Tag Archives: Moore

Your Business: The Small Business Healthcare Tax Credit

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By David L. Moore

As the upcoming filing extension tax deadlines approach, the Internal Revenue Service, in partnership with the Department of Health and Human Services, is announcing a new round of outreach to small employers and the professional service providers they rely on to encourage them to review the new Small Business Health Care Tax Credit to see if they are eligible.

The small business health care tax credit was included in the Affordable Care Act enacted last year. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with an average income of $50,000 or less.

Small employers face two important tax filing deadlines in coming weeks:

  • September 15. Corporations that file on a calendar year basis and requested an extension to file to September 15 can calculate the small employer health care credit on Form 8941 and claim it as part of the general business credit on Form 3800, which they would include with their corporate income tax return.
  • October 17. Sole proprietors who file Form 1040 and partners and S-corporation shareholders who report their income on Form 1040 and request an extension have until October 17 to complete their returns.

In addition, tax-exempt organizations that file on a calendar year basis and requested an extension to file to November 15 can use Form 8941 and then claim the credit on Form 990-T, Line 44f, a task with which our office can assist you!

As these 2010 deadlines approach and businesses begin planning for the end of 2011 and 2012, the IRS’s new outreach campaign is focusing on working with us, the small business and tax practitioner community, to provide this information to you. Information will also be available through social media and other venues, including IRS YouTube videos in English, Spanish and American Sign Language.

We want to remind employers about the upcoming extension deadlines and will also provide details on other important information about the credit, including:

  • Businesses who have already filed can still claim the credit: For small businesses that have already filed and later determine they are eligible for the credit, they can always file an amended 2010 tax return. Corporations use Form 1120X and individual sole proprietors use Form 1040X.
  • Businesses without tax liability this year can still benefit: The Small Business Jobs Act of 2010 provided that for Tax Year 2010, eligible small businesses may carry back unused general business credits (including the small employer health care tax credit) five years. Previously these credits could only be carried back one year. Small businesses that did not have tax liability to offset in 2010 should still evaluate eligibility for the small business health care tax credit in light of this expanded carry back opportunity.
  • Businesses that couldn’t use the credit in 2010 can claim it in future years: Some businesses that already locked into health insurance plan structures and contributions for 2010 may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010. So these businesses may be eligible to claim the credit on 2011 returns or in years beyond. Small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

In addition to this month’s newsletter, please do not hesitate to call our office for any assistance, help, or other inquiries about your personal and business situation! We look forward to hearing from you!

This information courtesy of David L. Moore CPA, LLC, at 351 S. Cypress Road, Suite 404 C, Pompano Beach, Florida 33060.  For more info, give their office a call at (954) 933-7314 or visit their website at www.davidmoorecpa.com.

IRS Takes the Unusual Step of Raising Mileage Rates Mid-Year

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By David L. Moore, CPA

On June 23rd, the IRS announced that it will raise the optional standard mileage rates for the final six months of 2011. From July 1, 2011 to December 31, 2011, taxpayers can deduct 55.5 cents per mile for business miles, and 23.5 cents per mile for medical and moving expenses. These rates are up from fifty-one cents and nineteen cents respectively, while the per-mile deduction for charitable expenses remains fixed at fourteen cents.

On June 23rd, the IRS announced that it will raise the optional standard mileage rates for the final six months of 2011. From July 1, 2011 to December 31, 2011, taxpayers can deduct 55.5 cents per mile for business miles, and 23.5 cents per mile for medical and moving expenses. These rates are up from fifty-one cents and nineteen cents respectively, while the per-mile deduction for charitable expenses remains fixed at fourteen cents.

If you use your vehicle for business-related purposes, and you do not want to keep track of every vehicle-related expense, like your gas, oil, and tires, you can use an IRS shortcut and deduct a standard amount per mile. Most taxpayers qualify for the standard mileage rate, but there are some exceptions. Also, you should keep in mind that the standard mileage rate does not excuse you from keeping detailed records. Should you decide to use the standard deduction, although you do not need to keep records of your expenses, you do need to record the date, destination, names and relationships of business parties, and mileage driven for each business trip.

It is not typical for the IRS to change the per-mile deductions in the middle of the year. Normally the IRS sets the standard deductible rate for the year, and it is not adjusted. “This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the increase in gas prices,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

This information courtesy of David L. Moore CPA, LLC, at 351 S. Cypress Road, Suite 404 C, Pompano Beach, Florida 33060.  For more info, give their office a call at (954) 933-7314 or visit their website at: www.davidmoorecpa.com.