Just the other week I wrote about the Top 5 Tax issues facing Arizona Business but that was only the half of it. Today I’ll cover 5 more tax issues that small business owners should know about so that you know what the IRS expects.

Small Business Health Insurance Credit – OK, you’re probably on health insurance information overload but I would be remiss if I didn’t include this one on the list. At a summary level, the tax credit to small employers that provide an affordable health insurance plan will increase to 50% of the employer’s contribution in 2014. This is an increase from the 35% in 2013. Now for the details;

• a small employer is defined as one with 25 or fewer equivalent full-time employees
• to qualify, the employer must supplement at least half of the premiums
• for non-profit employers, the credit will be 35% in 2014

Higher Tax Rates – If your business is growing and your income has increased, be reminded that starting in 2013 and continuing forward, a new top tax tier with a rate of 39.6% was added. Prior to the increase the top rate was 35%.

Higher Capital Gains Rates – And yet another tax rate increase, also one of the tax issues, the rate for long-term capital gains and qualified dividends has been increased to 20% (up from 15%) for taxpayers with incomes exceeding the threshold for their filing status.

Bonus Depreciation Expires – The 50% bonus depreciation that had been in existence will expire beginning in 2014.Wrapped into this change is a reduction in the first-year maximum depreciation deduction for business autos and small trucks.

Increased Payroll and Self-Employment Tax – Yes, yet another increase related to the ‘Affordable Care Act’. Taxpayers with higher incomes will pay an additional 0.9% health insurance tax. Starting in 2013, you’ll be assessed this surtax if your wages or self-employment income exceeds $250,000 for married taxpayers filing jointly ($125,000 if filing separately) and $200,000 for all others.

Find out more about Randy J. Elder, CPA and how he is helping Arizona small business here.

 

Randy Randy J. Elder, CPA, P.C.

With nearly three decades of professional experience in public accounting, Randy provides his tax and accounting expertise to new and small businesses in a casual and friendly environment. Before founding Randy J. Elder, CPA, P.C., he held various positions with an international accounting firm, and with regional and local CPA firms. Randy earned his Arizona CPA license in 1988, and holds a Bachelor of Science degree in Accountancy from Northern Arizona University.

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