2014 Maryland Business Tax Return Changes
If your business’s fiscal year corresponds to the calendar year, this means it’s the tax season for you! In Maryland, business tax returns will be processed starting January 9 and you have until April 15th to file your paperwork. Unfortunately, business taxes is one of those tedious tasks that tend to evolve just when you think you’ve mastered the process. Legislation changes happen constantly on both federal and state levels, and our Maryland tax experts are here today to talk about what’s new in Maryland business tax filing.
Electronic filing has been a common practice for a while because it’s fast, convenient and usually leads to quicker processing. However, there are other reasons to switch to electronic filing if you’ve been using the paper format. The 2013 tax year was the first year when the paper version of the form 500CR Business Income Tax Credits was discontinued. You could have gotten away with paper filing last year if you didn’t have any credits to claim, but if this year you do, then be sure to use an approved eFiling system.
New Tax Credits
Speaking of tax credits, there are two new credits you could claim on your Maryland tax forms for 2014:
- Qualified Vehicle (Class F Tractor) Tax Credit will reimburse your registration fees for every tractor trailer you use for your business. There is a cap of $400 or the amount of your state income tax, whichever is lesser.
- Cybersecurity Investment Incentive Tax Credit is meant to incentivize the growth of cybersecurity companies in Maryland. If you are a young Maryland company specializing in cybersecurity and you were able to obtain at least $100,000 in aggregate capitalization, you might be eligible to receive a credit in the amount of 33% of the investment.
If you want to take advantage of the cybersecurity credit, you need to act fast, because your company has to be certified by DBED before it can qualify for the credit.
The Electric Vehicle Recharging Equipment Tax Credit expired July 1, 2014. If you have any recharging equipment you want to get credit for, make sure it was purchased prior to that date. In addition to the state credits, Congress has recently renewed a big portion of tax breaks that expired in early 2014, so you are still able to claim them on your tax return.
These are just some of the more significant changes that may affect your Maryland tax return filing for the 2014 tax year. Depending on the structure of your business and your industry, you might have additional challenges or opportunities in terms of getting the most out of your tax refund. It’s not a secret that Maryland is one of the states with the highest marginal tax rates for S corporations and sole proprietorship businesses. If your business is considered a pass-through entity and your business income is taxed at your personal tax rate, we recommend partnering up with a qualified Maryland accounting firm to maximize your savings and deductions.
Get in touch with The CFO Source today if you need help with business tax preparation.