BLOG FEATURED ARTICLES HOT PRODUCTS IDEA EXCHANGE LEGAL DEPARTMENT MONEY & TAXES ONLINE BUSINESS SALES & MARKETING TRADE SHOW NEWS WORK AT HOME |
UPDATED TAX LAWS YOU NEED TO KNOW AT YEAR-END |
2010 is another year of confusing and complex Federal tax laws. For example, the HIRE act created major new benefits for new hires, there are new tax credits as well as expiring ones, and tax rates are frequently changing. With the new health care legislation as well as new and expired tax changes, understanding the latest in tax code changes will significantly impact the bottom line for many small business. Unless there is new legislation soon, 2010 is the last chance to utilize several major tax provisions. Perhaps the most significant is section 179 of the tax code. This section allows a business to deduct all of the cost of new business property, up to a limit. For 2010, this limit is $250,000. Unless it changes, the limit for 2011 will shrink dramatically to $25,000. If your business suffered a loss in 2010, as many businesses did, you are now more limited when deducting this loss from prior tax returns. Now this loss is only deductible from the previous two years’ tax returns, not three to five as allowed in prior years. On the other hand, if your business has been profitable, 2010 may be the last chance to capture the current tax rates on capital gains and dividends. Capital gain rates will rise dramatically next year, and dividends will no longer be taxed as capital gains; instead, they will be taxed as ordinary income. Two new tax breaks are available in 2010 that will impact many small businesses. First, a business may be exempt from paying their share of the social security tax on new hires. This is a hefty 6.5% tax break for an expanding small business. In addition, a $1000 tax credit is available for new hires, provided they stay employed for at least a year. Numerous other small adjustments have occurred as well. For example, the mileage rate for business driving is reduced from $0.55 to $.0.50. These changes are constant, as congress passes new legislation. Some of the expired credits may still get extended, and additional credits passed. Tracking all these changes is a challenge beyond the scope for most small business owners. Small business owner’s time is best spent on their business, managing their operations and employees. Using qualified professionals for tax preparation is critical for successful small businesses. For many tax matters, a skilled tax accountant will help the business owner identify many potential tax savings. On the other hand, some of the most complicated tax changes are personnel and payroll based. Using a qualified payroll company will help a business capture these tax major breaks. The new HIRE legislation has very specific requirements for new hires. By properly hiring an employee by the HIRE acts requirements, a business would gain $2,950 in tax savings and credits for a single employee making $30,000. A good payroll company will help make sure the business captures these savings, as well as dealing with the complicated payroll matters and changing IRS rules and regulations, thus helping to keep your business compliant with these changes. Check in with Retailers Forum Magazine every month for information for your business in addition to wholesale merchandise suppliers. |