Maryland LLC Annual Report & Taxes

The following information is provided for educational purposes only and in no way constitutes legal, tax, or financial advice. For legal, tax, or financial advice specific to your business needs, we encourage you to consult with a licensed attorney and/or CPA in your State. The following information is copyright protected. No part of this lesson may be redistributed, copied, modified or adapted without prior written consent of the author. As we mentioned earlier, there are ongoing requirements for your LLC with the State of Maryland. The first of these requirements is called the Annual Report, and the second requirement is filing your LLC’s income taxes. These can be quited complicated and at the end of this Lesson we will recommend that you get help filing these forms. However, we want to give you an overview, so that you have a basic understanding of the requirements. In most states, the purpose of the Annual Report is to keep the State updated with your LLC’s contact information. However, Maryland does things a little bit differently. Their Annual Report is called the Personal Property Tax Return and it is used to tax personal property owned by the LLC. Personal property includes furniture, machinery, equipment, tools, fixtures, inventory, and anything else that is not real property. Real property refers real eState or land. Another way to think of personal property is anything that is not permanently attached to the ground. In order to file your Personal Property Tax Return, you will first list all of your LLC’s personal property and its estimated value. Then you’ll need to list your LLC’s gross sales, as well as a balance sheet that shows your LLC’s assets and liabilities. Once finalized, you will mail your Personal Property Tax Return to the State along with the Filing Fee. The Filing Fee and your Personal Property Tax Return must be filed every year by April 15th. You may also be charged an additional tax depending on the value of your LLC’s personal property. If your LLC owes additional tax, the county will mail you a bill shortly after April 15th and tell you when this additional payment is due. Below this video, you will find the Filing Fee amount and the accepted forms of payment. If you don’t file your Personal Property Tax Return before the April 15th deadline, the State will eventually dissolve (aka shut down) your LLC. The State takes this requirement seriously, so it’s important that you file your Personal Property Tax Return on time every year. the State will mail you a notice each February reminding you to file by the April 15th deadline. However, we recommend that you keep a repeating reminder on your calendar in case you don’t receive the State’s reminder notice. We know that this information not only sounds confusing, but also sounds like a lot of work. The truth is – it is a lot of work. Determining your personal property depreciable value, commercial inventory, depreciation rates, total gross sales, and creating the balance sheet can be very challenging and complicated. Furthermore, if you make any mistakes, that can create financial issues for you and your business. For this, reason we recommend you hire a tax professional to take care of this for you every year. This segues nicely to the next part of this Lesson. Besides owing tax on your personal property, you are also required to file State income taxes every year. Even if your LLC has no income or you have no business activity, you are still required to file this additional return each year. Again, calculating your tax obligations in Maryland – especially if you have employees – can be complicated and if done improperly, can negatively impact your LLC. Taxes can be challenging and we recommend you can help from a tax professional once your LLC is formed. Hiring a tax professional will not only help you keep your LLC in compliance with the State, but will also give you an advisor to go to for other business questions. Whether your business turns a profit or loses money, you will still need to file tax documents every year. This is not something to be taken lightly. If you want to run a serious business and not get in trouble with the State, you should get assistance in filing your taxes properly. How to Find a CPA or Accountant. A referral from a friend or someone else you trust is usually the best way to find someone to do your taxes. You can also ask co-workers, acquaintances from local clubs organizations, your neighbors, and other business people. You could also ask your Twitter, Facebook, LinkedIn, and other social media friends and maybe find a trusted name from a friend of a friend. It’s as easy as typing in your social media accounts “Hey, I just formed an LLC. Does anyone know a good accountant?” If you can’t get a personal referral, then try doing a search online for “accountant” or “certified public accountant” on Yelp.com or Google.com and looking for someone with a strong track record. You should want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. It’s okay to take your time to find the right person. We recommend talking with at least 2-3 people before making your final decision We hope you find a great tax professional. And that concludes this Lesson.