During my year-end tax planning meeting with my CPA in which we discuss the painful subject of taxes, I learned a few interesting things I thought I might pass along. If you know it already, give your CPA a pat on the back, and have a great New Years celebration.
If you don’t, then here’s something that might help lessen the tax pain a bit. This is just a summary based on my recollection (and I have only enough info to be dangerous), so ask your CPA during your own arduous tax planning session for all the details…
HIRE ACT – – This tax credit saves you the 6.2% in payroll tax you pay for employer matching of social security – for qualified employees hired February 3rd and before December 31st who have been unemployed or employed for 40 hours or less during the 60 day period ending on the date the new employment begins. They cannot be employed to replace another employee unless the other employee left voluntarily or was terminated for cause. The credit is for the 6.2% matching of social security for the period of March 19 through December 31. The employee must sign an affidavit indicating they are eligible for the credit (the IRS has Form W-11 which you can use).
If you keep the employee for 52 consecutive weeks, you are eligible for up to $1000 credit in 2011.
SMALL BUSINESS HEALTH INSURANCE TAX CREDIT – – This is a very complex credit but in a nutshell if you have fewer than 25 employees, with average wages of less than $50k, and you paid for 50% of the health insurance, it appears you qualify for a tax credit (beginning in 2010).