New Tax Benefits Available to Aid Employers

Last March Congress passed two watershed reform laws, the Hiring Incentives to Restore Employment (HIRE) Act and the Patient Protection and Affordable Care Act, both of which include considerable tax breaks for employers. These tax benefits might be the perfect remedy for employers looking to expand payroll or looking to save.

The HIRE Act

The HIRE Act includes provisions that will benefit employers who hire previously unemployed or underemployed workers this year. The employers who qualify are eligible for a 6.2% payroll incentive, which effectively exempts them from their share of Social Security taxes on wages paid to the employee. How much exactly could that 6.2% save you? It could be a lot!

Let’s say you hire 3 previously unemployed employees and each are paid $25,000. With the HIRE tax benefit, you can save $4650!

Another tax break included in the HIRE act is an additional general business tax credit, up to $1,000, for each previously unemployed worker retained for at least a year. The tax credit applies when businesses file their 2011 income tax return.

Here is the breakdown on how you might qualify:

· Employers must have hired unemployed workers this year from February 3, 2010 and before January 1, 2011.

· The employer must receive a statement from the new hire that confirms he or she was unemployed for at least 60 days before being hired or have worked less than a total of 40 hours in the previous job.

· New hires who fill existing position may only qualify if the previous workers left voluntarily.

Check out this link http://www.paychex.com/hireact/

from PayChex to see how

much you can save.

The Patient Protection and Affordable Care Act

The new health care law offers a tax credit to small employers that provide health care coverage to their employees. Businesses can claim a maximum credit of 35% of the employer’s premium expenses against their income tax return.

How much can you save from this tax credit? Let’s say you have 10 employees on staff and you pay $300 a month for their health care premium, a total of $36,000 a year. If you qualify for the maximum credit of 35%, you can receive a $12,600 credit!

Here is how you may qualify:

• Businesses must have fewer than 25 full time employees for the tax year.
• The wages for the employees must average less than $50,000 per employee.

For more information, give us a call!

Save the Date! - Client Appreciation Party

Mark your calendar for Friday, May 7, 2010 for eeCPA's client appreciation party. Get ready for Casino Night and plenty of food, music, gambling, and prizes. Why? Because we appreciate you! More details to come...

Client Spotlight - Germain Kirk

Germain Kirk is an online designer, developer, and consultant based in Scottsdale, Arizona. Through his company, KirkInteractive, Germain offers small and mid-sized businessess and organizations professional web site design, doman and hosting plans, E-mail marketing, Search Engine Optimization (SEO), consultation, analytics, and site management services. Germain has been involved with internet services for more than 13 years, starting when he was in college at the University of Washington in Seattle. Since then he has worked with inline properties in the broadscast TV industry in Washington state and Arizona- most recently at 3TV KTVK as the Site Master for AZfamily.com

Currently, Germain is a national online consultant for Cox Communication (www.cox.com) and also does online consultation and web development for the Metro Phoenix Parternship for Arts & Culture. If you are interested in any online services, you can email Germain at germain@kirk-interactive.com, call at 1-888-335-3439 or visit www.kirk-interactive.com.

Homebuyer Tax Credit - It is No Longer Just for First Time Buyers

On November 6, 2009, President Obama signed into law the “Worker, Homeownership, and Business Assistance Act of 2009.” The new law extends and generally liberalizes the tax credit for first-time homebuyers and includes some restrictions to prevent abuse of the credit. What can this mean for you? The new law will make it easier for you to buy or sell a home and aims to improve the real estate markets. Best of all, the changes can be a tax-saving tool!

Here are the facts about the revised homebuyer credit:

· Deadline Extended. Previously, the homebuyer credit applied only to purchases after April 8, 2008 and before December 1, 2009. Now the homebuyer credit is extended to apply to a principal resident bought before May, 1, 2010. Additionally, homebuyers can use the credit if they bought a principal residence before July 1, 2010 if they entered a written contract before May 1, 2010. With the extra months available, homebuyers can apply the credit if they find a home they like but cannot close on it before May 1, 2010.

· “Long-Time Resident” Credit. The homebuyer credit no longer applies to first time home purchases. If you maintained the same principal residence for any period of five consecutive years during the eight years ending on the date that you buy the subsequent principal residence, you can claim credit of up to $6,500. In order to qualify, you do not need to sell your current home; rather you can buy the replacement home to meet the new deadlines.

· Now available to higher-income taxpayers. The homebuyer credit phases out over higher levels of modified AGI, range is between $125,000 and $145,000.· New home-price limit for the homebuyer credit. The homebuyer credit cannot be claimed for a home if its purchase price exceeds $800,000.

The restrictions:

· Settlement Statement. The homebuyer credit cannot be claimed unless the taxpayer attaches the settlement statement to the return.

Please call us today to find out how you can benefit from the homebuyer credit!

1099's

1099's are due to be sent to recipients no later than January 31, 2010! There are just 20 days left and counting...

Do you need to prepare and file 1099's?

If you paid more than $600 to any individual, LLC or partnership for rent or services provided to your business during 2009, then you must send that individual a 1099. You must also file all copies of Forms 1099 with the IRS, along with cover sheet, Form 1096 by February 28, 2010.

Examples of Rent/Service Providers...

1. Contract Laborers
2. Subcontractors
3. Marketing Services
4. Accountants/Bookkeepers
5. Attorneys
6. Janitorial Services
7. Consulting Services
8. Landlords

What information do you need from the service provider?

You will need the full name of the individual or business, the address and the individual or business' Taxpayer (Employer) Identification Number, along with the amount that you paid to that provider during 2009.

Do you need help in preparing your Forms 1099?

eeCPA is here to help...
1. We will gather the information from you.
2. We will prepare all of the forms and mail them to the recipients by the deadline.
3. We will file the government forms electronically on your behalf.
4. We will send you copies of all of the forms and a summary report once the filings have been completed.


If you provide us with the information that we need, we will charge you just $25 per 1099.

If we need to gather the information from your accounting files and determine the filing requirements, then we will charge you based upon our standard hourly rates.


Why should you file Forms 1099 timely?

The #1 reason to file your Forms 1099 timely is to preserve the deductibility of your expenses.

For example, I had a client that paid several laborers $3,000-5,000 each. He did not file 1099's to report the payments that he made to these laborers because the laborers did not want to report the earnings. Then, when he was audited several years later, the IRS denied the deductions for several thousands of dollars, limiting the deduction to $600 per laborer. Thus, the taxpayer then was forced to pay the tax on the majority of the expenses that he rightfully incurred to operate his business. Rather than the laborers paying the taxes on their earnings, he was forced to pay the taxes on the monies that he paid out to them, plus penalties and interest.

Secondly, you want to file the 1099's timely to avoid the penalties for late and/or incomplete filings. The penalties range from $15-50 per 1099 Form if not filed, filed late or incorrectly filed.


Tips to make the 1099 process less painless for 2010...

Have all of your service providers complete a Form W-9 prior to making payment to them. That way they have incentive to complete and return the form to you, and you have all of the information that you need when it comes time to prepare your 2010 Forms 1099. You may download a copy of Form W-9 directly from our website...on the forms page.