It’s that time of year again when the City of LA’s relic of a city tax system will jump up and bite you. The City of Los Angeles is one of a few cities that has decided 1) the gig economy needs to be taxed and 2) they don’t care if you’re profitable.
You have until February 28 to complete an online filing and revenue report. If you do not register, the City of LA will slap you with a $4,000 fine for even $100 of business or freelance revenue. Even if you did not get a 1099 or did a small job under $600, you still have to self-report.
If you live in the City of Los Angeles and did ANY freelancing last year, or you set up a business that’s run from a Los Angeles address, you need to do this IMMEDIATELY.
If you’ve filed before, use the Business Tax Renewal page. If it’s your first time, start here. You will need to know:
Your total gross revenue for 2018
How much you earned while physically in the City of LA
How much you earned NOT in the City of LA (including Burbank, West Hollywood, Santa Monica, and the 23 other independent cities inside of LA County).
How much you earned from “creative arts exemption” activities.
The good news is, as long as you file on time, every year, you get up to $100,000 in revenue tax-free. You may even qualify for a $300,000 revenue exemption if you work with or in the entertainment industry. The bad news is, the City of LA continues with its horrible gross receipts tax policies, meaning even if you weren’t profitable, you may still have to pay taxes.
If you’re so motivated, Mayor Garcetti has asked the City Council to change to a profit-based tax assessment. Find your council representative and their social media handles and tell them you’re willing to get that office in Glendale if you have to.