What Self-Employed Individuals Should Do with their Tax Debt in Baltimore?

The current sales tax rate in Baltimore, Maryland, is consistently set at 6%. This rate is a statewide sales tax, meaning it applies uniformly throughout the state, including Baltimore. Maryland does not allow additional local sales taxes, so the total sales tax rate remains at 6% across all jurisdictions, including Baltimore. This rate applies to most goods and some services purchased within the state.

The self-employment tax rate in the United States, including the state of Maryland, is 15.3%. This rate is the same nationwide as it consists of two parts: 12.4% for Social Security and 2.9% for Medicare. This tax applies to the net earnings of self-employed individuals and is equivalent to the combined employer and employee contribution rates for Social Security and Medicare in traditional employment settings. Maryland does not impose an additional state self-employment tax. Thus, self-employed individuals in Maryland are subject to the federal rate of 15.3% only.

At J. David Tax Law, we pride ourselves on being among the best when it comes to resolving tax debt issues in Baltimore. Our tax attorney specializes in a range of tax-related legal services, including negotiating with the IRS, setting up payment plans, and providing defense in cases of tax liens and levies. We are equipped with the right skillset to provide top-notch legal representation to help you navigate and resolve your income tax debts effectively. Contact us today to get a trusted partner in your tax debt relief journey.

If you don’t pay taxes in Baltimore, Maryland, or any jurisdiction within the U.S., you could face a variety of penalties and legal consequences, depending on the type and amount of taxes owed. Here’s what could happen:
– Penalties and Interest: The Internal Revenue Service (IRS) will assess penalties and interest on taxes that are not paid by the due date. The penalty for failing to file is typically 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%. Additionally, the penalty for failing to pay taxes you owe is 0.5% of your unpaid taxes for each month or part of a month after the due date, up to 25%. Interest is also charged on unpaid taxes and penalties.
– Liens and Levies: If taxes remain unpaid, the IRS may place a tax lien against your property. A federal tax lien gives the IRS a legal claim to your property as security or payment for your tax debt. If the debt continues to go unpaid, the IRS can levy, meaning they can seize and sell any type of real or personal property that you own or have an interest in.
– Garnishment: The IRS can garnish wages, which means a portion of your wages will be sent directly to the IRS by your employer to cover your tax debt until it is fully paid.
Refund Withholding: If you are due a tax refund in future years, the IRS can withhold the refund and apply it against any taxes you owe.
– Impact on Credit Score: Tax liens, like any other lien, can be reported to the credit bureaus and may negatively impact your credit score.
In more severe cases, especially where tax evasion is suspected, the IRS may pursue criminal charges which can lead to hefty fines and even imprisonment. It’s important to address tax issues promptly and consider consulting with a tax attorney if you find yourself unable to pay taxes.