Tax Law in Boston, MA

Tax law refers to the regulations governing the calculating, filing, and paying of taxes. When handling tax law cases, attorneys may manage taxes at various levels, such as local, state, and federal. The practice of this type of law involves understanding, defending, and resolving issues related to payment or non-payment.

If you hire a qualified , Massachusetts professional to handle your business or personal taxes, you may feel protected from disputes. However, even a misplaced comma or added zero can cause the IRS to believe you owe more than you do. In some instances, accountants might also take deliberate actions that result in legal and financial repercussions.

Under Massachusetts law, the state imposes a flat income tax on Boston residents. The current state income tax rate is 5% for a Boston resident with gross income of $8,000 or more. In addition, the City of Boston assesses and collects property tax on both residential and commercial properties. The 2022 tax rate for residential properties in Boston is $10.88 per thousand dollars of value. For commercial Boston properties, the rate is $24.98.

Tax Law Topics to Understand

If you find yourself facing , Massachusetts taxation issues, understanding tax law and how it works can help. Most Americans have only basic knowledge of how the tax systems work, and with good reason. They are complex. Small business owners need to understand tax law and how it impacts their business. Here are some essential tax law topics to get you started.

IRS Audits

An IRS audit is a review of an experienced Boston, Massachusetts individual’s or an organization’s finances and accounts to ensure accuracy. The audit may also uncover discrepancies business owners were not aware existed.

These are just a few of the things the IRS looks for when conducting an audit:

  • Does your lifestyle match your income?
  • Are you passing off personal expenses as business expenses?
  • Are you overstating any of your business expenses?
  • Did you fail to report any business income or did you inflate that income?
  • Do your payroll taxes match that of your employees?
  • If your business handles a lot of cash,  are you diverting any of this into your own pocket?

If you are about to have your business audited, consider hiring a qualified Boston tax law attorney. They can help you to navigate the complex process ahead and offer advice as issues arise.

Tax Evasion

Tax evasion refers to any activity an individual or business in , Massachusetts engages in to reduce or avoid their tax liabilities. There are two types of tax evasion: evasion of assessment and evasion of payment.

Evasion of assessment means the taxpayer performed an action with the goal of defeating the assessment of a tax. The under-reporting of taxes is a common example of this. Evasion of payment means that you avoid paying the IRS by hiding money or assets that should become taxed. Here are some examples of tax evasion:

  • Keeping a double set of books
  • Overstating deductions
  • Destroying financial records
  • Concealing sources of income
  • Filing a false return
  • Making false invoices
  • Holding property in another person’s name to avoid taxation

If you are found guilty of tax evasion in Boston, Massachusetts you can face hefty fines, prison time, or both.

Income Tax and Fraud

Income tax fraud is the willful attempt to evade or defraud the IRS and Boston tax laws. Tax fraud occurs when an individual or business does any of the following:

  • Prepares and files a false tax return
  • Willfully fails to pay taxes
  • Intentionally fails to file an income tax return
  • Intentionally fails to report income received
  • Makes fraudulent or false claims on the tax return

Under Massachusetts law, it is a felony for a Boston resident to willfully attempt to evade or defeat any state tax. Upon conviction, the guilty party can face up to five years in prison. In addition, the court can impose up to $100,000 in fines, or $500,000 in the case of a corporation.

When Would You Need an Experienced Boston, Massachusetts Tax Law Attorney?

Facing Legal Issues Regarding Taxes

If you’re under investigation from the IRS or planning a lawsuit against, you will need a qualified , Massachusetts attorney who practices tax law. To illustrate, counsel can help collect the information you need and create a viable defense.

When Starting a Business

There’s more to starting a business in , Massachusetts than selling products or services. You also need to determine the business type and structure. This status, in turn, determines how the business and your earnings get taxed. Choosing the wrong business structure can cost you.

Massachusetts tax laws set out the tax rules and regulations involving corporations in Boston and across the state. For example, Massachusetts imposes a Corporate Excise Tax. This tax generally applies to both foreign and domestic businesses operating in the state. S corporations must pay the tax by the 15th day of the third month after the end of the corporation’s taxable year. For C corporations, the tax is due on the 15th day of the fourth month. Currently, the tax applies to businesses that have gross receipts and sales greater than $100,000.

If You Have a Taxable Estate

If your estate is worth more than $11.58 million, or $23.16 million if you’re married, your estate might get taxed up to 40% for surpassing that threshold. No one wants a huge portion of their estate going to the IRS instead of their heirs. This is why wealthy people involve tax lawyers in their estate planning process.

According to the Massachusetts Department of Revenue, a Boston estate worth less than $1 million does not have to pay MA state estate tax. Still, depending on the value of the Boston estate, the Massachusetts estate tax rate can be as high as 16%. As well, a Boston estate could also be subject to federal taxes. Finally, the executor must file and pay the state estate tax within 9 months of the death of the decedent.

Work with an Experienced Tax Law Lawyer In Boston, Massachusetts

Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced , Massachusetts tax law lawyers have the expertise you need. From conducting audits to defending you in court.  We can even help you connect with an attorney across Massachusetts state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!

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