Tax Attorney Pennsylvania

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Tax Law Firm in Pennsylvania

A Brief Overview of Pennsylvania Tax Laws

A tax is a mandatory financial charge levied by taxing authorities to fund various state and municipal services. Taxes are collected at different levels, such as county, state, and federal. Tax revenues generated in a state or a county are used to pay for public schools, roads, courts, and other essential things. Not paying taxes on time can have negative consequences. 

Every resident living in Pennsylvania must be familiar with the basic tax laws followed in the state. If you are moving to Pennsylvania from another state, it is even more important for you to understand these laws. Here, we provide a brief overview of tax laws followed in Pennsylvania. All citizens and businesses of Pennsylvania must pay taxes on time to comply with state guidelines and avoid penalities. 

Who Should Pay and Who Should Not?

Pennsylvania levies a personal income tax on individuals, estates, and trusts within the state. Each entity is required to pay a percentage on all taxable income. The tax rate is subject to change from year to year. It is helpful to remain cognizant of the current tax rate so that you are able to manage your finances appropriately.

The percentage of taxable income may vary depending on other factors as well. You can read more details at the Pennsylvania Department of Revenue’s website. The following eight classes of income are taxed in the state: 

  • Compensation
  • Interest 
  • Dividends
  • Net profits from the operation of a business, profession or farm
  • Net gains or income from the dispositions of property
  • Net gains or income from rents, royalties, patents and copyright
  • Income derived through estates or trusts
  • Gambling and lottery winnings

Pennsylvania offers exemptions for income generated from Social Security benefits and other retirement accounts. You can contact a tax expert for more information about tax laws and other criteria. An attorney with tax law experience can discuss your tax situation and help you develop strategies to reduce your overall tax burden and manage what you may owe. Taxpayers are required to file returns within a specified time. The following people must file a personal income tax return in Pennsylvania unless they have a legal exemption. 

  • Residents
  • Part-year residents
  • Non-resident individuals

Those who wish to learn more about Pennsylvania tax laws before filing their returns can consult with experts at specialized law firms. Accountants work with individuals on both personal and business taxes while attorneys mainly deal with commercial transactions. Tax lawyers may also represent individuals in disputes against the IRS or other tax authorities when they are accused of violating regulations. Either way, a tax attorney can provide the basics of Pennsylvania tax law that one must be aware of before proceeding. 

Once you have filed your tax return, it may take several weeks to receive a refund of any tax withholding. If you owe additional taxes, you will need to pay them by a certain date or face interest charges and fees. Additionally, the IRS may charge late payment penalties if you withhold payments from your paycheck but fail to submit them on time.

Pennsylvania residents should be aware of their rights and responsibilities regarding tax laws to avoid legal problems. However, for those who have questions about Pennsylvania tax law, it is best to consult with legal professionals.

You can take guidance from a Pennsylvania tax attorney to understand more about business taxes. How your business will be taxed will depend on the type of firm you operate. For example, taxes may be different for S Corporations and LLCs than for other types of business entities. 

The following six states have no income tax: 

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

Despite facing some challenges, states that do not require an income tax seem able to have found a balance between low taxes, affordability, and providing effective government services. Oftentimes, the lack of income tax revenue is made up through higher taxes for other entities, such as corporate taxes.

Understanding multi-state businesses tax is essential 

Pennsylvania corporate tax is a separate and additional tax imposed on the net income of every corporation doing business within Pennsylvania. In addition to your company’s federal-level corporate taxes, as well as the taxes you pay to the state where your company was incorporated, you will probably have to calculate and pay a special annual tax for being located in Pennsylvania.

The amount of tax you owe depends on several factors including net income earned from all sources within and without the state and total capital employed within Pennsylvania. If your after-tax profits are large enough, this additional corporate tax may be substantial, which can make deciding to do business in Pennsylvania even more complicated.

All states levy taxes on businesses for conducting operations or just owning land in the state. The tax laws for a business may change if they are operating in more than one state. In that case, the business may be considered to have a nexus with another state. If a business has a branch or is operating in other states, it may be required to pay taxes in other states as well. A company looking to conduct business in Pennsylvania should keep this in mind. An attorney can assist you with determining which states your business will have to pay taxes in. 

There are several other guidelines that a business must fulfill to operate in multiple states. If your company has a registered branch or operates in Pennsylvania, you will most likely be obligated to pay taxes in Pennsylvania. You can obtain the assistance of a reputable Pennsylvania tax law firm to assist you on all tax-related matters. 

Businesses generally pay some amount of tax in all the states they are operating. At times, it can be challenging to evaluate the taxes for multistate corporations. This is one reason why it is often recommended to consult a professional for guidance. 

What is prohibited in this process?

Certain things are prohibited with regard to taxes. Below is the list of common areas where people find themselves in trouble: 

  • Purposefully failing to file taxes or returns 
  • Filing an incorrect document 
  • Intentionally evading taxes
  • Intentional or fraudulently conveying misleading information 
  • Failing to provide information timely 

An individual or a business trying to tamper with official documents or not paying taxes may even face criminal charges. In addition to paying hefty fines, they could end up in jail. Therefore, it is important to consult a professional who can assist with this. 

Consult a reputable Pennsylvania tax lawyer for assistance in filing taxes and returns. Our legal tax professionals understand the law in and out. We will ensure that the paperwork is complete and you remain compliant with state tax laws. 


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