http://www.irs.gov/irs/article/0,,id=223909,00.html
The Internal Revenue Service encourages small businesses to take advantage of tax-saving opportunities included in recently enacted federal legislation. A variety of business tax deductions and credits were created, extended and expanded by the American Recovery and Reinvestment Act of 2009 (ARRA), this year’s Hiring Incentives to Restore Employment (HIRE) Act and the Affordable Care Act. Because some of these changes are only available this year, eligible businesses only have a few months to take action and save on their taxes. See the full article for a rundown of some of the key provisions.
IRS Offers Details on New Small Business Health Care Tax Credit http://www.irs.gov/newsroom/article/0,,id=223577,00.html
The Internal Revenue Service today issued new guidance to make it easier for small businesses to determine whether they are eligible for the new health care tax credit under the Affordable Care Act and how large a credit they will receive. The guidance makes clear that small businesses receiving state health care tax credits may still qualify for the full federal tax credit. Additionally, the guidance allows small businesses to receive the credit not only for regular health insurance but also for add-on dental and vision coverage.
Notice 2010-44 provides detailed guidelines, illustrated by more than a dozen examples, to help small employers determine whether they qualify for the credit and estimate the amount of the credit. The notice also requests public comment on issues that should be addressed in future guidance.
Included in the Affordable Care Act approved by Congress in March and signed into law by the President, the small business health care tax credit, which is in effect this year, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.
More information about the credit, including a step-by-step guide and answers to frequently asked questions, is available on the Affordable Care Act page.
Form to Claim Payroll Tax Exemption for Hiring New Workers Now Available
http://www.irs.gov/newsroom/article/0,,id=223606,00.html
The Internal Revenue Service has issued the newly revised payroll tax form that most eligible employers can use to claim the special payroll tax exemption that applies to many new workers hired during 2010. Designed to encourage employers to hire and retain new workers, the payroll tax exemption and the related new hire retention credit were created by the Hiring Incentives to Restore Employment (HIRE) Act signed by President Obama on March 18. Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of Social Security tax on wages paid to these workers after March 18. This reduction will have no effect on the employee’s future Social Security benefits. The employee’s 6.2 percent share of Social Security tax and the employer and employee’s shares of Medicare tax still apply to all wages.
In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return. Further details on both the tax credit and the payroll tax exemption can be found in a recently-expanded list of answers to frequently-asked questions about the new law now. Form 941, Employer’s QUARTERLY Federal Tax Return, revised for use beginning with the second calendar quarter of 2010, will be filed by most employers claiming the payroll tax exemption for wages paid to qualified employees. The HIRE Act does not allow employers to claim the exemption for wages paid in the first quarter but provides for a credit in the second quarter. The instructions for the new Form 941 explain how this credit for wages paid from March 19 through March 31 can be claimed on the second quarter return.
IRS Accepting Applications for Low Income Taxpayer Clinic Grants
http://www.irs.gov/newsroom/article/0,,id=224069,00.html
The Internal Revenue Service has announced the opening of the 2011 Low Income Taxpayer Clinic (LITC) grant application process. Applications must be submitted no later than July 16, 2010. The LITC grant program is a federal program administered by the Office of the Taxpayer Advocate at the IRS. The LITC program serves individuals who have problems with the IRS and whose incomes do not exceed 250 percent of the Federal Poverty Guidelines. The LITC program also provides outreach and education to taxpayers who speak English as a second language (ESL). LITCs are independent from the IRS. Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes and other issues for free or for a nominal fee. Many clinics provide multilingual information about taxpayer rights and responsibilities. Under the LITC grant program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain low income taxpayer clinics.
Recent Articles from e-News for Small Businesses
Income from fishing
The Fishing Tax Center provides links to the most common topics in the fishing industry including recordkeeping guidelines for fishermen.
Applying for an EIN requires identification of responsible party
All applications for an Employer Identification Number must clearly identify the applicant’s true owner.
New Headliner Volume 297 provides a detailed explanation of who is considered a responsible party when applying for an EIN.
Should you be making estimated tax payments?
Taxpayers with income that is not subject to withholding may have to make estimated tax payments four times a year.
You generally have to make estimated tax payments if you expect to owe tax, including self-employment tax, of $1,000 or more when you file your return.
Therapeutic Discovery Project Program
This new program created by the Affordable Care Act will provide tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies, support jobs and increase U.S. competitiveness. Companies may submit applications for certification June 21-July 21.
Related links:
IRC Section 179 increase extended
A qualifying taxpayer can choose to treat the cost of certain property as an expense instead of depreciating it over several years.
Recent legislation extends the dates for expensing depreciable business assets.
IR-2010-65 Interest Rates Remain the Same for the Third Quarter of 2010
Tax relief in disaster situations
With the severe storms and flooding this spring some victims may qualify for tax relief that includes postponed filing dates and penalty waivers.
Good planning can help small businesses recover from a disaster
Audio presentations offer tips to stay in business after a major disaster:
- Continuity Planning and Other Tips to Stay in Business after a Major Disaster
- Insurance Coverage and Other Emergency Planning Tips to Help Your Business Survive a Major Disaster
- Recordkeeping and Reconstructing Business Records to Help Your Business Survive a Major Disaster
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