Baltimore Tax Attorneys can Assist with Compensation Tax Traps

Many employees offer incentives and compensation that helps to lure employees. Not only does it get them in the door, it can keep them as part of the business for a very long time. Yet there are some tax traps and misinterpretations from such forms of compensation that can result in tax errors. Not only for individuals but also for the corporations that offer them to CEOs and other employees.
Tax attorneys specialize in these types of concerns, and they can help you to avoid such tax traps. They can ensure everything is set up the way that the IRS intended for it to be. Then you aren’t going to end up in any trouble with the IRS should they examine what you have been claiming.
One of the biggest tax law traps that falls into this category has to do with employees being able to acquire shares in the company through public common stock. This should be reported with the Securities and Exchange Commission forms. That is to ensure that the number of shares offered in such a compensation plan doesn’t exceed what is permitted through the terms and conditions that shareholders have agreed to abide by.
Tax attorneys can make sure such compensation is legitimate both in terms of what the business policies are and what the IRS policies are. Too many people don’t realize they aren’t one and the same. You can be in compliance with one side of the equation, but not the other. Not only can that be embarrassing when discovered, it can cost you money and get you into trouble with the IRS or your business.
Is a stock option a deduction that can be used on your tax return? How is such compensation reported on a business tax return? Don’t worry if you don’t know, most people don’t! That is where the expertise of tax attorneys is needed. They are well aware of these laws and they know exactly how to apply them to your set of circumstances.
They can also make recommendations to you personally or for the business to maximize the options available through such forms of compensation. This is all done legally, and by you cooperating with what tax attorneys they ask, you can reduce your tax liability. If you don’t know those options exist, you are going to continue paying more than you should.
According to reports from the IRS, many businesses are still not using compensation correctly for their employees. The IRS continues to be stricter too when violations of such regulations are identified. Now is the time to walk with a tax attorney to make sure everything is correct. If not, they can assist with getting the problems resolved.
It is certainly better to do so than to wait for the IRS to reach out to you. Should you be contacted by the IRS about such compensation tax traps, you need to get busy finding a great attorney. Find one that specializes in taxes so that you don’t end up in a never ending mess of red tape and controversy.