Get Your Business Ready for Tax Season
Tax time is here! Is your business prepared? As you gather all your documentation, there are a few things to consider, like these changes, which have gone into effect for the 2015 tax year:
Several existing tax provisions have been extended:
Gains from some small business stocks can be partially excluded. Aside from corporations, taxpayers can exclude half of their gains from selling or exchanging qualifying small business stocks that they’ve held for more than 5 years.
Section 179 can still be used this year. This allows for a $500,000 maximum deduction to cover the full cost of qualifying equipment and software purchases and leases. Likewise, small businesses can depreciate 50% of the cost of new equipment they purchased the previous tax year.
Improvements to leased properties, like certain restaurant and retail properties, can be amortized over 15 years.
Contributions of food inventory may qualify for enhanced charitable deductions.
Effects of the Affordable Care Act (ACA)
Here’s how ACA mandates may impact you and your business:
Insurance coverage requirements
Under the ACA, as you probably already know, you’re required to cover at least 95% of your full-time workers if you have at least 100 “full-time equivalent” employees (FTEs). Companies with between 50 and 99 FTEs must insure all of those employees. If the requirements are not met, your business will have to pay a per-month, per-employee tax penalty. (Companies with fewer than 50 employees aren’t required to offer insurance.)
Reporting of coverage
Form 1095-C (Health Coverage) needed to be provided to your employees at end of January, for last year. IRS copies need to be submitted to the IRS by the end of February (or end of March if you file electronically).
One way to save: HSA plans
With a high deductible health plan that offers HSAs for employees, you can pay lower monthly premiums. There are a few stipulations, including the minimum and maximum coverage amounts, which affect HSA qualification. You can find details in IRS Publication 969, or talk with a financial expert at Horizon Bank for some Sensible Advice on how best to approach these stipulations.
Have fewer than 25 FTEs, with all earning less than $50,000 in average annual wages? You may be eligible for certain tax breaks or credits – including reductions amounting to half or your paid premiums for the year.
Wondering what’s next?
From eliminating capital gains taxes on certain inherited small businesses, to enhancing deductions for start-up and other organizational expenses, there are plenty of new tax reforms being considered – and some are likely to have a positive result on you and your business. So stay in contact with your accountant or your Horizon Bank financial expert to stay on top of changes as they occur.
Talk to an expert!
To stay in accordance with the law, and to be sure you’re making the most of any tax benefits that relate to you, reach out to Horizon Bank, or be sure you meet with your business tax professional soon!