City of LA Biz tax. This year’s card was pink. Last year I got a yellow card. But that was for tripping the goalie.
The good news is that those in the “Creative Arts” don’t have to pay City of LA business tax on earnings under $300K. That’s because we’re special. We’re not like common people, like plumbers or people who nail boards together. We are artistes. Ergo, we get this special exemption every year. BUT, and this is a Kardianshian sized BUT – (fun with homonyms!) we don’t get that exemption unless we sign up for that exemption.
So if you are not registered and made money in 1099 income in the “Creative Arts” in the City of LA – you will owe City of LA Biz tax. And you will be penalized for not paying back years. I speak from first hand experience. But there are loopholes!
When I found out about this tax, I met with a supervisor and was told that I did not have to pay the tax if I worked 7 days or fewer in a given year – even though I had not registered those years. I was also only obligated to pay tax on 20% of income earned outside of the City of LA – which became 0% because I did not take a home office deduction on my taxes.
If you are watching this at ChipsMoneyTips, I will have links below this video that will take you to the City’s website where you can see those loopholes addressed in Section 18 & 19.
Do you have to register if you were paid via W2 instead of 1099? My accountant said no and the City of LA’s website says no. So unless you are a Corporate actor/writer/producer/director maaaaaaan, you should be fine. And that means you E. But the Jazzbo, and Pedro Blanco and Matt Lively… you guys should talk to your accountant s about this. I don’t want to tell you what to do. It’s not my business!
You must register with the City of LA by midnight on February 28th. You can do so at www.lacity.org/finance.
That is all I can advise you about this. If you have any further questions, I suggest you contact your accountant to see if this applies to you & to register by Feb 28th at midnight.
Here’s hoping we all exceed the $300K mark and happily get to pay LA City Business tax for years to come!