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Top Tax Tips for Businesses

Obamacare Reporting, Don’t Get Penalized!

  • The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, in Box 12, using Code DD.  This reporting is for informational purposes only, to show employees the value of their health care benefits. The value of the employer contribution to health coverage continues to be excludible from an employee’s income, and it is not taxable.

$500,000 Section 179 Deduction!

  • While Congress increased the Section 179 limit to cover up to $500,000 of business equipment purchases and reinstated 50% Bonus Depreciation through December 31, 2014, as of January 1, 2015, the maximum Section 179 has reverted back to its pre-extended $25,000 amount and no bonus depreciation is available.

Write-Off Your Vehicle!

  • Even though you elect to use the standard mileage rate to deduct the business costs of your vehicle, you may still be entitled to deduct the following expenses as they are not included in the standard rate:
    • Interest on a car loan
    • Parking fees and tolls for business trips (but not parking ticket fines or the cost of parking your car at your regular place of work), and
    • Personal property tax that you paid when you bought the vehicle that is based on its value (often included as part of your auto registration fee)

Beware of the Home Office Deduction!

  • If you claim the home office deduction for your business, you may be subject to depreciation recapture should you sell your home in the future, even if you would otherwise be entitled to the primary residence gain exclusion.

Elimination of Updated NYS LS Labor Forms!

  • On December 29, 2014, Governor Andrew M. Cuomo signed a bill, effective immediately, eliminating the requirement that before February 1 of each year, employers notify and receive written acknowledgement from every worker about their rate of pay, allowances, payday, etc. Accordingly, the New York State Department of Labor will not require annual statements in 2015. Businesses are still required to notify employees as required at the time of hire.

Pay Your Spouse’s Fringe Benefits!

  • As a business owner, if you hire your spouse, then as his or her employer you can pay for the healthcare of his or her (your) family and deduct those payments as fringe benefits.

Health Care Tax Credit Helps!

  • Subsidizes the cost to small businesses of health care coverage offered to employees.  You may be eligible if you have fewer than 25 employees who work full time (including a combination of full and part time).  For 2014, the maximum credit is 50% of the premiums paid.

Self Employed Filing Requirements!

  • If you are self-employed, you are generally required to file an annual tax return and pay quarterly estimated income and self-employment taxes (Social Security and Medicare). If you earned $400 or more from self-employment, you generally have to file an income tax return

Why incorporate in other States?

  • Nevada has some privacy benefits which make it an attractive state for business formation. Besides being a tax-free state, Nevada allows elected nominee officers and directors when you incorporate whose names go on the public filed articles. The names of the actual corporate members do not appear on the public record. Both corporations and LLC’s can use nominees on the articles of incorporation or formation
  • Delaware is considered by many to be the most favorable business friendly environments for incorporating your business. Delaware’s “Court of Chancery”, consisting of judges who hear only corporate law cases, makes for consistent rulings, predictability of outcome and avoidance of expensive legal battles. Most publicly traded companies are incorporated in Delaware which fosters an image of public creditability that may increase the likelihood for investors to contribute money to your future public or private offering

Are you required to file in other states?

  • Although you may not have a physical presence in a particular state or jurisdiction, if you have done any of the following, you may have created nexus in a new state:
    • Sent an agent or sales representative to a new state
    • Delivered and installed a product in a new state
    • Hired new employees that work from a remote location
  • Nexus laws are often quite complex and differ from state to state
  • Be aware of the laws in each new state where you conducted business to determine if sales tax registration and filing are required

Employee Hidden Raises

  • Offering fringe benefits such as health, vision and child-care assistance in lieu of standard raises can provide tax-free perks to your employees while still entitling you to business deductions

For more information on Business Taxes or another area of accounting, please contact Bob Jahelka at 516-861-3707 or .


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