Resolving Your Tax Obligations with the Massachusetts Department of Revenue
Business Tax Obligations
Did you know that the Massachusetts Department of Revenue has a web-based application that makes it easier for business owners to file and pay taxes? To sign up for the MassTaxConnect, one needs to produce the following documents and information:
- Your legal name
- The Social Security Number (that is if the business owner has no employees and is the sole proprietor) – a sole proprietor has the option of registering with either an Employer Identification number or a Social Security Number
- The Employer Identification Number (EIN). Any owner who lacks the EIN should apply for one with the IRS.
- The starting date of the business
- And the business mailing address
In the case of a corporation, the following information should be provided as well:
- The business officer(s)’s contact information, including the social security number(s) and title(s)
A Non-Profit Organization will need:
- An IRS Determination Letter that recognizes the organization as a 501(C)(3). The IRS will give you a copy of the said letter if you don’t have one.
How to register your business with the MassTaxConnect
You can register the business online by visiting MassTaxConnect. Once you’re done with the registration, an email will be sent to you immediately, confirming the registration request has been received. Upon approval, a second email will be sent to you just to let you know that you can now access the application. Also, this email will have an authentication code and a link connecting you directly to MassTaxConnect.
For more information, select the MassTaxConnect’s Frequently Asked Questions and look under Registration.
Employer Tax Obligations
To begin with, you first have to fully understand who an employer is as defined by the IRS. According to the IRS, an employer can be a person, a corporation, or an organization that hires individuals to perform some service as skilled workers or employees.
A Massachusetts employer’s responsibilities include:
- Ensuring that the business is registered with the Massachusetts Revenue Department so as to withhold the employees’ wages income taxes. You may learn more about the type of taxes that you’re supposed to register for by visiting the Business Taxes.
- Asking every employee to hand in a completed federal form W-4, which is the Employee Withholding Allowance Certificate.
- If required, ask the employees to hand in a completed Massachusetts Employee’s Withholding Exemption Certificate, also known as Form M-4. An M-4 is only important when one of your employees feels the need to claim a different withholding exemption number.
- Withholding child support payments and/or tax from the employees’ paychecks or independent contractors, and forwarding those finances to the Revenue Department, if ordered to do so by a court or the Revenue Department.
- Making sure that they file the quarterly reports of wages that have been paid to every employee who lives or is employed in Massachusetts.
- Ensuring all the employees have a wage, Tax Statement, and Form W-2 by the 31st of January, or within 30 days in a case where the employment gets terminated before the year ends. The W-2 form has to indicate: the sum of all wages paid, the total Medicare taxes withheld and Social Security, the total amount of Massachusetts and federal income tax withheld for the prior year, and file copies of the Massachusetts Department of Revenue’s W-2 forms, if required. The information obtained from the W-2 has to be filed with the Social Security Administration.
- Fulfilling the state employment security tax obligations and registering with the Massachusetts Unemployment Department.
- Ensuring all the employees in your organization have the workers’ compensation insurance before they start working for you.
Furthermore, learn more about an employer’s obligations for withholding Medicare taxes, Social Security and Federal income, contact the Internal Revenue Service.
Taxpayer’s Advocate Office
The primary objective of the advocate’s office is to identify and even propose a resolve or changes to be made to tackle systemic issues that burden or create problems for taxpayers. If appropriate, the taxpayer’s advocate will recommend legislative or administrative changes to mitigate or resolve said problems.
The taxpayers’ objectives include:
- To ensure a fair and consistent Massachusetts tax law application and DOR policies
- To propose solutions and that includes administrative changes to DOR practices or procedures
- Take on the advisory role when dealing with the executive management on issues regarding systemic problems
- To preserve and also promote the taxpayers’ rights
- Recommend legislative remedies to address various issues when appropriate
- Try to foster open and honest communications
Furthermore, the Taxpayer’s advocate office cannot act as a substitute for, or replace established procedures, such as:
- Assist with local tax issues
- Give taxpayers legal advice
- Represent them in various dealings involving the Department of Revenue
- Bypass Massachusetts statues or regulations
- Change the statutory time limits for filing
- Or assist you with issues involving government departments
Contact Ash CPA to learn about your unique tax obligations. In fact, we have over 20 years of experience and offer complimentary consultations. Call (617) 462-6651 or book an appointment online.