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Author: anshul
S-Corp Reasonable Compensation: Avoiding FTB Audits
Introduction If you own an S-Corporation in California, the Franchise Tax Board (FTB) is watching how you pay yourself. In 2025, FTB and IRS audits are increasingly focused on reasonable compensation especially for founder-only businesses. Paying yourself too little (or nothing) can lead to back payroll taxes, penalties, and misclassification audits. This guide explains what […]
California Alternative LLC Structures: B-Corp & Social-Purpose Corp Taxes
Introduction In 2025, California offers more than traditional LLCs and C-Corps. Alternative legal structures like Benefit Corporations (B-Corps) and Social Purpose Corporations (SPCs) provide mission-driven businesses with the flexibility to pursue impact and profit. But what about taxes? This guide breaks down the Franchise Tax Board (FTB) treatment of B-Corps and SPCs in California, comparing […]
California Dynasty Trust? Timeline, Tax, and Legal Hurdles
Introduction A Dynasty Trust is a powerful estate-planning tool that can protect wealth for multiple generations often 100 years or more. But in California, unlike states like Nevada or South Dakota, dynasty trusts face legal limitations, high taxation, and regulatory complexity. In this 2025 guide, we’ll break down how dynasty trusts work, what’s allowed under […]
QSBS & California: 0% State Exclusion? Myth-Busting the Rules
Introduction Heard you can sell startup stock tax-free under Qualified Small Business Stock (QSBS) rules? That’s only partially true especially if you live in California. In 2025, many founders mistakenly believe the QSBS 0% exclusion applies at the federal and state level. But California repealed its state QSBS exclusion, and it’s time to separate fact […]
Payroll R&D Credit: Why the CA Program Is Capped
Introduction Startups across the U.S. leverage the federal payroll R&D credit to offset up to $500,000 in employer-side payroll taxes. But what about California? In 2025, California still does not allow R&D credits to offset payroll tax, and its overall research credit program is non-refundable and capped for corporations. This guide explains why CA R&D […]
California R&D Credit vs. Federal: Can Founders Double-Dip?
Introduction Founders often ask: “Can I claim the R&D credit at both federal and California levels?” In 2025, the answer is yes but with key differences in calculation, rules, and refundability. In this blog, we compare the California Research Credit with the Federal R&D Credit under IRC §41 and guide founders on how to maximize […]
QSBS & California: 0% State Exclusion? Myth-Busting the Rules
Introduction You may have heard that Qualified Small Business Stock (QSBS) offers a 0% tax rate, but in California, this is where myths and reality diverge sharply. In this 2025 guide, we’ll unpack whether California honors IRC §1202 exclusions, how state sourcing affects your gain, and what founders need to know about myth-busting QSBS treatment […]
Stock-Option Income: When Do CA Non-Residents Owe?
Introduction Non-residents often believe they’re off the hook for California taxes but stock options granted while living or working in California may still be sourced to the state even years later. In 2025, with increasing audits on equity-based income, this blog explains when non-residents are liable for California taxes on exercised or vested stock options. […]
83(b) Election When You Reside in California: PIT vs Franchise Tax (2025 Guide)
Introduction Filing an 83(b) election in 2025 can save you thousands in long-term capital gains but if you’re a California resident, it comes with a twist: you must consider both Personal Income Tax (PIT) and the Franchise Tax Board’s rules. This blog unpacks the intersection of IRC §83(b) with California PIT reporting, state-sourced equity income, […]
California 409A Valuation Discounts: State Tax Footnotes Investors Read
Introduction Your startup’s 409A valuation isn’t just about issuing stock options it’s a due diligence magnet for investors and auditors alike. But here’s the twist for 2025: California investors are combing through state tax footnotes, especially for valuation discounts. In this guide, we cover how 409A valuation discounts affect California state tax reporting and how […]