Small Business Accounting Services Simplifies your Business Processes
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Any business irrespective of size has different requirements and business strategies for the management of its businesses. Whether it is a small, medium or a large scale business, its sole purpose is to make more profits and less losses. And to add to that handling accounts, transactions and other financial details is not and easy task but with the services of small business accounting services these can be achievable. Hence, to take its services is a good idea as it reduces botwork force and monetary burden of the client.
Small business accounting provides customized solutions to suit your business needs and if you are owner or for that matter am manager who have perfect knowledge of accounting and bookkeeping, then rest easy as with the help of small business accounting your business can grow by leaps and bounds. Sometimes running a small business can become overwhelming at times and this is why small business accounting services are profitable in the long run. It also offers accounting software that eases the whole process of making records and tallying them over and over again. However, we also know that most of the small business owners or for that matter any other business owner is not a qualified accountant, and that is why they need to hire the services of a professional to handle this. And small business accounting services is the right choice as it not only reduces time but also personnel resources.
Small business accounting services have professionals who specialize in providing business accounting services to clients. The only thing you need to do here is to hire a person from it for your business needs. The accountant will handle the small business accounting work of your business. But just make sure that from time to time you oversee the work is being carried out by the small business accounting services professional. As the business owner, you will like to be informed about all the work that is being done with regard to accounting and bookkeeping of your business, so that you know where your business is heading and if you are making any profits or not.
The importance of having well maintained accounts makes your life much easier during the tax paying season. Everyone has to pay taxes and you must make sure that you have all the calculations done properly before the season approaches. Surely you do not want to hurry things in the last moment and in the process end up doing major blunders. The whole purpose of having a professional from small business accounting services will make things easier for you, so that you pay your tax on time. Besides taxes, the accountant also keeps a transparent record of all the financial transactions that has been undertaken for your business, so that you can implement newer business strategies. It also helps in preparing a daily report on the regular transactions and the client is updated through online file transfers. Small business accounting services additionally provides the business with a transparency that gives it a good reputation among investors, shareholders and even the general public.
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Small Business Tax Implications of Health Care Reform For 2010
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On March 23, 2010 President Obama signed into law one of the largest and most controversial pieces of legislation called the Patient Affordable Care Act (aka Health Care Reform Bill). This new legislation is so complex that it will take nearly eight years to fully implement. The first stage takes effect in 2010 with four distinct provisions. This article will address one of those provisions, The Small Business Tax Credit.
Beginning January 1, 2010, small businesses who contribute 50% or more toward their employees health
insurance premiums for are eligible for a non-refundable small business income tax credit. This provision creates two classes of employers:
1. Eligible small employers and
2. Large employers.
Eligible small employers are defined as employers with 25 or fewer full-time employees with average annual wages of ,000 or less. Everyone else exceeding these thresholds is, by default, a large employer and not eligible for the credit.
Full-Time Employees:
To determine the number of eligible full-time employees (FTE), an employer must divide total hours worked by all employees by 2,080. Total hours worked by employees cannot include hours worked by any employee that exceeds 2,080 hours for the year. Thus, overtime is excluded from the calculation of total hours. 5% owners and 2% S Corporation shareholders are not considered employees for purposes of the full-time employee calculation.
Average Annual Wages:
To determine the average annual wage base, an employer must divide total wages paid to employees during the year by the total number of full-time employees (from previous calculation). 5% owners and 2% S Corporation shareholders are not considered employees for purposes of the average annual wage base calculation.
Calculation of the Non-Refundable Income Tax Credit:
A maximum non-refundable income tax credit of 35% will be available only to employers with 10 or fewer full-time employees and average annual wages of ,000 or less. This credit is applied to the employer’s share of health insurance premiums and this dollar amount is the credit that is applied against business income tax (or passed through to partners or S Corporation shareholders). The amount of the credit utilized to reduce income tax reduces the employer’s health insurance deduction for the year.
These are the two baselines for the credit:
10 full-time employees and
,000 in average annual wages.
As the number of FTEs rise above 10 and/or the average annual wage base rises above ,000, the credit quickly disappears. This is known as a phase-out, and because of the complexity of the formula to determine an employer’s eligible credit, a table was created to make it easier to compute the eligible credit. For example, if an employer has 11 FTEs with an average annual wage base of ,000, the credit is 33%. For each additional FTE above 10, the credit is reduced by 2%. If an employer has 10 FTEs with an average annual base exceeding ,000, but not exceeding ,000, the credit is 28%. The credit is reduced by 7% as the average annual wage base exceeds the ,000, ,000, ,000, ,000 and ,000 average annual wage base table amount. If you use the tables, the credit is 0% once the total number of full-time employees exceed 24.9 or once the average annual wage exceeds ,999.
Other Rules:
1. Aggregation rules apply, which means affiliated companies must be aggregated in determining eligibility, the number of full-time employees and average annual wage base.
2. The credit may be applied against regular income tax and alternative minimum tax.
3. If an eligible small business employer qualifies for the credit but cannot use the credit in the current year, they may carry the credit back one year to use against the prior year’s income tax.
There is also a credit for non-profit organizations of 25%. This credit, unlike the 35% business credit, may be used to reduce the Medicare portion of payroll taxes (Form 941 will have a line item for this credit).
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This excerpt from the popular video learning series at BusinessBuffet.com introduces some core concepts about bookkeeping for small business.
This video was embeded at Bookkeeping Services of Charlotte, NC
