Small Businesses

The Internal Revenue Service  announced that interest rates for the calendar quarter beginning April 1, 2011, will increase by one percentage point. The rates will be: four (4) percent for overpayments (three (3) percent in the case of a corporation);  four (4) percent for underpayments; six (6) percent for large corporate underpayments; one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000. Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a ...

Who is Self-employeed? If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself self-employed and you would file Schedule C or Schedule C-EZ with your Form 1040.  Self-Employed: Don't Forget to Deduct Health Insurance Costs this Year For 2010, you can reduce your net self-employment income by the amount of your self-employed health insurance deduction on Form 1040. Self-Employment Tax If you are self-employed you must pay Self-Employement Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who ...

The Internal Revenue Service  issued the 2011 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 51 cents per mile for business miles driven 19 cents per mile driven for medical or moving purposes 14 cents per mile driven in service of charitable organizations A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under ...

Business owners and tax professionals have been advocating that the IRS begin accepting taxpayer records in electronic format instead of continuing to use traditional paper books and records for audits. The IRS has recently completed training for revenue agents on QuickBooks® Premier Accountant Edition 2010 software.  The IRS agents were trained and are now being encouraged to request and accept taxpayers’ QuickBooks files, as appropriate. The IRS is also able to accept electronic records from Peachtree® accounting software. Electronic files should be provided on a CD, DVD, or flash/jump drive to ensure security of the files. Obtaining the taxpayer's accounting records in ...

A crucial filing deadline of Oct. 15 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked.  Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program. The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its ...

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The Internal Revenue Service released a draft version of the form 8941 that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season.Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small ...

Q: What is the new hire retention credit and what does it apply to? A: This is a general business credit to encourage retention of the new hires.  The employer may claim the credit for each employee who is a qualified employee for purposes of the payroll tax exemption and who remains an employee for 52 consecutive weeks, provided that the employee’s pay does not decrease significantly in the second half of the year. The amount of the credit is the lesser of $1,000 or 6.2 percent of wages (as defined for income tax withholding purposes) paid by the employer to ...

Two New Tax Benefits Aid Employers Who Hire and Retain Unemployed Workers WASHINGTON — Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act enacted into law today. Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. ...