Tax tips for Businesses

The healthcare tax credit is offered on a sliding scale. Businesses that employ fewer than 10 full-time-equivalent employees with average wages under $25,000 per person get the most benefit. To claim the credit, use form 8941 to calculate your eligibility. If your business did not owe taxes in that year, you may be able to carry the credit forward. If a remainder of the tax premium exists, you can claim business expenses against it.

Deduct section 179 property

Small businesses can opt to deduct the full amount of certain property as expenses in the year the business began using them. This is referred to as section 179 property and can include up to $500,000 of eligible business property in the 2016 tax year. Some eligible deductions include:

Property used in manufacturing, transportation and production
Any type of facility used for business or research
Buildings used to hold livestock or horticultural products
Off-the-shelf computer software
Excluded:

Land
Investment property
Land outside of the U.S.
Buildings that provide lodging
Buildings that are used to store air conditioning or heating units
TurboTax can assist you in choosing what types of property are appropriate deductibles.

Courtesy of TurboTax

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Small Business Healthcare Tax Credit

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

offer coverage through the small business health options program, also known as the SHOP marketplace
have fewer than 25 full-time equivalent employees
pay an average wage of less than $50,000 a year
pay at least half of employee health insurance premiums
Here are five facts about this credit:

The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.
To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.
The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.
You can carry the credit back or forward to other tax years if you do not owe tax during the year.
You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.  
 For more information, see the small business health care tax credit page on IRS.gov. 

Have questions? Contact Neikirk, Mahoney and Smith at 502-896-2999