Business Tax Services
It’s the dream of many Americans to run their own business. This motivation is strong to be your own boss and serve a need or provide a product. Many have specific expertise and want to leverage that in the marketplace. We work with our business clients on several specific areas of business management.
Business Formation and Organization
While the business lawyer is the point of contact for the actual legal document, filing with the state and establishing the business, we assist our clients in the decision making when forming the organization for a particular business. There is no one form of organization which fits all businesses. As part of the business plan a company considers many things – owners, employees, customers, taxes, employee benefits, liability protection and many more. Depending upon the objective of any given business we consider tax minimization, record keeping and benefits to the employees and owners.
Business Income Taxes
Some Corporations will file their calendar year income tax returns by March 15th and some file by April 15th. It is important, therefore, to have your business accounting up to date. Not only does the accounting assist you in making business decisions, but it is the basis for the data to be reported on the corporate tax return. Sometimes there are expenditures which apply to both the business and an individual. Please consult with us on how to handle those mixed use items.
When filing the corporate tax return there are various elections and statements which need to be filed with Internal Revenue Service to ensure that the corporation receives the treatment and benefits it desires. We assist in making sure these elections are appropriate and in force.
Like individuals, businesses which have a tax burden need to pay taxes on a periodic basis along the year to ensure that adequate amounts are paid in without penalties to be incurred. We help our clients determine the correct amount and advise as to the most efficient payment method.
E-filing Income Taxes
We fully participate in the e-filing of business income tax returns. Via this process the returns are sent through our software vendor to the IRS and state(s) involved. We receive positive confirmation in 24-48 hours that the return(s) have been accepted. This is by far the most secure way of filing your income tax returns. It also saves time in the processing of your returns
Consultations and Annual Meetings
Each business should hold annual meetings reviewing the operations of the previous year and setting out any actions by the shareholders and board of directors. Even businesses which are not corporations should take the effort to step back annually to evaluate the operations and plan for any changes in the upcoming year. We assist our clients in planning, executing and recording the minutes of the annual meetings so they are in compliance with state regulations and have a clear vision of the next steps for their business.
With any business which will operate for many years, a succession plan is needed to ensure the objectives of the business are met and customers, patients and clients’ needs are met without interruption. With the assistance of attorneys and insurance experts we can be helpful in planning for a smooth succession. Without proper planning clients, employees, spouses and others may be unprotected.
Individual Tax Services
Personal Income Tax Filing
Who must file tax returns? In general – all US citizens and residents must file personal income tax returns on their worldwide income. What income is taxable? All income is taxable unless specifically exempted in the tax code. This is where the confusion and complexity begins.
The largest project many tax payers have to complete each year is their personal income tax returns. They agonize over the record keeping, tax planning, completing and submitting the forms. The Internal Revenue Service estimates that for the basic Form 1040, 16 hours would be required for all the steps. And that doesn’t include any of the supplemental schedules and forms.
We recognize this project can be daunting. We seek to make all of this easier for our clients. We remove the burden of preparing the forms, reviewing the forms and submitting the forms. Whether you have a more basic situation or a complex one with many differing issues we have the expertise to assist you. The most common forms we file for our clients are:
Form 1040 – Individual Income Tax Return
Schedule A – Itemized Deductions
Schedule B – Interest and Dividend Income
Schedule C – Profit or Loss from Business
Schedule D – Capital Gains and Losses with associated Forms 8949
Schedule E – Supplemental Income and Losses
Schedule F – Profit or Loss from Farming
And literally dozens of more forms and schedules
If you have special situations like – children in day care, IRA or retirement plan contributions and withdrawals, specialized credits and deductions, income tax surtaxes, alternative minimum taxes, large charitable contributions and many others, we can explain the rules and their impact on your personal income tax returns.
Estimated Income Taxes
One of the issues to keep in mind is the upcoming year. As you are filing last year’s return you need to consider what is happening in the current year to be sure you are pre-paying the appropriate amount of income tax and not too much. If your income varies such as with self-employment or your situation changes – a second job, a new job, new marriage, consulting work, collection of retirement income while still working, etc. – you may have an estimated income tax challenge. It can easily happen when there is more than one source of income as withholding is computed as if there is only one source of income. We consult with our clients to understand the big picture for their estimate tax burdens so they are not caught unaware at year-end.
E-filing Income Taxes
We fully participate in the e-filing of personal income tax returns. Via this process the returns are sent through our software vendor to the IRS and state(s) involved. We receive positive confirmation in 24-48 hours that the return(s) have been accepted. This is by far the most secure way of filing your income tax returns. It also saves time in the processing of your returns. If you are receiving a refund, you can also direct the refund be deposited into your bank account. If the return is a joint return the bank account must also be a joint account with the same person.
Prior Year Taxes Not Filed
If you have fallen behind – yes it does happen – and you have not filed your current or former year’s tax return we can assist you. It is best to always file your return, even if you cannot pay the full amount due at the time. You will at least be on the record as filing the return. If you owe additional taxes at least you won’t have any late filing penalties.
If you are behind more than one year you should generally prepare the taxes in order as there are several carryover computations which may apply to you in later years. If you had already filed the taxes out of order you may need to amend the later returns.
Sometimes events subsequent to the tax year, or inaccurate reporting by others, change the amounts you reported as income or deduction. If this happens you would file an amended income tax return to correct the record. This could result in a balance due or a refund depending upon the particular circumstances. In general, you can only collect a refund if the amended tax is filed within 3 years of the original due date of the return. For example – the 2014 tax returns were due 4/15/15. If your 2014 return needed to be changed you could claim a refund up to 4/15/18. There is no time limit for the filing of an amendment to record additional tax due.
State Income Taxes
While our offices are in MD we are qualified to prepare income tax returns in all states. If you move from one state to another you will likely have filing requirements in both states for the year of the move. This can be further complicated if both spouses move at different times. If you live in one state but have rental property or a small business, partnership or investment property in another state you will likely be liable to at least file in the non-resident state. You may or may not owe additional income tax, but most all states require a filing. Many times your resident state will grant credits for some if not all of the tax paid to the non-resident states, the rules vary state to state.
Audits & Examinations
No one likes the thought of being audited or examined by the Internal Revenue Service or a state agency. Audits are generally chosen based upon certain criteria in the given tax return. You don’t need to fear an audit if you have good records to support all the income and deductions claimed in the tax return. If you don’t have good records you should not claim the deduction in the first place. You should retain those records for at least 7 years following the given tax return.
We are frequently asked “How long do I have to keep all this documentation?” There is no one perfect answer for all records and documentation. Some things you should keep indefinitely and some you can shred and dispose of relatively quickly. In the Downloads section of our website you can find our recommended records retention schedules for Individuals and Businesses. If you have particular questions, please email or call the office.