Friday, February 27, 2009

Taxes and Films

The tax season is upon us. And as a producer, I am in charge of ensuring each film I have produced meets its tax requirements. This responsibility brings me so much joy -- okay, that's not true at all but it's a responsibility I take very seriously and which definitely adds a lot more grey hair to my head. 

Every film is normally set up as its own business, typically as a Limited Liability Company. I usually start an LLC for a film during pre-production. I am not quick to start new companies because they are costly ($800 per year minimum with a $20 Statement of Info fee every couple of years) in California and I really don't need anymore grey hair. 

I find $800 to be extremely high for companies that typically don't make much money. I asked my accountant why the fee was so high and she explained it to me like this: California considers it a privilege for us to do business in the state. Therefore, they feel we must pay for that privilege. And boy do we pay! Other states can be much less costly. Georgia only charges $30/year for the privilege of doing business in their state. I think we should be more like Georgia, don't you?

It's not uncommon for me to be managing 5 or more LLCs at one time. Each LLC requires a breakdown of expenses. I do this with my business partner Jade in Quickbooks. It's extremely tedious and contributes to more grey hair. We then do a marathon meeting with our accountant who does the taxes for all the businesses along with our personal taxes in one sitting. I am writing about this today because I just finished a few days of preparing everything for that appointment and just got back from that appointment now. Whew! Another year behind me. Here's to the future and no more taxes until next year!

No comments: