Step 7 - Withholding Taxes

10 Steps to Starting a Business

STAGE THREE – HIRING EMPLOYEES

Complying with Employer Requirements

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Step 7 – Withholding Taxes

As previously discussed, the moment a business hires even one employee, it is subjected to an overwhelming barrage of government regulations and requirements.  Stage Three of starting a business covers all the steps necessary (Steps 4 through 9) for complying with these employer requirements.  The previous newsletter discussed Step 6 – complying with the New Hire Reporting Act.  This newsletter continues the discussion of the 10 Steps to Starting a Business, moving on to Step 7 – Withholding Taxes.

7.  Withholding Taxes

Employers are not only required to pay taxes, they are also required to withhold taxes owed by their employees.  Both the Federal and State governments require employers to comply with various withholding requirements with respect to their employees’ wages.  Figuring out which withholding requirements apply and correctly calculating the amount of taxes to withhold from each employee’s wages can be agonizingly complicated, which is only further exacerbated by the fact these laws are constantly changing and employers are regularly subject to new withholding requirements.  For these reasons, the best (and safest) way of complying with these complex withholding requirements is by working with a CPA or other tax professional, or simply outsourcing this task to a payroll service provider.  A brief overview of the Federal and State withholding requirements is set forth below.

Federal Income Tax Withholding (Form W-4)

The Federal government requires employers to keep and maintain a signed withholding exemption certificate (Form W-4) for each employee, which is used for calculating the amount of Federal taxes to withhold from the employee’s wages.  Additionally, employers are required to report wages paid and taxes withheld for each employee by filing a Wage and Tax Statement (Form W-2) with the Social Security Administration.  To learn more about complying with the Federal tax withholding requirements, check out the IRS' Employer's Tax Guide, as well as the Social Security Administration's Employer W-2 Filing Instructions and Information.

State Taxes

Additionally, California also requires employers to comply with a number of State withholding laws – such as requiring employers to withhold from their employees’ wages payroll taxes, disability insurance taxes, and personal income taxes.  Similar to the W-4 Form used to calculate withholdings for Federal taxes, California employers must use Form DE-4 for withholding State income taxes.  To learn more about California’s withholding requirements, check out the EDD’s California Employer's Guide, as well as the California Tax Service Center website.

Step 7 basically consists of setting up systems and procedures to ensure you accurately comply with the various Federal and State withholding requirements.  Assuming you have set up these procedures (or outsourced the task to a CPA or payroll service provider), you should be ready to deal with the next step in setting up your business – carrying and maintaining insurance for your employees.  Accordingly, the next newsletter will discuss Step 8 – Complying with Employee Insurance Requirements…

The Escondite

The Escondite

410 Boyd Street, Los Angeles, CA 90013 (follow the signs)

el escondite – noun.  Spanish for: the hiding place;  the refuge; the underground shelter; the shelter; the port of distress; the asylum; the lurking-place; the free port; the safety zone; the haven of refuge; the port of refuge.

So what's better than a bar named the Hiding Place?  A bar that’s named "The Hiding Place" in Spanish, and that’s actually hidden.  Really hidden.  And really really awesome.

For those who just started following my Bar Fly reviews, go back to my first article and read the first paragraph describing my ideal bar.  Normally, I wouldn't expect that kind of experience to exist in reality, so I usually just settle for places that come close to that ideal.  But what if it actually existed?

Imagine you’re trying to find a new hidden place.  Imagine you park on a dark side street across from the Higashi Honganji Buddhist Temple, where the western edge of Little Tokyo merges with the border of Skid Row.  Now imagine that rather than heading back into the tranquil, but lively and safe familiarity of Little Tokyo, you instead cross the street and enter into the unknown and foreboding darkness, along suspiciously abandoned streets lined by empty warehouses and run-down storage facilities.  Imagine that as you continue walking deeper into the unknown, you find yourself forced off the sidewalk and into the middle of the street as tents and sleeping bags progressively fill the walkways, becoming increasingly engulfed in the sleepy encampment of the local “residents” – heading deeper and deeper into what clearly seems to be the wrong way, at the wrong time.  Imagine you finally turn down a street, pass another row of tents and a small congregation of homeless guys, and stumble upon an empty looking brick building covered in ivy, set far behind a spacious parking lot.  Imagine you walk through the parking lot toward the front of the building, led only by an ambiguous blue neon arrow pointing toward a large heavy-set rustic wooden door, which is closed.  Imagine the door appears to have a mafia-style sliding peephole latch, covered by a speakeasy grill.  Imagine you knock on the door and the latch slides open from the inside, and a pair of eyes peer out at you.  Now imagine the latch closes, the door opens, and you’re led into a shockingly unexpected “sanctuary in the woods,” dimly lit with soft red lighting, antlers, cuckoo clocks, cow skulls, an incredibly ornate polished wooden bar, a giant wooden Indian, an inviting and friendly staff, live music, a huge assortment of beers and cocktails, and some of the heartiest food you’ve had since you were a kid…

Now wake up.  You just imagined what it’s like to experience The Escondite.

The Escondite is self-described as “a hideout that takes you away from the norms of L.A into a chill sanctuary,” and it certainly matches this description – sitting on the southeast corner of San Pedro and Boyd Street, on the border between Little Tokyo and Skid Row, in a place affectionately dubbed “Skidrowkyo” by its owners, Erin Carnes and Brian Traynam, the place is truly hidden – in both name and location.  And while the imaginary journey depicted above describes the back entrance to Escondite, the place is even hard to find from the front – set far back behind a large (and usually empty) parking lot and marked only by two wordless signs – an illuminated sign of Escondite's logo at the far corner of the parking lot (a single eye peering through a rustic wood door), and a blue neon arrow pointing to the entrance.

And while the place has a purposely sketchy location, once inside, it is absolutely amazing, in all respects – ambiance, food, drinks, views, and entertainment.  The place is actually split into two sections – an inside bar and restaurant, and an outside patio with a beautiful panoramic view of the downtown skyline.  The inside can really only be described as having an “American West” ambiance – displaying antler light fixtures, cuckoo clocks, cow skulls, stuffed white owls, posters of “American Outlaws,” pie tin lamps overhanging comfortable red booths, an exceptionally ornate polished wooden bar with a carved lion’s head, and brick walls with windows made out of wooden pallets.

And whether you want to eat or drink, the place will blow your face off, hosting nine draft beers, 15 bottle beers, cocktails, and a menu that includes a full assortment of appetizers, salads, sandwiches (“sandos”), and burgers named after TV shows the owners watched as kids – my personal favorites are the Fat Albert Burger (provolone, applewood smoked bacon, maple syrup, with a glazed doughnut bun) and the Capt. Kangaroo Burger (egg over easy, hash browns, cheddar, Canadian bacon, gravy and Cholula).  And if you’re just into beer, check out the Great Bottle Challenge, where participants taste eight craft beers – new brews and rarities – and play a drinks-trivia game.  Or if you’re just into eating (after drinking too much?), help yourself to the Hangover’s Revenge Brunch Menu (Saturday and Sunday from 11:00 am to 5:00 pm).

And if that wasn’t enough, The Escondite keeps long hours, open from 11:00 am to 2:00 am every day, and features live music 7 days a week.

So whether you’re into food, drinks, hang-over cures, live music, exceptional views of downtown’s skyline, or just hanging in a legitimate hideaway, The Escondite is a definite must – hands down one of LA’s best hidden gems.  And even if you’re apprehensive about strolling through Skidrowkyo at night, c’mon, who can pass up a bacon maple syrup burger with a glazed doughnut bun?  No one.