Category Archives: Small Businesses

3 Tax Tips You Need to Know Heading Into 2014

Countdown to the New Year.

FoxNews irs-logo-tax-1040-formThe budget deal that Congress and President Obama struck at the beginning of the year to avoid the fiscal cliff resulted in seven tax increases. If you throw in the six tax hikes that are part of Obamacare,  that means there are 13 new taxes that may have hit you in 2013.

1.) The biggest potential taxes for wage earners include: Continue reading

Do you need to issue a Form 1099-MISC for services rendered?

CAUTION TAX FORMS NEEDED!Who Must Issue 1099’s?

Businesses.  You must report payments to others for services.
Nominees.  If you are receiving income – but part of the income belongs to another.

BUSINESSES
If you paid $600.00  or more to a person or business during 2013 and may need to issue a form. This applies to business expenses only.  You don’t need to report payment for personal expenses or any payments made to a corporation.
This is true even if you are a one-person office.

Continue reading

Interest Rates Remain the Same for the First Quarter of 2014

For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Larger IRS

 

IR-2013-96, Dec. 9, 2013

WASHINGTON ― The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Jan. 1, 2014.  The rates will be:

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];
  • three (3) percent for underpayments;
  • five (5) percent for large corporate underpayments; and
  • one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during Oct. 2013 to take effect Nov. 1, 2013, based on daily compounding.

Revenue Ruling 2013-25 announcing the quarterly rates will be published  in Internal Revenue Bulletin 2013-52, dated Dec. 23, 2013.

Mileage Deductions

January 29 Header for ChildCare Site

 For 2013 you get 56.5¢ for each business mile (keep your logs daily) . While employees can’t deduct driving to work, look at visits to clients, extra meetings, errands or shopping for supplies. Business owners – especially child care providers – have the same and more.  To learn more, click here.

Dec 2013 – April 2014 Tax Dates to Keep In Mind

YOUR TAX CALENDAR

December 31

  • A check mailed on December 31 counts for 2013.  Last chance for deductions!
  • State estimated tax paid December 31 is deductible on 2013 Federal Return

January 15

  • 4th quarter estimated tax payments due.

February 1

  • Employers – Quarterly payroll & FUTA due (Federal Unemployment Tax).
  • W-2s and 1099s due to recipients.

March 3

  • W-2s and most 1099s due to IRS.

April 15

  • 2103 Tax Returns due.
  • Last day for 2013 IRA contributions.

New IRS Healthcare Law Website for Individuals and Businesses

The IRS has launched a new Affordable Care Act Tax Provisions website at IRS.gov/aca to educate individuals and businesses on how the health care law may affect them.

small IRS logo for blogging

The new home page has three sections, which explain the tax benefits and responsibilities for individuals and families, employers, and other organizations, with links and information for each group. The site provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond.

Topics include premium tax credits for individuals, new benefits and responsibilities for employers, and tax provisions for insurers, tax-exempt organizations and certain other business types.

Visitors to the new site will find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.

Several other federal agencies have a role in implementing the health care law, including the Department of Health and Human Services, which has primary responsibility. To help locate additional online resources from the Department of Health and Human Services, the Department of Labor and the Small Business Administration, the IRS has issued a new Web-based flyer – Healthcare Law Online Resources (Publication 5093).

Visit IRS.gov/aca for more information regarding the tax provisions of the Affordable Care Act.

Affordable Care Act Provisions for Small Employers, Beginning October 1, 2013

Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees or equivalents.

If you have fewer than 50 employees, but are a member of an ownership group with 50 or more full-time equivalent employees, you are subject to the rules for large employers.

Coverage

  • Beginning Oct. 1, 2013, if you have 50 or fewer employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).
  • To learn more about how the Affordable Care Act may affect your business, visit HealthCare.gov.

Reporting

  • Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. This rule is optional for 2014. Learn more.
  • Beginning Jan. 1, 2013, you must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000. Learn more.
  • You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.

Payments & Credits

 

IT IS IMPORTANT TO CHOOSE A TAX PROFESSIONAL, SUCH AS AN ENROLLED AGENT, WHO KEEPS UP WITH THE RULES AND REGULATIONS AND USES THIS EXPERTISE TO DO THE BEST JOB POSSIBLE FOR EVERY TAXPAYER. 

R. Patrick Michael, EA, continues to provide tax preparation and financial consultation services since 1978.  Pat can be reached at  619-589-8680