Are you a small business owner or are you self-employed?  If you are, you probably have questions about taxes for your particular situation.  You can check out the IRS’s Small Business and Self-Employed Tax Center on the IRS website.

The IRS’s one-stop shop offers a variety of resources and online tools to help small businesses and self-employed individuals by providing resources such as:

• A-Z Index for Business, a fast way to find information
• Small business forms and publications
• Online applications for an Employer Identification Number
• Employment tax information – federal income tax, Social Security and Medicare taxes, FUTA and self-employment tax
• Tax-related news that could affect your business
• Small business educational events
• IRS videos for small businesses

Did you know that there is also a Tax Calendar for Small Business Taxpayers?  The Tax Calendar for Small Businesses and Self-Employed – Publication 1518 – is available online or as a printable PDF file. This 12-month calendar containts information on general business taxes, IRS and Social Security Administration customer assistance, electronic filing and paying options, retirement plans, business publications and forms, and common tax filing dates. Each page highlights different tax issues and tips that may be relevant to small-business owners, with room on each month to add notes, state tax dates or business appointments.  You can also download the tax events into your calendar or subscribe to the tax calendar events.  The calendar provides the small business owner with a ready resource for meeting their tax obligations.

If you have other questions about your tax obligations, you might want to contact a tax professional.

Daniel Stoica Accounting Professional

It’s almost summer, which means vacation time for most people. Wouldn’t it be great if everyone could take a deduction for vacation expenses? Well, if you are a small business owner, you can. It’s absolutely legal to deduct your vacation. Below are examples of how to do it (but remember to contact your tax professional to get the most complete information). 

To qualify for this deduction, you have to meet the following criteria:

1. If you are self-employed or own a small business
2. If, on your next trip, you combine business with personal.

In terms of a  small business, this includes any type of self-employment, full or part-time, home-based or bricks and mortar. The deduction refers to any type of small business: sole proprietorships, partnerships, corporations, and limited liability companies.

To deduct a U.S. trip, you are allowed to combine business with personal, but the main reason for the trip must be business related. The IRS defines a trip taken for business purposes as the number of business days must be more than the number of personal days. Also, time of travel is considered part of the business days.

If the number of business days are more than 50% of the total vacation days, then  you can take the deduction. This is what you are allowed to deduct: 100% of your transportation expenses and 100% of the expenses for your days on the road, including hotel, cab fares, rental car, business related fees, dry cleaning, laundry and meals.

Meal expenses are subject to the 50% rule. When 100% of your on-the-road expenses, including meals, are for the business days, they are deductible, and the actual amount of the meal deduction will be 50% of the meals cost. Basically, you are only allowed to deduct 50% off of your meal expenses.

Transportation expenses include air fare to and from, if you take a plane. If you drive, you are able to deduct the actual cost of gas or take the deduction that is the current IRS-approved mileage rate.

The IRS has made a list of all of the allowed deductions on their website. Below is an example of what is and isn’t deductible.

Trip Primarily for Business:  See the IRS website for full details at irs.gov. 

You can deduct all of your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.

To make sure you get the maximum amount of deductions on your vacation, and so you take the correct deductions, please consult with a tax professional for help.

Daniel Stoica Accounting Professional

You might be impacted by the Affordable Care Act tax provisions, whether you are a small business owner or an individual.

President Obama signed The Affordable Care Act into law on March 23, 2010. The goal of the health reform is to guarantee that all Americans have access to affordable health insurance. The law will affect nearly every American, including those who are on government run health insurance, people who pay for their own insurance, small businesses, seniors on or eligible for Medicare, and large employers who offer medical coverage.

The Affordable Care Act contains several tax provisions that will begin as different areas of the health reform legislation are put into action. Action on the health reform law is the duty of the Department of Health and Human Services. The purchase of health insurance is included in many worker’s jobs and tax-related benefits. Almost all of the new regulations involve the involvement of the Department of Labor and the IRS.

Below is a list of some of the tax-related effects of the Affordable Care Act that have been decided. For the complete list, please visit www.irs.gov.

Employer-Provided Health Coverage is not taxable
Starting in the 2011 tax year, the Affordable Care Act requires your employer to report your health insurance coverage on your W-2. This is only for your information. It is there to let you know the value of your health care benefits. The amount doesn’t affect your tax liability because the cost of your employer’s contribution will not be included in your income and is not taxable.

Small Business Health Care Tax Credit
If you own a small business, this credit will help you to afford coverage of your employees. It is for businesses with low to moderate income workers. The credit encourages small business employers to offer health insurance coverage for the first time or keep coverage it may already have. The credit is available to small business employers that pay at least half the cost of coverage for their employees.

To qualify for the small business tax credit you must meet the following eligibility rules:
-Provide health care coverage: You must cover the cost of at least 50% of health care coverage for some of your workers based on the single rate.
-Company size: You must have fewer than 25 full time employees. An employer with fewer than 50 part time employees may be eligible.
-Average annual wage: You must pay an average annual wage of less than $50,000.

If you are eligible, the credit is worth up to 35% of your premium costs. This rate increases to 50% (35% for tax-exempt employers) on January 1, 2014. The credit decreases slowly for companies with average wages between $25,000 and $50,000, and for companies with 10 to 25 full time employees.

Health Coverage for Older Children
Health care coverage for your children under the age of 27 is now tax-free. It applies to a variety of work place and retiree health plans. This change became effective in September of 2010 and allows employers with cafeteria plans to allow employees to make pre-tax contributions to pay for this benefit. This tax benefit also applies to people who are self-employed to also qualify for the self employed health insurance deduction on their federal income tax return.

If you are uncertain about any details of the Affordable Care Act tax, it is a good idea to talk to a tax professional. He or she can assist you in determining which one will bring the most tax benefits for you.

Daniel Stoica Accounting Professional