Keeping tabs of your Maryland business taxes is a responsibility when starting a business in Maryland. While you may assume that the government especially the IRS isn’t very interested in your tax liability as a small business, this can’t be further from the reality.
Today, small businesses are also closely monitored by the IRS when it comes to tax liabilities and obligations. For this reason, you should pay close attention to tax responsibilities at the time of your business formation to avoid any tax issues as you begin operations.
This guide provides you with the starter information about Maryland business tax, including the different types of business taxes most businesses in Maryland are required to keep tabs on. Remember that these tax types also vary depending on the legal structure chosen to incorporate in, among other factors.
Maryland has a corporate income tax with a flat rate of 8.25% on net income. In Maryland, taxes pass through entities like Corporations, LLCs, and partnerships to the degree that there are nonresident members. Unlike other states, Maryland has no privilege tax or franchise tax that are applicable to businesses.
There are a lot of forms and paperwork for completion as you fulfill your tax liabilities with the government. It is necessary that you have a copy of all the standard forms used to facilitate for easier compliance. For Maryland federal tax forms and publications, your number one go-to should always be the Comptroller of Maryland website.
Here, you will find a comprehensive list of all tax forms and publications needed to complete your tax liability. Instructions as to how each form should be filled out and completed are also provided to minimize errors and wrong submissions.
The Maryland Unemployment Insurance is provided as benefit to able workers who have been unemployed through no fault of their own. These workers are actively seeking employment, and the Unemployment Insurance provides benefits to them while they are in the process of finding employment. As a startup entrepreneur, you may be required to file for this tax if you qualify with certain criteria.
A 6% Maryland sales and use tax is in effect in the state. This is in effect when you purchase any tangible good personally or via phone or the Internet for use within Maryland. Additionally, a 9% tax on alcoholic beverages is also imposed. The sales and use tax complement each other; when a purchase is made within Maryland, the sales tax applies.
On the other hand, purchases made outside the state but to be utilized inside Maryland should have a use tax. For more details on Maryland sales and use tax, you can follow this guide.
The paperwork alone in complying with business tax requirements can be overwhelming. There are several application tools that can be used to make your business tax life easier. These tools help you comply with requirements easier and much more efficiently.
One of the tools that can be a great assistance to the timely and more orderly completion of your business tax requirements is an accounting software. This tool is not only limited to making accounting tasks easier, but it also includes a host of other features that can be used in other repetitive tasks in a small business.
A small business accounting software is commonly used by businesses to help automate accounting, financial, and bookkeeping tasks. Instead of hiring a professional service, small business accounting software such as FreshBooks, Xero, as well as QuickBooks offer a great and more cost-effective alternative. From tracking expenses, generating financial and accounting reports, to creating payrolls for a small number of employees, these application tools can deliver the job efficiently.
Be reminded that this article is only an informational guide and not a legal tax advice. A business lawyer should be consulted in the event that you want to know about the specifics of Maryland business taxes or the legal complexities involved in starting a new business in Maryland.