- A review course on education tax credits
- Unclaimed property can be a business issue
- Watch out for special rules when making a Roth conversion
- Some business meals get a full deduction
- DB(k) retirement plans are new this year
- Pay yourself reasonable wages
- The kiddie tax: A basic review
- Follow IRA withdrawal rules
- Homebuyer tax credit extension
- Collectibles face special tax rules
- Rental property tax rules are complicated
- Payroll tax update
- Don't overlook the Roth five-year holding requirement
- Can you qualify for the small business health insurance credit?
- Military tax breaks are available
- Do you need to file an FBAR?
- Roth IRA conversion: Act now, pay later?
- Start your 2010 planning with your 2009 tax return
- Don't ignore employer penalty notices
- The HIRE Act offers tax breaks for hiring
- Direct deposit: Should you buy savings bonds?
- The Patient Protection and Affordable Care Act reforms health care
- Can you take a home office deduction?
- Deducting interest expense: What you need to know
- Did you receive Form 1099-C?
- Missing a W-2?
- Who has to file an income tax return?
- New law allows early deduction for Haiti relief donations
- The dependency exemption: What you need to know
- What's your status?
- Payroll - A 2010 employer update
- Review payroll reporting for 2009
- What to expect on your 2009 return
- Check these vehicle tax breaks for 2009
- Know the rules for backup withholding
- Tax issues come with gifting stock
- Hiring seasonal employees? What you need to know
- Don't get tripped up by a wash sale
- New law includes two important tax changes
- Two IRA tax breaks are scheduled to expire soon
- Take a tax deduction for worthless stock
- Withdrawals from your SIMPLE IRA may not be so simple
- Savings bonds can help pay for college
- Tax tips for first-time employers
- First-time homebuyer credit to expire November 30
- Closing your business has tax implications
- You need basis to deduct an S corporation loss
- Unemployed? Pay health premiums from your health savings account
- Some IRA terms you should know
- Employee or independent contractor? Don't misclassify workers
- Take a penalty-free IRA withdrawal for medical expenses
- Your business vehicle expenses are deductible
- Plan for the phase-out of tax breaks
- Your business could benefit from the extended net operating loss carryback
- When is income taxable, and when is it not
- IRS has a new procedure for correcting payroll returns
- Capture tax breaks when you refinance
- Prepare now for a possible disaster
- Tax law changes could affect your 529 plan
- Two reasons to review tax payments
- The COBRA credit: What employers must know
- Don't waste your tax refund
- A new vehicle could give you a new tax break
- Check out the "making work pay" credit
- Don't overlook a theft loss deduction
- Who owes self-employment tax?
- The Internal Revenue Service and Treasury Department Release Additional FBAR Guidance
- HIRE Act
- Health Care Updates
News
The HIRE Act offers tax breaks for hiring
Are you thinking of hiring new employees, or rehiring previously laid-off workers? You may qualify for a payroll exemption as well as a business credit under the newly enacted Hiring Incentives to Restore Employment Act (HIRE Act).
Here are details.
Payroll exemption. When you hire certain unemployed workers, you may qualify for forgiveness of the 6.2% social security tax you would normally pay on the wages of those new employees.
Your new hires must start work after February 3, 2010, and before January 1, 2011. In addition, they'll have to certify they worked less than 40 hours during the 60-day period prior to starting the job with you. Relatives are ineligible, and your new workers generally can't displace a current employee.
The exemption is available for wages paid from March 19, 2010 through December 31, 2010. You'll claim it on your quarterly payroll reports, beginning with the second quarter of 2010.
Note that you'll still have to withhold and deposit the employee's portion of the social security tax, and that both you and your employee are required to pay Medicare tax on all wages.
Be aware, too, that while the exemption will free up current cash flow, you will have less payroll tax expense, and therefore a smaller deduction on your business tax return at year end. Also, wages that are eligible for the exemption do not qualify for purposes of calculating the Work Opportunity Tax Credit unless you opt to forego the exemption.
Business tax credit. In conjunction with the exemption for social security tax, you can take a federal tax credit for the newly hired workers who stay with your company for 52 consecutive weeks. The maximum credit is $1,000 per retained employee, and you'll claim it on your year-end business income tax return.
The HIRE Act also extended the enhanced Section 179 expensing rules. Through the end of 2010, you can expense up to $250,000 of machinery and equipment you purchase and use in your business, as long as the total cost of the assets you buy doesn't exceed $800,000. Bonus depreciation, which expired at the end of 2009, was not extended.
Give us a call to discuss the new legislation. We're here to help you get the most benefit from the tax breaks available to you.
For more information, contact Ross Rizzo at 212-404-5528, rrizzo@sb-cpa.com.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
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