The Patient Protection and Affordable Care Act provides a tax credit for an eligible small employer (ESE) for non-elective contributions to purchase health insurance for its employees. The term “non-elective contribution” means an employer contribution other than an employer contribution pursuant to a salary reduction arrangement. Click here to download the full newsletter! (PDF)

The 2010 Small Business Jobs Act enacted September 27, 2010 includes an assortment of incentives and tax breaks for small businesses.  The following is a brief overview of some of the key provisions included in the new law.  Watch for additional details in future newsletters. (more…)

Tax law requires businesses to provide information returns, such a 1099s, to each payee that the business has paid $600 or more for the year.  The law also includes penalties for failure to file the same information returns with the IRS.

To ensure compliance with these requirements, there are substantial penalties, and, as part of the recently passed Small Business Jobs Act of 2010, those penalties have been doubled.  The penalties are generally based upon how late the returns are filed with the IRS or provided to the recipient of the income and are broken down into three tiers: (more…)

Planning to make an “energy-saving” improvement to your home?  2010 is the final year to take advantage of the tax credit available so you will need to act quickly as there are only three months left.  Whether you simply want to cut your utility bills or winterize your home, do it soon!

The name “Home Energy Property Credit” given by Congress is not as descriptive as it could have been and is easily confused with other credits.  This credit is for energy-saving improvements to a taxpayer’s principal residence.  The credit is limited to $1,500 (30% of up to $5,000 of qualified expenditures) for improvements made in 2009 and 2010.  So, if you claimed this credit in 2009, the maximum that can be claimed in 2010 is the $1,500 maximum less any amount claimed in 2009.   (more…)

For many years, taxpayers have not been able to deduct as a medical expense on their tax return the cost of unprescribed over-the-counter medications.  However, taxpayers with Flexible Spending Arrangements (FSA), Health Reimbursement Arrangements (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (Archer MSA) could reimburse themselves for the cost of over-the-counter drugs, and, as a result, pay for the medication with tax-deductible dollars. (more…)

AMT is the acronym for Alternative Minimum Tax.  It is a different (alternative), and generally punitive, method of computing income tax when either certain types of income receive preferential tax treatment or there are excessive deductions in certain categories.  Congress originally implemented it to impose a minimum tax on higher-income taxpayers who were avoiding taxes though tax shelters and other legal means.  However, years of inflation without corresponding adjustment to the AMT components have, each successive year, caused an increasing number of taxpayers to be subject to the AMT.  (more…)

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee.  Expenses that can be deducted for the business use of a home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs. (more…)

Beginning for sales made in 2011, payment settlement entities (e.g., merchant card processing companies like American Express, Visa and MasterCard merchant banks) will be required to report each business’s payment transactions to the IRS. 

To facilitate this reporting, the IRS has developed Form 1099-K which will report a merchant’s credit and debit card income for the year and will be issued to the merchant in the early part of the subsequent year just like 1099s for interest, dividends, pensions, etc., are.  Unlike other 1099 forms, the 1099-K will actually break the income down by the month. The first 1099-Ks will be issued in early 2012. (more…)