by Bridget Van Landingham
The holiday season is over, we have prepared all the necessary year end forms & now our minds turn to Tax Season. As small business owners this task, among all the others, can seem a bit much. Here are 5 tips to help in preparation for this year’s Tax Season & many more.
- Don’t mix business with pleasure – We have all heard that before. When it comes to your business finances that is very true. Personal expenses that you claim as a business expense are analyzed by the IRS and can create more issues than you think. Co-mingling your business & personal funds pierce the corporate vail. Which can mean that business audit now includes your personal records as well. You should always maintain separate bank accounts and credit cards for your business.
- Record keeping is key – Proper record keeping can reduce your bill from your CPA as well as ensure your taxes are filed correctly & to your best benefit. Keep track of receipts for deductions as these are also needed in times of Audits.
- Don’t make mistakes that could really cost you…an audit, to be seen as non-compliance or even penalties and back taxes. – Be sure you are classifying your Employees & Independent Contractors correctly, there is a big difference in the eyes of the IRS. If you have a home based business be sure you qualify & that you know which deductions you can & can’t take.
- Get your credits – Be sure you are taking advantage of all tax credits available to you. From the Small Business Jobs Act to the Affordable Care Act there are still some small business tax credits to utilize. For example, the Affordable Care Act allows for tax credits to help small businesses cover some of their cost in health care. For 2014 the tax credit increased to 50%.
- Provide & update – If your tax professional sends you a tax organizer we recommend you fill it out & send it back. This allows your tax professional to be sure they have all the right answers. Schedule a tax planning meeting to discuss not only your current filing year situation, but plans for the future such as succession planning.
We of course recommend you work with a tax professional for the best results, but these are things you as a small business owner can do or should know. We wish you happy prepping & us a happy tax season. If you have any questions or would like to speak to one of our tax professionals please feel free to contact us, we are here to help.
For additional information, tax tips and current year tax deductions visit:
http://www.irs.gov/uac/Tax-Changes-for-Small-Businesses or
https://www.sba.gov/tools/search-result-page?cx=012149749304426494285%3Avl4bn0plkpq&cof=FORID%3A11&ie=UTF-8&Q=tax%20credits%20for%202014&btnG=Search
by Bridget Van Landingham
As the end of the calendar year rapidly comes to a close, two things loom in the minds of people across the country: holiday plans and tax season! Tax preparation and planning should be well under way for both individuals and businesses. If not, you had better put that at the top of your list of things to start immediately!
As always, a new tax season means new and amended tax laws to consider. A major component of tax law this year is the Affordable Care Act (ACA) and its many aspects. Everyone should read up on the new provisions and how they may affect their personal or professional tax returns. In an effort to keep the small business community in St. Augustine, FL mindful of some of the key rules and regulations that may affect their businesses, we have listed a few main points of the ACA.
- Employer shared responsibility: the “employer mandate”: This mandate, which is also referred to as the “Pay or Play” regulations apply to employers’ group health plans. This will be effective in 2015 for applicable large employers (ALE) with an average of at least 100 full time or full time equivalent employees. Midsized employers (at least 50 but less than 100 full time and full time equivalent employees) will see this go into effect in 2016. This provision requires ALE’s to pay a penalty if they fail to offer affordable, minimum value health coverage to all of its full time employees and their dependents. We encourage all businesses to speak with their tax professionals to calculate what their total full time and full time equivalent employee count is based on 2014 data.
- Code sec. 45R Credit: For our qualified small businesses that have fewer than 25 full time equivalent employees with average wages of less than $50,800 (for 2014), this tax credit may be taken to help offset the cost of health insurance offered to employees. Another qualification is that the employer must pay at least half of the cost of single coverage for their employees. Effective for tax year 2014, a credit of up to 50% of premiums paid for qualified small-business employers and up to 35% for small tax-exempt employers. Please check with us or your tax professional for accurate employee count calculations and whether your business qualifies for this credit.
- Self-insured individuals: Be aware that you may be required to pay a fee to help fund the Patient-Centered Outcomes Research Trust Fund.
- Additional Medicare Tax: Another ACA mandate increases the employee share of Medicare tax by 0.9% on wages or compensation that exceed $200,000 (for single taxpayers), $250,000 (for married joint filing taxpayers). This is also the case with self-employment income.
- W2 Filing: You may be required to report the value of health insurance coverage provided to your employees on their W-2 form at year end.
As always, you should check with us or your tax professional for all your tax-related questions and concerns. Other sources of information can be found at www.irs.gov and www.healthcare.gov.
Accountingtoday.com,” Year-End Planning: Affordable Care Act Considerations”, George G. Jones and Mark A. Luscome
http://www.irs.gov/Affordable-Care-Act/Employers/Affordable-Care-Act-Tax-Provisions-for-Small-Employers