Best Tax Lawyers in Maryland

About Tax Law in Maryland, United States

Tax law in Maryland governs the rules and regulations regarding the assessment, collection, and enforcement of taxes within the state. It covers various types of taxes, including individual and corporate income tax, sales and use tax, property tax, estate tax, and other special taxes. Maryland tax law is administered by the Comptroller of Maryland and local authorities, with regulations that sometimes differ from federal tax laws. Understanding these distinctions is crucial for residents and businesses to ensure compliance and avoid penalties.

Why You May Need a Lawyer

There are several situations in which seeking legal help for Maryland tax issues becomes essential. Here are some common scenarios:

• You are facing an audit by the Maryland Comptroller or the Internal Revenue Service (IRS).
• You have received a notice of tax deficiency, tax lien, or are facing tax collection actions.
• Your business needs guidance on sales tax compliance, exemptions, or multi-state tax obligations.
• You are dealing with payroll tax issues or workers considered as independent contractors.
• You want to challenge a property tax assessment or understand appeals procedures.
• You are planning your estate and need advice on minimizing Maryland inheritance or estate taxes.
• You are considering bankruptcy and are unsure how it will affect your tax debts.
• You have failed to file tax returns or underreported income and are seeking ways to resolve these matters.
• You are purchasing or selling a business and need to assess potential tax liabilities.
• You are settling a family law matter, such as divorce, with significant tax implications.

Local Laws Overview

Maryland tax law includes several key aspects that residents and businesses should understand:

• Income Tax: Maryland taxes both residents and nonresidents on income earned in the state. The rates are progressive and supplemented by county income taxes, which vary depending on your locality.
• Sales and Use Tax: The standard rate is six percent. Some goods, such as groceries and prescription drugs, are exempt. Businesses that sell taxable goods or services must register and collect sales tax.
• Property Tax: Levied at both state and county or city levels. Assessments can be appealed if you believe your property value is inaccurate.
• Estate and Inheritance Taxes: Maryland is one of few states that imposes both estate and inheritance taxes, each with unique exemptions and rates.
• Business Taxes: Corporations, LLCs, and some partnerships pay a corporate income tax. Special rules apply to S-corporations and pass-through entities.
• Tax Credits and Exemptions: Maryland offers various credits for individuals and businesses, including earned income, child and dependent care, and renewable energy incentives.
• Tax Collection and Enforcement: The Comptroller’s Office has authority to collect unpaid taxes and may pursue liens, wage garnishments, or seize assets.
• Appeals Process: Taxpayers can appeal assessments or denials of refunds through the Maryland Tax Court.

Frequently Asked Questions

What income is taxable in Maryland?

Maryland taxes income from wages, self-employment, interest, dividends, rental income, and other sources. Nonresidents must pay tax on income earned within Maryland.

Do I need to pay both state and county income tax?

Yes. Maryland requires state income tax and also imposes a county tax, which is calculated based on the county where you live or work.

What is Maryland's sales tax rate?

The standard state sales tax rate is six percent, with some specific items exempted or taxed at different rates, such as alcoholic beverages.

How do I appeal a property tax assessment?

You can appeal an assessment with the Department of Assessments and Taxation. The appeal process involves submitting evidence that your property valuation is inaccurate.

Who must file a Maryland tax return?

Anyone who lives in, works in, or earns income from sources in Maryland may be required to file a tax return, even if they are not full-time residents.

How are estate and inheritance taxes different in Maryland?

Estate tax is levied on the estate of the deceased before assets are distributed, while inheritance tax is imposed on the beneficiary receiving assets. Rates and exemptions differ between the two.

What happens if I cannot pay my Maryland tax bill?

You should contact the Comptroller’s Office as soon as possible. Payment plans may be available, but interest and penalties can accrue on unpaid balances.

Are there tax credits available for Maryland residents?

Yes. There are various credits, including the earned income tax credit, child and dependent care credit, student loan debt relief credit, and others. Eligibility depends on your circumstances.

Do businesses in Maryland need to collect sales tax?

Businesses selling tangible personal property or taxable services must register with the state and collect sales tax from customers, filing returns regularly.

How long should I keep my Maryland tax records?

Generally, you should keep tax records for at least three years from the date you filed your return. In certain cases, such as underreporting income, you may need to keep them longer.

Additional Resources

The following resources can help individuals and businesses seeking information or assistance with Maryland tax laws:

• Comptroller of Maryland: Administers state taxes, provides forms, guidance, and assistance.
• Maryland Department of Assessments and Taxation: Manages property tax assessments and appeals.
• Maryland Tax Court: Handles appeals on disputed tax assessments and legal tax matters.
• Local County Tax Offices: Provide local tax information, property tax payments, and exemptions.
• Internal Revenue Service (IRS): For federal tax matters that may impact Maryland returns.
• Maryland State Bar Association: Offers public resources and lawyer referral services.
• Nonprofit legal aid organizations: Provide free or low-cost tax legal help to qualifying individuals.

Next Steps

If you need legal assistance with a tax issue in Maryland, consider the following steps:

• Collect all relevant documents, such as tax returns, assessment notices, and correspondence from tax authorities.
• Identify the specific issue - whether it is a notice, audit, collection action, or need for compliance advice.
• Contact a qualified Maryland tax lawyer, especially for complex or high-value matters.
• Consult with the Comptroller of Maryland or local offices for general inquiries or to clarify your obligations.
• If eligible, seek help from legal aid organizations or the Maryland State Bar Association for referrals.
• Be proactive - many tax problems have deadlines for responses and appeals. Acting quickly can help avoid penalties or loss of rights.

By seeking the right legal guidance and making use of available resources, you can better navigate Maryland's tax system and protect your interests.