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| Small Business Tax Breaks |
Business Stimulus-Law extends the first year 50% bonus depreciation through 12/31/2009 and also extends the bonus depreciation through 2010 for an additional year for property having a recovery period of 10 years or more or for transportation property, used to transport people or property. The ability to recover a portion of amounts spent on machinery, equipment, buildings, and other assets through depreciation deductions is a significant tax benefit, especially for capital intensive businesses. Don't overlook the possibility of deducting up to $134,000 of your 2010 business asset purchases instead of depreciating them. Section 179 expense increases from 2009 to $250,000.
New NOL carry back law allows businesses to cary back an NOL for 2, 3, 4 or 5 years. This only applies to new NOLs. Certain businesses will be allowed to recognize Certain Cancellation of Debt income over 5 years beginning in 2014, for specified types of business debt repurchased by the business after 12/31/2008, and before January 1, 2011. The bill reduces the 2009 required estimated tax payments for certain small businesses.
Working Opportunity Tax Credit- This credit is available for hiring employees who are members of certain targeted groups. In general, the credit is 40% of a qualifying employee's first year wages, up to a maximum of $6,000 for a maximum credit of $2,400 per employee. The credit reduces the employer's wage deduction dollar for dollar. |
Advanced Tax Strategies: |
- Use Cost Segregation for business real estate
- Self employed? Hire your children (Be sure to comply with all rules)
- Self employed business owners can hire their spouse and deduct more medical expenses
- Ask about the back-end vehicle deduction
- Know the rules for deductinga cruise for business purposes
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New Mileage Rates |
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Rules of the Road: Selling or Trading your Business Vehicle |
Rule 1. Watch the size of your back end (basis)
Rule 2. Know your gain or loss before trading or selling
Rule 3. Sell to take advantage of the loss
Rule 4. Trade or use an intermediary to effect a Section 1031 exchange, which defers paying taxes on the gain
The point here: Always know the sale result on your vehicle before you sell or trade. You cold have significant money on the table due to the big back end caused by the luxury limits.
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Cash for Clunkers |
This is a cash incentive for individuals and businesses to trade in older gas-hogging vehicles for new, more fuel-efficent ones. The incentive takes the form of a voucher of $3,500 or $4,500 depending on the type of vehicle traded in and the fuel efficiency of the vehicle purchased. The new vehicle has to be purchased between July 1 and November 1 of 2009. Click here to check out this website for all the details. |
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2010 SOCIAL SECURITY & MEDICARE WAGE LIMITS: |
The Social Security Wage limit will stay the same at $106,800 for 2010. There is no wage base limit for Medicare tax. The Social Security withholding rate remains the same at 6.2%. The Medicare withholding rate remains at 1.45%. |
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SOCIAL SECURITY NUMBERS ONLINE: |
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SALES/USE TAXES: |
All companies are subject to Use Tax if they purchase items for the company use from an out of state or online vendor or through the mail, and do not pay sales tax at the time of purchase. Both Kansas and Missouri are auditing companies that do not file a Use Tax Return. The Kansas Compensating Sales/Use Tax rate is imposed on all qualifying transactions listed above. The rate for Kansas is the same rate as for the city/county of domicile. Kansas Sales/Use tax rates by jurisdiction can be located online at www.ksrevenue.org/forms-bustax.htm. Tax Rates for Missouri are based on the city where the vendor is located, and can be found by calling 573-751-2836. |
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INFORMATION RETURNS-FORM 1099: |
You are required to file information returns on Form 1099-Misc. for all payments made to non-employees in the
amount of $600 or more for the year. The forms are due to recipients by January 31st, 2010. |
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FRINGE BENEFITS: |
Generally, you must include fringe benefits in an employee’s gross income. Most common fringe benefits that must be included are personal use of a company auto and S Corporation shareholders health insurance. The amount to be included should be the fair market value of the benefit less the amount paid by the employee. Be sure to notify your payroll service of all fringe benefits that need to be included on the employee’s W-2 by the end of December. |
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UNEMPLOYMENT TAXES: |
FEDERAL: |
For 2010, the unemployment rate remains at .8% and the limit remains at $7,000. Form 940, Employer’s Federal Unemployment Tax Return, must be filed with the IRS on or before January 31, 2010. The taxable wage base in Missouri increased to $13,000 for 2010. In Kansas, the taxable wage base remains at $8,000 for 2010. Contact our office for the wage base in other states. |
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