Many partners quietly wonder what the right way to pay themselves is (i.e. draws, salary, or distributions - and what does the IRS expect?). For Maryland law firms the answer depends heavily on your entity type and tax classification. Getting this wrong can lead to unexpected tax bills, penalties, or messy partner disputes. 1. Start with Your Firm’s Entity and Tax Status Before you decide how to pay partners, you must know how your firm is taxed: LLC taxed as a partnership (multi‑member LLC...

If you run a nonprofit in Maryland, May often brings a big question: “We’re tax‑exempt, so do we really need to think about taxes right now?” For many organizations, the answer is yes, especially around federal Form 990 deadlines and Maryland compliance filings that cluster in the spring. Below are a few key issues nonprofit boards and executive directors should keep on their radar each May: 1. Form 990 and “we don’t pay taxes” myths Most tax‑exempt nonprofits must file an annual information...

If you run a law firm in Germantown, Rockville, or anywhere in Montgomery County, you have probably wondered: “Are we handling our firm’s taxes the right way?” This matters more than most attorneys realize. Law firms often deal with partnership income, owner draws, and complex compensation structures, all of which have specific Maryland and federal tax implications. Key Tax Areas Law Firms Must Get Right Entity structure and partner taxation Many Maryland law firms operate as partnerships or...