Don't miss out! There are many tax-saving opportunities available:
1. Faster write-offs on certain capital expenditures:
Many small businesses that invest in new property and equipment can deduct most or all of these purchases on their 2011 returns. Normally, businesses recover capital investments through annual depreciation deductions spread over several years. But many small businesses can get these deductions sooner during 2011.
2. Small Business Health Care tax credit:
This credit, specifically intended for those who employ low- and moderate-income workers, aims to help small employers provide health insurance coverage to their employees for the first time or maintain coverage. Millions of small employers received postcards from the IRS beginning in April 2010 that alerted them to the new small business health care tax credit and encouraged them to check their eligibility. Even if you didn't receive a postcard, your business still may be eligible.
• Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
• Average annual wage. A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify.
Maximum Amount: The credit is worth up to 35 percent of a small business' premium costs in 2010 (25% for tax-exempt employers). On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out: The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
For more information, give our tax team a call at 713.968.1600.