The Importance of Tax Law and Tax Returns

By on 4-30-2015 in Business

If you’ve ever had a job in the United States, you’ve likely had to do your taxes at one point or another. It starts off with you filling out a small mountain of paperwork when you first get your job and ends with you filling out a slightly-larger mountain of paperwork during tax season.

For a lot of us, tax season is a fun time of year because we usually get a bit of money back with income tax. This money is given back to us because the government took x amount of money out of our checks when it was not necessary.

The checks we receive around tax season fund a lot of things for different people. Some get much-needed work done on their cars, while others use the money for their summer college tuition. Other people have more reliance on their income tax checks, and when they don’t receive it, disaster could strike.

Certain low-income groups budget the first half of their year on receiving their income tax, and one mistake could prevent them from getting it. Even one small error on one line of paperwork can throw a huge wrench into things.

And when these people don’t have the money that they were counting on, they can run into a lot of trouble with various groups of people to whom they owe money. They quickly rack up late fees for car payments and struggle to pay back other loans.

You’d think that because income tax is such a vital source of income for some people, the laws surrounding filing would be simple.

Well, according to THEVOZ Attorneys, LLC, tax law is one of the most complicated laws out there, especially in the United States. This means that the average person likely struggles to understand just how those forms work.

If there is an error on the tax filing, the Internal Revenue Service will send a notice to the taxpayer and give them a window of time to fix it. Hopefully, the taxpayer can fix it and the issue is resolved. But, if the taxpayer is unable to fix the issue, or does not even think that there is an issue, a lot of other issues can pop up.

One of the consequences of incorrectly filing taxes is paying a hefty fine, and a more severe consequence is jail time. Now, neither one of these options sound particularly appealing, do they?

The best thing for someone who feels a bit confused on their tax filings is to find someone who can help guide them through the process. There are a few online services that will file someone’s taxes for them for free. If there are any issues, the website can help them out.

But the big issues arise when those websites fail to catch issues and the client is left confused and alone. A law office well-versed in tax law can help challenge tax disputes and ensure that the taxpayer ends up with everything filed and put away neatly.

Business Formation: Is a Limited Liability Company Right for You?

By on 4-30-2015 in Business

Starting your own business will involve a long process that can be hard to accomplish. There are important decisions to make and crucial arrangements to be made. After coming up with a marketable idea, the first step of business formation is usually deciding what type of structure works best with your plans. As the website of Arenson Law Group, PC puts it, every type of business structure has its own advantages and shortcomings. It’s important that you learn the nuances that differentiate each type of structure to learn which one suits the type of business you’re planning to run. Only after you have learned about the many types, you can start and make a decision that best suits for you.

One of the legal structures you can consider is a Limited Liability Company or LLC. According to the U.S. Small Business Association (SBA), an LLC provides a legal structure that allows a business to combine certain characteristics that make partnerships and corporations. In an LLC, business owners (called “members”) have limited liability protection, protecting personal assets from lawsuits and debts. The business can also benefit from tax efficiencies and operational flexibility when there are multiple members involved. With an LLC structure, your business will not be considered a separate tax entity. Instead, all the taxes required by federal law will be passed on to the LLC members as part of their personal income tax.

On the flipside to these advantages, the SBA points out that an LLC often have a limited life. Depending on where your business is registered, you might have to dissolve your LLC once a member steps away from the operations. Members of an LLC are also categorized by law as self-employed and will have to follow appropriate policies about tax contributions and similar payments.

It’s important to note that not all businesses will qualify to register as a Limited Liability Company. As mentioned earlier, the structure you choose will depend on what type of business you’re planning to operate. These qualifications and requirements might differ depending on where you live, so it’s best to consult with an experienced business lawyer in your area.