Bookkeeping and tax services for contractors and trades in Long Beach and across Greater LA.

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How do I register my business in Los Angeles County?

There’s no single place you go to “register” a business in LA County. California, the county, and your specific city each have their own requirements. Here’s what you need to work through.

Start by choosing your business structure. If you’re forming an LLC or corporation, file with the California Secretary of State. The filing fee is $70 for an LLC and $100 for a corporation. Sole proprietorships skip this step but still need everything else below. Your entity choice has real tax implications, so it’s worth thinking through before you file anything. A tax strategy conversation early on can save you thousands down the road compared to just picking whatever your buddy set up.

Next, get an EIN from the IRS. It’s free and takes about five minutes on irs.gov. You’ll need it to open a business bank account, file tax returns, and hire employees.

If you’re operating under a name different from your legal name or LLC name, file a Fictitious Business Name (DBA) statement with the LA County Registrar-Recorder. The fee is around $26 plus $7 for each additional name. You’ll also need to publish the filing in an approved newspaper, which runs another $30 to $50.

Then get a business license from your city. This is where it gets confusing. LA County doesn’t issue one county-wide license. You register with the city where you operate. Long Beach, Torrance, Carson, and the City of LA each have their own licensing offices and fees. If you work across multiple cities, check whether each one requires a separate license. Many do.

Register with the California Franchise Tax Board as well. LLCs owe a minimum $800 annual franchise tax. If you’re hiring employees, register with the Employment Development Department for state payroll taxes, disability insurance, and unemployment insurance.

For contractors and tradespeople specifically, you’ll likely need a license from the Contractors State License Board for any project over $500. Some trades need additional city permits depending on the work. Don’t skip this step because unlicensed contracting carries serious penalties in California.

Once the paperwork is filed, the most important thing is keeping your books right from day one. Mixing personal and business transactions or skipping bookkeeping for the first year creates a mess that’s expensive to untangle later. If you’re a trade or service business in the LA area, working with a CPA who specializes in construction and trades makes the whole process smoother because the financial setup gets done correctly from the start rather than patched together after the fact.

Long Beach's CPA for Contractors and Trades

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More Questions

What are the payroll tax requirements in California?

California has four state payroll taxes administered by the EDD. Two are employer-paid (UI and ETT) and two are withheld from employee paychecks (SDI and PIT). These are on top of federal payroll obligations.

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How do contractors handle uneven or seasonal cash flow?

Build a cash reserve during busy months, collect deposits and progress payments on every job, and keep fixed costs low enough to survive the slow stretches. The contractors who manage this well aren't guessing. They have accurate books and a simple cash flow forecast that shows what's coming.

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What happens if I miss a quarterly tax payment?

The IRS charges an underpayment penalty that works like interest on what you should have paid. It's not catastrophic, but the longer you wait, the more it costs. Pay what you can as soon as you can to minimize the damage.

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How do I handle retainage on my invoices?

Show the full amount earned on each progress invoice, then subtract retainage as a separate line item. Track the withheld amount in a Retainage Receivable account so your books reflect both the revenue you've earned and the cash you haven't collected yet.

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When should I switch from sole proprietor to LLC?

Most trade and service business owners should consider forming an LLC once they have real liability exposure, steady income, or assets worth protecting. The tax benefits of an LLC with an S-corp election typically kick in when net profit exceeds $40,000 to $50,000 annually.

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What tax deductions are available for HVAC contractors?

HVAC contractors can deduct vehicle costs, tools and equipment, refrigerant and parts inventory, EPA certifications, insurance, and more. The key is tracking everything throughout the year so nothing gets missed at tax time.

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Long Beach CPA firm specializing in contractors, trades, and service businesses. Bookkeeping, tax preparation, IRS representation, and advisory services for businesses across the South Bay and Greater LA. Owned and operated by a CPA with over a decade of hands-on experience.

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