Your Tax Question - 075

Dear John, I am considering starting a small business - what do you think?  Seriously, James
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Hi James, 


That is seriously a vague question.  While there is a thousand ways to go with that I will just say that I heartily approve.  The way that you set up your business needs to be considered because it will determine what rules you will have to follow while doing business and filing your taxes.  The more complicated the business the more you will need to follow the advice of an accountant, CPA, and or attorney.  Other than that, there is a lot of consideration so get ready to roll your sleeves up and have fun.


Best of luck,
John   

PS.  Please send me an email if you want to buy an hour or two of consultation. 

Your Tax Question - 045 (Part B)

(Continued from Your Tax Question - 045 (Part A))

I won't try to detail all of the items that are new in 2010 because of the Health care Act but I will point out some of the details that will affect most individual tax payers...

2010:

* Tanning Services Excise Tax - This is a 10% tax on all tanning services. As of July 1, 2010 owners of tanning service facilities are required to charge their customers a 10% sales tax on the tanning service and remit those monies quarterly to the IRS. If the business is a health facility that offers health and fitness services but allows its members to use tanning beds as part of the membership then there is no excise tax.

* Small Business Health Insurance Credit - For eligible small employers (ESE) who provide their employees with health insurance a credit may be available. An ESE must have no more than 25 full-time equivalent (FTE) employees [NOTE: A full-time employee is one who works 30 hrs a week for this credit] and an average of $50k per year annual salary per employee including the owner's wage. [Should this be called the Good Luck Small Business Health Insurance Credit?]

* Child Under 27 & Employer-Provider Health Insurance - It used to be that your children were allowed to be on your employer provided health insurance until they turned 24 so long as they were students in an accredited higher education program. Now, your child is allowed to be on your health insurance until the end of the year that they turn 27 years of age and they need only be your child - not even in school.

* Adoption Credit - Under the old law the maximum credit was $12,170 but under this plan the credit is increased by $1000 to $13,170.

While there are more changes to this and the details shared are more intensive than this I hope to have helped you see some of the changes that may effect you for this coming tax season. In Part C of this series I will share a little about the future proposed changes for 2011 and beyond.

John