This guide is tailored for productized service LLCs in California for 2026. We'll cover federal and state tax obligations, deductions, and common mistakes. Given the complexities, consider using AI-powered formation and compliance tools like Lovie to automate these processes and minimize errors.
As a productized service LLC in California, your tax structure depends on elections. By default, you're a pass-through entity, meaning profits are taxed at the individual owner level. You can elect to be taxed as an S-Corp for potential self-employment tax savings, but this adds complexity. California also imposes an $800 annual franchise tax, regardless of profitability. Accurate record-keeping is crucial for managing income and expenses related to your fixed-price service offerings.
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