Every business has to file federal, state, and local taxes. To do this, you need to provide accurate information on your business taxes. Failure to pay or file business taxes properly could see you face hefty fines and possible jail time.
San Diego is one of the most tax-friendly cities in California. However, this tax-friendly nature attracts strictness from authorities who view the act of tax fraud and evasion as criminal activities. As a result, it is essential for business owners to understand the purpose of filing taxes and the consequences of non-compliance.
Why should businesses pay taxes?
The main goal of any government is to promote growth and development. To do so, the government requires a source of income other than the sale of government bonds. This is where taxation comes in, which is the largest source of income for every government across the world.
This sustainable source of financing is also important for the government of California as it enables the development of social programs and public investments. Such programs include equipping various institutions for better provision of health, infrastructural, education and general development services.
Additionally, your business should file its taxes as it is a legal requirement. Failing to comply in San Diego will subject your business to strict scrutiny and possible sanctions from law enforcement authorities.
The tax system and penalties
The San Diego tax system is under the California tax law, which is friendly but also very strict. This means that you could face a jail time of up to 10 years. Additionally, you can be fined up to $5,000 for each individual business failure to file taxes. This makes it hard for small businesses to stay afloat and keep their doors open, especially if they lack the services of San Diego CPA.
California tax authorities may also order you to pay past taxes. In such a case, your property may be seized until you comply with the tax requirements. Failure to pay the taxes over a stipulated amount of time will result in the closure of your business and permanent loss of property.
In addition, the state keeps a list of the top tax defaulters across California, including San Diego, which is accessible to the public via a searchable database.
