Accounting News and Notes

Atlanta CPA…Avoiding Tax Pitfalls

Avoiding Tax Pitfalls is one of the most critical issues facing Atlanta Entrepreneurs as their business is in the rapid growth stage. Having a CPA who is well versed and can also serve as a Virtual CFO is essential. The below are two of the most critical issues facing Atlanta Business Owners and Beyond:

Small Business Health Care Tax Credit

If you business has an average salary of less than $50,000 (not counting owners, their family members and those not on your medical insurance plan), have less than 25 Full Time Equivalents (FTE’s) and provide over 50% of the insurance for all employees you may qualify for the Small Business Health Care Tax Credit.  If you think you might qualify please forward the amount of net medical insurance premiums paid  by employee (after deducting the amounts an employee paid) along with whether their medical coverage is Single or Family. To ready more visit http://www.hiscpa.com/blog/2011/08/23/atlanta-cpa-does-your-business-qualify-for-the-health-care-credit/ It would be advantageous to record the medical insurance premiums for employees in owners in a separate P/L account.

Small Business Health Care Tax Credit

Keeping your business legal in all states where your company transacts business is essential. There are several criteria to evaluate when considering where to originally incorporate/domicile your business. All the criteria should be looked at in aggregation to consider including where your business has its core business operations, employees and physical locations. To learn more visit http://www.hiscpa.com/incorporating.html

Part-time Chief Financial Officer

For the rapidly growing business in a new or emerging market, the ability to plan for your future is as critical as the growth itself. By retaining a seasoned CPA as a part-time CFO/Controller you will do much to prevent financial disaster from ruining your well laid plans.  To learn more visit http://www.hiscpa.com/parttime-cfo.html

Atlanta CPA…Does Your Business Qualify for the Health Care Credit?

Does Your Business Qualify for the Healthcare Credit?

To qualify for the Small Business Health Care Tax Credit employers must:

Pay at least 50 percent of health care premiums/coverage for all eligible employees.

Have less than 25 Employees as FTE’s (Full Time Equivalents). For example a firm with 50 half-time workers may be eligible).

Average annual wages (based upon FTE’s) must be less than $50,000. The health care credit is at its maximum at $25K and then is phased out at $50K.

Please note that for FTE and salary purposes the owners of the business/family members and dependents should not be considered.

Insurance benefits must be offered the same to all employees.

To determine the Health Care Credit you will need..

By employee what the health care premiums paid were. Be sure that this list only the portion that the company pays (if an employee pays a portion this will need to be netted against the total premium). Be sure that you send to your tax preparer by employee a report that reconciles/equals the net amounts on the profit and loss, their wages and their hours worked in Full Time Equivalents/FTE.

To help clarify the law in determining FTE/Full Time Equivalents:

If you hire a full time employee on December 1st of the year you would count their hours as 173 hours (2080 full time hours divided by twelve months in a year).

If you have a permanent part-time employee who works ten hours a week then they would be reflected as 520 hours provided they worked all year (52 weeks a year times ten hours a week).

Please note you will not want to consider any overtime hours in a week/pay period in determining their annual hours of service.

By employee whether they were on a employee only coverage or family coverage.

To read more on Small Business Health Care Tax Credit for Small Employers visit  http://www.irs.gov/newsroom/article/0,,id=223666,00.html

If after an initial review of the above criteria you believe you qualify for the healthcare credit you will need to forward to your CPA the net amount of health care premiums the company paid by employee along with the hours that employee worked during the year.

For help pulling your information together to prepare your year-end taxes you can use His CPA – Checklist for Year-End Taxes and Monthly Financials    http://www.hiscpa.com/newclient.html