Many people desire to give gifts and bequests to friends or relatives with special needs. But to accomplish this wish the person must consider whether the gift or bequest will cause the beneficiary to lose their government benefits. Ensuring the beneficiary will continue to receive their government benefits, such as Medicaid or Supplemental Security Income (SSI), may require that the person give the gift or bequest through a special needs trust, also known as a supplemental needs trust.
When providing such a gift or bequest you intend to improve the comfort of the person with special needs, not relieve the government of its burden. However, certain government benefit programs require that the person be financially needy. If the person with special needs has assets in excess of $2,000, then the beneficiary will not qualify for Supplemental Security Income (SSI). So, if you gave your child with autism $50,000, then their SSI, Medicaid, and other government benefits could stop and they would need to live on your $50,000 gift until their assets are back to being under $2,000. At the end of the day, the only one benefiting from such a gift would be the government. Because of this and similar issues, attorneys developed planning techniques by which the person with disabilities will receive the benefit of your contribution without losing their medical and other benefits.
Continue reading “Maryland Special Needs Trusts”
Unlike most business debts, employees and owners of a Maryland business can have personal liability for the company’s tax debts. Similar to how the IRS pursues responsible persons and owners for payroll taxes, states, including Maryland, also pursue responsible persons and owners for certain state taxes. A person that normally would be protected from business liabilities by a personal liability shield, such as the corporate or LLC entity, will not be able to similarly avoid these tax liabilities.
The state of Maryland will pursue employees, managers, officers, and owners for unpaid taxes. The person does not need to Continue reading “Personal Liability for Maryland Business Taxes”
Squeezed into the Democrat’s health care reform bill was a little noticed provision for a 10% “excise” tax on tanning services. Under the bill’s Section 5000B, the tanning tax “shall be paid by the individual” receiving the services. The tanning business must “collect” the tax and “remit” the amounts paid, otherwise the company is responsible for the amounts it failed to collect and remit. Does this concept sound familiar? Welcome to what could be the beachhead for a national sales tax.
Continue reading “A Prelude to a National Sales Tax?”
The 2010 Pennsylvania Tax Amnesty officially ended June 18, 2010. If you missed the deadline you may still be able to negotiate payments and reduce your penalties for past due taxes. For instance, you may be able to use a Voluntary Disclosure Agreement. Please contact my office for more information.
Pennsylvania has joined the parade of states that decided to use a tax amnesty for an immediate boost to their state’s revenue. The Pennsylvania tax amnesty begins on April 26, 2010 and ends June 18, 2010. Included in the taxes eligible for amnesty are the corporate income tax, the individual income tax, and the sales and use taxes. This can be an excellent opportunity for businesses and individuals located outside the state to become compliant with Pennsylvania.
The Pennsylvania tax amnesty relieves the taxpayer of all penalties and half the interest due… Continue reading “Pennsylvania Tax Amnesty 2010 Summary”
If you are unable to pay the Internal Revenue Service for taxes you owe, you may be able to qualify for a tax payment plan. The IRS calls such payment plans an Installment Agreement. Your state, including Maryland, also may offer similar tax payment plans.
While most would prefer to obtain an offer in compromise, which reduces the total tax debt, many will not qualify because either their income is too high (by IRS standards) or the taxpayer has too many assets, which includes home equity. Thus, that taxpayer’s only option may only be to request a payment plan. Continue reading “Tax Installment Agreements – Payment Plans”
When purchasing real estate for investment, you should be concerned about the liability your investment property can create. Often, your biggest worry will be paying the mortgage, but don’t think that’s the extent of your possible liability. A personal injury attorney could turn your retirement investment into a wealth destroying nightmare unless you protect your assets.
The most common way to minimize your potential liabilities would be to have your properties held by and managed by a separate entity with limited liability. While you may consider the property to be separate from your personal assets, unless you proactively create that separation, an attorney will pursue your personal assets in addition to the value of the property itself… Continue reading “Form a Maryland LLC for Real Estate Investments”
When forming a new LLC or corporation many contemplate whether it’s better to form their entity in their home state or in another, such as Delaware or Nevada. For most small businesses, the best state for formation is its home state.
Many believe their businesses will receive tax or legal benefits for forming in an alternative state, and legal document mills often perpetuate these beliefs to sell incorporation packages… Continue reading “Where Should You Form Your Entity?”
Choosing an entity for your business can be a difficult decision. There are many types of entities available, and you are not limited to forming an entity in your state. Further, the entity you choose does not necessarily determine how the entity will be taxed. For instance, you may choose to form a Maryland LLC but also choose to have it taxed as an s-corporation. The decision depends upon many factors including: the business purpose, the property to be owned, expectations to terminate or sell the business, the owner’s estate planning concerns, and, of course, taxes. There is no universal “best entity”, and choosing the proper entity requires every business to be individually analyzed.
Most states, including Maryland, provide you with the following popular state entity choices: the sole proprietorship, the general partnership, the limited liability company, and the corporation. Other entities for more specialized purposes also exist, such as the limited partnership and the professional association (a P.A. or P.C.).
Continue reading “The Best Entity for Your Maryland Business: LLC or Corporation?”
With Maryland tax audits increasing, you should ensure your company is prepared. An ongoing, organized approach to preserving necessary documents will streamline a sales tax audit and may even lead to tax refunds. First, beware, a state auditor visiting your office for a sales tax audit isn’t required to keep the focus solely upon sales taxes. A typical audit may cover other area such as your payroll taxes, and information obtained through the audit can lead to income tax adjustments as well. So, while a sales tax deficiency may only cause a minor sales tax adjustment, the revenue and expense information obtained can lead to sizable state income tax adjustments. Further, since states share their income tax adjustments with the IRS, you may trigger a federal income tax audit and adjustment as well. Continue reading “Maryland Sales Tax Audit Defense”
Your company may need a sales tax matrix or taxability guide to ensure employees know how to fullfill their sales and use tax duties. Sales and use taxes are inherently complex, in part, because each state’s rules vary. This leaves many tax departments ill-equipped to adequately maintain every tax and accounting responsibility. Sales and use tax requirements do not only concern tax departments as accurate reporting can require the efforts of any employee with the ability to pay a bill or issue an invoice. Continue reading “Sales Tax Matrices and Taxability Guides”