Randy J. Elder, CPA, P.C.

Top 5 Tax Issues Facing Arizona Small Business: Part II

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.