All businesses operating in the U.S. have to file an annual tax return, from a sole proprietorship to large corporations. (Partnerships still need to file an information return). The type of filing and tax rate depends on a number of factors, including the business type, size, and industry. Just like an individual tax return, the Internal Revenue Service (IRS) can issue penalties for tax violations. However, many IRS tax violations provide for higher maximum fines and penalties for businesses.
If you are a business owner dealing with a federal tax issue, have a question about business taxes, or received an IRS notice, contact Juda Gabaie at Gabaie & Associates, LLC for help.
There are many taxes a business needs to deal with, including state and local taxes. The primary types of federal business taxes that small businesses have to report and pay include:
Individual taxpayers generally only think about their tax issues before the filing deadline in April. However, businesses need to make regular payments and withholdings throughout the year. If taxes are not automatically withheld or not enough is withheld, the business may have to make regular tax payments based on income as it is earned.
Many self-employed and small-business owners have issues dealing with the IRS where it is not always clear what is a personal tax issue and what is attributed to the business. Tax issues for self-employed or small businesses may include:
Many new businesses start with the founder working endlessly to get the business off the ground. Starting a new business, working as an independent contractor, or freelancer may mean that the taxes that were recorded in your pay stubs as an employee will now be your responsibility as a self-employed individual.
Being self-employed generally means pay self-employment taxes towards social security and Medicare. Self-employment taxes are generally required for any income of $400 or more. However, you may be able to deduct half of your self-employment taxes as an adjustment to gross income. Failure to pay or underpayment of self-employment taxes may result in a penalty.
When a business makes a mistake in filing a federal tax return, intentionally fails to file, or does not turn over the required taxes to the IRS, the IRS may come after the business for unpaid taxes, including additional penalties. Tax penalties on businesses may include:
In tax fraud cases, the IRS can also go after the taxpayer or business owner for criminal penalties. Criminal penalties for businesses generally allow for higher fines. Criminal tax fraud convictions may also carry the possibility of jail time.
Business owners may not have the time to deal with IRS tax notices or letters. If you received a notice from the IRS, contact Gabaie & Associates, LLC for a free consultation. We have successfully represented businesses small and large in dealing with the IRS, challenging tax assessments, and avoiding tax penalties. Contact Juda Gabaie online or call (410) 862-2198 for help with your IRS or Maryland tax issues.
The information contained in this website is provided for informational purposes only and may not reflect the most current legal developments, and should not be construed as legal advice on any matter. The transmission and receipt of information contained on this Web site, in whole or in part, or communication with Gabaie & Associates, LLC via the Internet or e-mail through this website does not constitute or create a lawyer-client relationship between us and any recipient. You should not send us any confidential information in response to this webpage. Such responses will not create a lawyer-client relationship, and whatever you disclose to us will not be privileged or confidential unless we have agreed to act as your legal counsel and you have executed a written engagement agreement with Gabaie & Associates, LLC. Contact a licensed attorney for advice in specific legal issues.