As the largest tax collection agency in California, the Employment Development Department (EDD) is charged with collecting payroll taxes from over 17 million workers every year, accounting for over $31 billion of California’s tax system.
Because of its tremendous responsibility, the EDD cracks down hard on those who fail to file the right forms or make appropriate payroll tax withholdings. When dealing with the EDD, there is little room for small business owners or employers to make a mistake.
How to Reduce Your Risk of an EDD Audit
Properly Classifying Workers is the key to avoiding EDD Audit
Ensuring that all of your workers are classified correctly is one of the strongest ways to reduce your risk of an EDD audit. A large portion of California EDD problems are caused by worker misclassification. It can be confusing for small business owners, especially if you are just starting out, to accurately determine whether a worker is an employee (receiving a W-2) or an independent contractor (receiving a 1099).
San Diego’s Top EDD Audit Attorney
If you are struggling to resolve California EDD problems while trying to keep your small business running, look no further than our team. At Milikowsky Tax Law, we are committed to protecting our clients’ best interests and providing expert legal counsel. We understand that dealing with any government agency, particularly the EDD, can be daunting. Working with one of our San Diego EDD audit attorneys will provide you with the defense you need to protect your business.
How to Navigate an EDD Audit: A Client’s Journey with Milikowsky Tax Law
Create the Lab, an event and film production studio in Hawthorne, California, was audited by the California Employment Development Department (EDD), founder Mykel feared a significant financial blow. But with the expert guidance of Milikowsky Tax Law, the experience turned into an opportunity to improve his business operations.
Watch the video below to hear Mykel’s firsthand account of navigating the EDD audit and how Milikowsky Tax Law helped him protect his business.
Keep reading to learn how Mykel navigated the audit process and the valuable takeaways that helped strengthen his business moving forward.
Facing the Unknown: Mykel’s EDD Audit Experience
When Mykel first found out that Create the Lab was being audited by the California EDD, panic set in. “It just threw us into this kind of downward spiral,” Mykel shares. “We had no experience with this, and every door that opened seemed to lead to scarier surprises.” The fear of facing tens of thousands of dollars in fines for misclassifying 1099 workers was daunting.
But as the audit progressed, Mykel realized that the fear of the unknown was far worse than the reality, thanks to the help of Milikowsky Tax Law.
Turning a Crisis Into an Opportunity
Instead of crumbling under the pressure, Mykel and his team at Create the Lab learned valuable lessons from the audit process. “What we learned from the process was incredibly valuable,” Mykel reflects. “Not only did we avoid paying tens of thousands of dollars, but we gained the knowledge to prevent similar issues in the future.”
Through the guidance of Milikowsky Tax Law, Mykel’s business learned key strategies for avoiding common audit triggers, such as errors in 1099 filings and improper EIN management. “I now know exactly what to avoid when it comes to employee classification and tax filings,” he says, “and I feel more confident in running my business.”
The Relief of a Positive Outcome
When the audit ended with the announcement of “no change,” Mykel could hardly believe it. “It almost felt too good to be true,” he admits. “But knowing that Milikowsky Tax Law had been there every step of the way, guiding us carefully through the process, made all the difference.”
The outcome was a huge relief for Mykel and his team, and it allowed them to focus on what mattered most: growing and running their business. “The best part wasn’t just avoiding the financial penalties but gaining peace of mind and a deeper understanding of how to manage our business more effectively in California.”
Key Takeaways from Mykel’s EDD Audit Experience
Let Milikowsky Tax Law Help You
If your business is audited by the California EDD, don’t face the process alone. Call Milikowsky Tax Law at (858) 450-1040 to get the expert support you need. Hear more from Mykel about his business’s audit journey and how Milikowsky Tax Law’s team helped him successfully navigate the audit process.
Your business deserves the best protection and guidance—let Milikowsky Tax Law be your trusted partner in staying compliant and thriving in California.