Business tax planning tips

Maryland business owners should have a long-term plan when it comes to paying taxes. Whenever a business experiences a financial gain or a financial loss, it may be a good idea to talk to a financial adviser who may be able to help a company minimize its tax burden. The first step that a business may want to take when it makes a profit is to create a retirement plan for its owner.

This will help an individual save for retirement while being able to deduct the contribution as a business expense. The next tip for business owners is to consider the structure of the business. While a sole proprietorship makes it easy to run the company, incorporating may provide legal protection that could save money in the future. An attorney may be able to help with additional paperwork that is involved when running a corporation.

Running a profit or loss projection every few months may help a company ascertain where it is headed from a financial standpoint. If sales are up, it may mean that more money will need to be set aside for taxes. Knowing that your earnings are projected to increase may help a business owner better coordinate with a tax professional who may recommend higher estimated tax payments throughout the rest of the year.

Business owners must always be aware of their tax burden and take steps to ensure prudent tax planning. Failure to pay taxes may result in steep fines from the government and other penalties on any back taxes owed. Companies that need help with tax planning or are currently being contacted by state or federal tax entities may wish to consult with a business law attorney.

Source: FOX Business, “5 Tax Planning Tips for Your Small Business“, Bonnie Lee, July 11, 2014

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