New Tax Laws Every Small Business Must Know

August 25, 2013

Many small businesses especially start-ups may be unable to afford the fees for CFO outsourcing professionals but that’s not a valid excuse to be largely ignorant about the new tax laws for 2013. Keep in mind that not only are small businesses held accountable for their actions or inactions in relation to tax laws as their larger counterparts (i.e., multinational corporations) but their capitalization, no matter how modest it may be, should certainly include an allocation for hiring the best possible Rochester accounting firm – or at the very least, a Rochester CPA!

With that being said, here are the most important laws that affect taxes for small businesses especially in their tax planning goals. Ask your Rochester accountant about the details of these laws so that you can keep abreast of their financial and non-financial implications for your business.

Affordable Care Act

If you have fewer than 25 full-time employees for whom you provide healthcare insurance, then you are qualified for a small business tax credit of up to 35%; said credit can be used to offset the cost of the healthcare insurance plan. In 2014, the credit will increase to 50% so there’s little to no excuse to withhold healthcare insurance for your employees although it must be emphasized that employers with less than 50 full-time employees can also choose not to provide assistance for health insurance.

Small Business Jobs Act

Yet another law that will affect Rochester taxes for small businesses in the area is the Small Business Jobs Act. It includes 8 business tax cuts that extend the accelerated bonus depreciation for small businesses with the goal of making investments more affordable and spurring growth in the industry. It also provides millions of self-employed Americans the opportunity to deduct their healthcare insurance costs in the calculation of their self-employment taxes.

(Note: If you fall into one of these categories, you are well advised to ask for the expert assistance of the professionals such as an accountant of the best Rochester consulting firm. The law has plenty of provisions that sound Greek to non-accountants and non-tax planners, for example)

The Hiring Incentives to Restore Employment (HIRE) Act

The unemployment rate in the United States has reached new highs – or new lows, depending on your perspective – because of the aftereffects of the so-called Great Recession. The federal government, in its efforts to lessen the unemployment rate, provides incentives for businesses to hire unemployed individuals, said incentives of which include general business tax credit and payroll tax exemption.

The Work Opportunity Tax Credit works in a similar manner. Employers can avail of credits for hiring military veterans or individuals from underserved communities.

Bonus Depreciation Extension

This is one of the best methods for lessening the tax burden for small businesses and start-ups. Basically, bonus depreciation provides these businesses with the opportunity to recoup the costs of new equipment faster by allowing 50% depreciation to be claimed as expenses within the first year, thus, lessening the tax burden. The credit will be extended until the end of 2013 for all types of qualified equipment with extensions until 2014 for specific forms of qualified investments.

That’s just the tip of the iceberg! To keep abreast of new laws affecting your small business, work with the best Rochester accountant now!

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