Tax time is here or at least the process to gather your information and take it to your CPA has started. By mid-April your federal and state taxes should be filed and one less burden will be on your shoulders. At least until next year. Here’s what you can do to get prepared now as well as keeping your eye on next year’s taxes and beyond.
Take the Health Care Credit
Your CPA will ask you some new questions this year about your business. With the federal health care law now in place, there may be a significant tax credit awaiting you. Accordingly, you must be aware of what this will mean for your enterprise.
Specifically, your CPA must determine if your business is eligible to take the 2014 health care tax credit of 50 percent. There are certain stipulations that your business must be met to include: average annual wages of under $50,000 per employee, fewer than 25 people or full-time equivalent individuals are employed by you, your business contributes at least 50 percent to your employees personal health premiums, and that health insurance is purchased through the designated marketplace. Further, you might also qualify for a state deduction.
IRS Form 8941, Credit for Small Employer Health Insurance Premiums
Business owners should be aware that IRS Form 8941 — Credit for Small Employer Health Insurance Premiums — is used to help businesses claim their tax credit. If your business employs fewer than 10 full-time workers (or their equivalent) and you pay them less than $25,000 per year, then this deduction will be especially beneficial to your business.
Your CPA will first verify eligibility, then determine if you owe taxes. If you do not owe taxes, then the credit can be carried forward. Business expenses may also be claimed against the tax premium if a balance exists. For that reason, you will want to present your receipts for your business overhead.
About the Section 179 Deduction
Property acquired for business use may be eligible for an important deduction under Section 179 of the tax code. Only depreciable property is eligible, what includes tangible personal property, a research facility, certain storage facilities, machinery and equipment, and other properties. Your CPA will go over the full list of eligible properties.
The IRS allows business owners to include up to $500,000 of eligible business property for the most recent tax year. That limit is expected to begin dropping in 2015, therefore you will want to take the full deduction as allowed by law.
Business Start Up Costs
If you launched your business in the last year, then your CPA will examine your start up costs. Further, those costs can include what you spent on the business prior to your officially opening for business according to the Small Business Administration.
Your CPA will be reviewing various capital expenses incurred such as: your visit to potential business locations, market surveys to gauge business potential, product analysis, and labor supply. Even before your doors open there is other business-related overhead that can be deducted to include: employee training, consulting fees, advertising, and travel-related costs for finding suppliers. When you visit your CPA, have this information at the ready.
Your CPA has other expenses in mind that can be deducted. For instance, employee expenses can be deducted, a cost that you may have overlooked. Specifically, those costs can include: employee travel such as airfare, hotel stays and meals. Moreover, gas, tips and even baggage fees are also eligible.
So, make your appointment with your CPA today and begin gathering your important documents. Hundreds, perhaps thousands of dollars in tax deductions may be awaiting you.
See Also — Novars Group Business Valuation Services