Last Minute Tax Advice for the Small Business Owner
Posted by Shannon Suetos on April 6, 2010 in Business Financing, Business Management, Business News [ 0 Comments ]
Taxes are due next week, and for those of you who haven’t submitted your tax information, take into account some creative ways to get your money back. If you are a small business owner especially, because the stimulus bill passed last year wasn’t to kind for tax breaks.
“If you comb through the stimulus package and see what’s practical for small businesses, there’s just not a lot there, especially for the really small folks,” says Kevin Reeth, CEO of Outright.com, a website that offers financial management tools for small businesses and the self-employed.
Another tax that is hitting small business owners hard is the unemployment insurance tax bill, which is showing an increase as large as 500% in some states. “The annual state unemployment insurance tax bill for his [a small business owner] 16 employees will rise to $7,219 in 2010, or $451 per worker. Two years ago, before two rounds of layoffs, the total was $2,387 for 31 employees, or $77 each. That’s a per-worker increase of nearly 500 percent,” says a small business owner in Indiana.
With that being said, below are some tips to find a few extra tax breaks.
- Making Work Pay tax credit: Usually thought of as a personal tax credit, it may be an option for small businesses—especially if you are the sole employee of the company.
- The Consolidated Omnibus Budget Reconciliation Act: If your company enforces COBRA you could be eligible as of last year’s stimulus credit for the money you have paid. The Act allows a business to get a reduction on their employment taxes.
Don’t forget some tried and true tax deductions as well:
- New Office Equipment
- Software purchasing
- Educational seminars/webinars
- Client Entertaining
Next tax season is also looking a little better for small business owners. A new bill passed at the beginning of March promises tax cuts for any business that hires the unemployed. This job bill includes a 6.2 percent Social Security payroll tax through December and gives an additional $1,000 credit if the new hired workers stay on the job for an entire year.
Tax season is a stressful time, and especially for the small business owners who are the sole employee. Take the time to research any new laws, and get creative with it.