TOP 10 TIPS FOR CALCULATING MARYLAND TAXES
Maryland is a state known for many small businesses, whether Baltimore, Salisbury, Ocean City or Frederick there are many establishments for people to find a product or service they're looking for.
Many of the SME’s in Maryland, above 100, 000 in fact have employees. That’s a huge number of entrepreneurs who attend to concerns like staffing and payroll.
Maryland has a small business program that helps small businesses succeed.
Under this program, small businesses can apply for state loan and grants to help the business grow. Maryland also has a program called the Maryland Main Street Initiative that provides loan and grant opportunities to local retail communities.
Many Maryland small businesses are considered historical landmarks because they have been around for decades.
For example, The White Spot Restaurant in Ocean City was opened in 1939, and is still open today serving seafood and other favorites to many tourists and residents alike.
There are many other examples of local Maryland businesses such as: Baltimore Pretzels on Charles St. The Diner on 33rd Street in Hampden Peter’s Inn and Bakery in Columbia, Maryland or Larder popups.
One thing they all have in common though, is that they were ran by regular citizens - business owners, most of whom probably had employees.
And if they did, they for sure had to deal with taxes and payroll on a regular interval. This is why keeping track of your MD State and Federal Taxes is vital.
We're going to get into that in the table below:
| Single and Married Filers | Rate |
| $0 - 1000 | 2.00% |
| $1000 - 2000 | 3.00% |
| $2000 - 3000 | 4.00% |
| $3000 - 100,000 | 4.75% |
| $100,000 - 125, 000 | 5.00% |
| $125, 000 - 150, 000 | 5. 25 % |
| $150, 000 - 250, 000 | 5.50% |
While filing taxes can be a hassle, this is why you can tremendously benefit from using a Maryland Paycheck Calculator.
The benefits of using a Maryland Pay Stub Generator or Paycheck Calculator can give you so much more time and freedom because the dynamic values and auto calculations can give you opportunity to compute your net pay!
If you're a business owner or you work a couple of gigs but are also self employed, it's important to stay on top of your taxes! You must remit your Maryland State Taxes on time so your business can stay compliant and there can be a steady flow of income.
If you're worried about how tedious it is to make calculations to your state and federal taxes, there are some tips to make sure you're efficient. Here are 10 tips in helping you prepare your Maryland taxes
1. Create a Schedule of Worksheets
If you're self employed, it helps to create a schedule of worksheets to keep track of your expenses and income.
By creating an organized system, you can easily monitor your earnings and expenses so there are no discrepancies when you make your tax payments.
You can also have this as a reference for when you prepare your taxes.
It's also helpful for monitoring your business over time so you're not caught in a surprise if ever audited by the IRS or State Board of Assessment Review
2. Keep Financial Records Organized
When it comes to taxes, financial records are vital in keeping track of your earnings and expenses.
It's important that you keep meticulous records to make sure there aren't any errors if ever audited by the IRS or Maryland State Board of Assessment Review.
If you're confused about how to organize them all, here are some tips:
Keep documents such as receipts and invoices in folders according to their categories (food receipts, office supplies, etc.) This way, it'll be easier for you to keep track of everything when preparing taxes at a later date.
If ever audited by the IRS or Maryland State Board of Assessment Review , you won't have a hard time finding these documents.
Label them with categories (for example: food receipts) so that it'd be easier for your accountant to look through them during tax preparation season.
3. Use Payroll Software That Can Collect All Your Tax Information in One Place
For your convenience, finding payroll or tax software will be able to calculate all the information necessary for your tax payments so that filing is easy during tax season.
4. Make sure you outsource your payroll if you find doing these tasks overwhelming
You can hire a payroll service provide or an accountant to help you with these tasks.
The best part is that they'll have all the information inputted through your payroll staff automatically.
All you need to do is to give them your income and expenses amounts, and they'll be able to calculate your taxes.
Hire a reliable payroll outsourcing company.
5. Remember the Payment Days and Collections
It’s good to start a calendar to consolidate your payment dates and transactions.
If you don’t have a calendar you tend to forget!
Online pay stubs can help you set up pay periods and intervals.
But for other tasks and chores which relate directly to payments on your Maryland tax withholdings, then you have to have a systematic and organized calendar.
6. Get your W2's and 1099's ready - Familiarize the tax forms
If you're a freelancer or someone who's self-employed, you should get familiar with the tax forms that are necessary in filing your taxes. Here are some of the most common ones:
Form W2 - This is your employer's way of reporting how much you earned.
Form 1099-MISC - This is for independent contractors and freelancers who have sold something, rented property, or performed services during the year.
This form will show if you're required to pay taxes on your income and gives details about your earnings.
Form 1040 - This is the standard US federal income tax form.
If you own a business, this form has information about how to report your company's operating expenses and income, among other things.
Form 1120S - This is the integrated corporate tax return for small businesses with $25 million or less in gross receipts for the year.
7. Start Tracking Your Taxes Early
It's important to start tracking your taxes as early as possible in order to make sure there isn't any confusion when it comes time to file them at the end of the year.
It's best to know what documents are required as well as which taxes must be paid by certain deadlines so that you can plan ahead!
The sooner you start, the easier it'll be for you to track everything so there won't be any surprises in terms of missing deadlines or filing requirements!
8. File On Time - File Extension If Necessary
Filing for extensions is paramount if you aren't liquid yet or are too busy, Maryland tax laws. Remember though if you request certain extensions, then you have to put it in writing.
9. Know What You're Going to Deduct from Your Tax Payments
It's important that you know the deductions that are available for small business owners.
This way, there won't be any confusion when it comes time to file your taxes!
Here are some of the most common deductions that you can use on your state and federal taxes
Travel
Meals
office supplies
Equipment
capital expenses
These will help you write off the cost of purchasing assets or property that will last more than a year Business related travel expenses - if you have to travel for business purposes (local or international), this deduction will help you lower your tax payments. Interest on home equity loans Tax preparation fees Advertising costs Depreciation - this is used to deduct money that's used to purchase assets or property in your business's name. Don't forget about depreciation when filing for your taxes!
10. Understand The Exemptions That You Can Use As a Self Employed Person
Exemptions on self employment taxes are very different from those who work as an employee. These can be claimed on Form 1040 schedule SE . Here are some of the most common exemptions:
Another exemption that's used for self employed persons is the deduction for the employee portion of social security and Medicare taxes. These are also claimed on Form 1040 schedule SE .
For self employed entrepreneurs here are some other deductions:
Deduction for Self Employment Earnings
this is an adjustment to your income for the amount of money you've earned as a self employed person. You have to pay this when you file taxes, but it can be deducted from your income.
This means that you'll pay less in taxes!
Deduction for One-Half of Self Employment Tax
This is another deduction that can be claimed against your tax payments. The Social Security and Medicare Tax paid (reported on Schedule SE ) can be deducted from your tax payments because it's considered to be an expense or loss incurred in relation to your business.
How to Manage your Maryland Taxes Efficiently
In summary, you’re going to have to be limber in a way with your remittances and dues.
Having an organized way of approaching your payments and your taxes can help you stay on top of things.
Outsource some tasks if you have to.
Remember to use a paystub generator or payroll software you prefer to make sure your taxes become automated and efficient.
