News - 2011 Tax Tips
Small Business Tax Tips for 2011 and beyond...
Employers
- The employee withholding for Social Security taxes is reduced from 6.2% to 4.2%
The employer contribution remains the same at 6.2%
- The adjustment for S/E tax for sole proprietors is a little more complicated
However, it should be built into the tax software programs when they come out
- There's a payroll tax exemption for the employer's share for hiring unemployed individuals that qualify under IRS rules
- A complicated set of scenarios can result in tax credits for small employers who provide health insurance for their employees
Depreciation
- Bonus depreciation is increased on 100% from 50% for purchases of qualified business property subject to certain limitations
- Section 179 first year expensing of business property purchases is increased
- Leasehold improvements (upgrades & renovations to your rented office or storefront), restaurant building improvements, and retail building improvements can now be depreciated over 15 years instead of 39 years
- Ask your tax preparer to give you a copy of the depreciation schedule before they prepare your taxes (if they don't already do so)
Make sure everything on the report is actually in service and being used for your business
Business Owners and Landlords
- Beginning in 2011, you will be required to issue a 1099-MISC to any unincorporated entity that provides more than $600 of services or goods for your business and/or rental property.
Yes, this includes the plumber, electrician, and cleaning lady
At this point make sure you get W-9s (found at www.irs.gov) for all your service providers
- Beginning in 2012, the rules for issuing 1099-MISC will be expanded to include corporations
If you have questions about any of these items, feel free to give Kathryn M. Weber a call.
Kathryn M. Weber, CPA
410-280-8988
kathryn_weber@verizon.net