Business Taxes

Tax codes and statutes are not only complex and ever changing, but also require businesses to navigate regulatory regimes on federal, state and local levels. Priori’s curated legal marketplace makes it easy to find and hire a lawyer who specializes in taxation and who can handle all your business’s tax needs.

In the United States, taxes generally are imposed on businesses and individuals at each level of government: federal, state and local. A range of types of taxes may be imposed at each level, including:

Federal Taxation

  • Social Security and Medicare. Contributions to the U.S. social security system that are paid by every employee through the deduction of these taxes from wage payments. Employers are required to withhold these taxes from paychecks, regardless of whether you anticipate benefiting from these programs.

  • FUTA. Federal unemployment tax provides for payments of unemployment compensation to workers who have lost their jobs. Employers must pay FUTA, but do not withhold a share from employees’ wages.

  • Self-employment tax. Imposed on income that arises from the performance of personal services where no employer-employee relationship exists.

State & Local Taxation

These obligations vary significantly depending on where your business operates. State and local taxes often include:

  • Income tax. Like the federal government, most states and some local governments also require the tax on the income of individuals, corporations, trusts and other legal entities.

  • Sales tax. Levied on the sale or lease of goods. Sales tax rates vary from state to state and locality to locality, so it is imperative to understand your specific tax obligations in each place you sell goods.

  • Unemployment tax. Many states, like the federal government, require the payment of state unemployment tax.

  • “Doing business” tax. if your business is not incorporated in a particular state, but you plan on doing business there, you may need to pay a “doing business tax”. This may require filing appropriate tax returns and paying appropriate taxes and fees.

Whether you run a small business, emerging company or established corporation, taxes are assessed differently from how they are assessed with respect to individuals. Accordingly, many businesses choose to work with lawyers upfront in order to structure their business relationships and operations in order to minimize tax obligations and avoid costly mistakes. Common corporate tax considerations include:

  1. Location of Business and Sales Tax Obligations. A Lawyer can help you figure out both what taxes may be assessed as well as in what states and localities your business may be required to file tax returns. State and local taxation can be particularly complicated for businesses that make sales via the internet.
  2. Key Business Transactions. Financings, mergers, acquisitions, asset purchases and reorganizations can each have significant tax consequences for your business. A lawyer can help you understand potential tax implications upfront and work with you to structure the transaction accordingly in order to optimize your tax obligations.
  3. Employment. The legal structure you use to work with individuals (for example, as employees or as independent contractors) and to pay those individuals can impact your business’s tax obligations.
  4. Benefits. The decisions you make regarding providing benefits to your employees can impact your business’s tax obligations, such as health coverage or workplace wellness programs.

If your business operates outside the United States in any respect, whether via sales, operations, or location of employees or independent contractors, a lawyer can help you consider the both the U.S. taxation implications of your international business as well as tax obligations that may arise in other countries by virtue of your sales, operations or employees located in those countries.

While engaging a lawyer is one of best ways to prevent tax controversies for your business, an experienced tax attorney can efficiently and effectively resolve any controversies that may arise.  This can range from formulating overall audit strategies, dealing with IRS agents, handling cases in front of IRS Appeals Office and managing tax litigation.

FAQ

What is the difference between an accountant and a tax lawyer?
While certified public accountants (CPAs) can represent you in front of the IRS, their expertise lies in maintaining business and financial records. This includes preparing and filing your taxes or providing general advice your personal and professional financial issues. CPAs cannot, however, research tax law issues and provide legal advice. Tax attorneys, on the other hand, specialize in the intricacies of the tax code. They can provide legal advice on how best to structure your company to receive favorable tax treatment, represent you in front of the IRS and maintain attorney-client privilege in face of tax crime allegations. In addition, attorneys are trained negotiators that can help resolve complicated personal and business tax issues. In certain cases, it may also make sense to have a tax lawyer prepare your returns.

Pricing

While the cost, both total and hourly, for your business’s tax needs can range dramatically, Priori’s tax lawyers save you money on your legal fees with rates starting as low as $150 per hour.

 

When should your business hire a tax lawyer?

A tax lawyer can help throughout your business’s life cycle. From the outset, you should consult a lawyer to help you understand the different tax implications of various business entities and choose the right formation structure for your business. In addition, developing a relationship with a tax lawyer who understands your business and can counsel you on a wide array of legal issues will save you significant time and money in the long run. This can range from tax planning, filing and compliance to avoiding or minimizing the cost of audits and disputes.  

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