NASE on Micro-Business

Posts Tagged ‘taxes

The health care reform debate is constantly evolving.  Here are some of the week’s top health care headlines to help keep you up-to-date on what’s being said:

Healthcare Reform Debate Heats Up In The House (The Small Business Watchdog)
Power player, the House Ways and Means Committee, debates the idea of a public option.

Health reform FAQ: Cutting through the noise (CNN Money)
Confused about what health care reform would look like and how it would change your world? You’re not alone.

Little Known Info About the Self-Employed and Health Reform [Survey] (NASE on Micro-Business)

President Obama Comments on Self-Employed and Health Reform (ABC News)
His comments on the self-employed and health care reform start at the 4:00 mark of this video clip of the interview.

HHS Secretary Presses Congress on Health Care Reform, Rules Out Increased Deficit Spending (Fox News)
Health and Human Services Secretary Kathleen Sebelius told lawmakers Wednesday that President Barack Obama is willing to listen to suggestions on how to pay for a health care overhaul, as long as they don’t increase the deficit.

Bipartisan Health Bill Gets Cold Shoulder (Roll Call)
With President Barack Obama and lawmakers in both parties continuing to struggle for a bipartisan health care reform deal, sweeping legislation — pushed by a bipartisan Senate duo — that would fundamentally restructure the way Americans get their health insurance has been gathering dust.

Every time we ask the self-employed to tell us what’s on their mind, they don’t disappoint. This week, I’ve been knee-deep in efforts surrounding the recent release of our survey on the health reform perspectives of the self-employed.

Here are some cool tidbits I learned from the results (print version):

  • The self-employed are following the health care debate like hawks. When asked how many had heard the term “public option” in relation to discussions surrounding reform, two-thirds indicated they were familiar with the term, and of those, 71 percent identified it correctly as “a health insurance program run by the government and open to anyone in need of health coverage.”
  • The top two health tax proposals favored by micro-businesses are providing tax credits to businesses and the self-employed to offset health care costs and reforming the tax treatment of health coverage so that, regardless of whether health insurance is purchased individually or accessed through an employer, the worker receives the same tax benefits.
  • The majority of respondents were neutral on a recent suggestion of a cap on the employer exclusion. However, there were quite a few who strongly opposed such a cap.

The above figures are cool – in the Public Affairs department, we LOVE having stats to pass along to media – but I always enjoyed being able to wade through individual responses. Our response system is completely anonymous, and even though I can’t “put a face” to each comment, reading them always gives me a better understanding of what people out in the “real world” are thinking. Many survey respondents gave specific comments on the public option, mandates and other issues impacting the health care reform conversation. Here are just a few examples:

I do not think the government should become an insurer. I do think the government should regulate private insurers more.

I do not agree with the government mandating how businesses should run. They have been unsuccessful with their own budgets. What qualifies them to stipulate this to successful businesses?

Employers should not provide coverage. Let individuals subscribe to whatever plan they want and let employees take home money to purchase insurance instead of the employer purchasing for it for them. Individual needs are different.

I do not think the government should be able to pick and choose the businesses that are required to carry health insurance for their workers.

I would prefer that the government not be involved in providing my health care. However, I also cannot continue to provide health insurance on my own through private insurers if they continue to increase premiums at the current rate. If I could not afford private insurance, I would hope that there would be some other option rather than no insurance. If that is a government policy, then so be it.

NASE Members: Do you have a comment to add about health reform or any of the topics mentioned above? I’d love to hear from you. Just leave a note below, drop us a line on Twitter (@NASEtweets or @koberlander) or visit our Facebook sites (Group and Fan pages) to weigh in.

As part of February’s American Reinvestment and Recovery Act, eligibility for the work opportunity tax credit (WOTC) was expanded to unemployed veterans and unskilled younger workers.  The WOTC offers tax savings to businesses that hire workers belonging to any of 12 targeted groups, including unemployed veterans and unskilled younger workers.

Have you hired someone between January 1st, 2009 and July 17th, 2009 that qualifies you for the credit?  Make sure you submit Form 8850 before August 17th to request the required certification for these workers!

For more information, details and guidance, check out IRS.gov.

Just because tax season is over doesn’t mean the NASE is done thinking about taxes!  The NASE’s National Tax Advisor, Keith Hall, testified at the House Small Business Committee’s Subcommitee on Finance and Tax hearing on how tax code complexity hinders small business last week.

5.7 keith testimonyKeith testified before the committee in support of simplification of the tax code and the creation of a standard home office deduction.  Money quote:   

“The home office deduction is a prime example of a provision of the tax code that needs simplification. The forms and instructions are too complicated. The paperwork requires too much recordkeeping and takes too much time to complete. In addition, NASE Members expressed a substantial fear that claiming the deduction will trigger an IRS audit. All of these obstacles cause many home-based business owners, who qualify, to avoid the deduction altogether. The creation of a $1,500 standard home office deduction option as proposed in the “Home Office Deduction Simplification Act” (H.R. 1561) would address all of these barriers to utilizing the home office deduction. In fact, we found in a May 2008 online poll that over 60% of those home-based businesses who were not currently employing the home office deduction would do so if they were offered a standard deduction option.”

 

Watch Keith’s testimony on YouTube here.

Read the full text of Keith’s testimony here.

Find more information on the NASE’s positions on home office deduction simplification and legislative priorities here.

Here are some of the top small business articles and blog posts of the week so far:

·         You\’ve finally settled up with Uncle Sam. So what should you do with the extra cash? (CNN Money)

·         Obama Seeks To Root Out Credit Card Issuer Abuses (WaPo)

·         GM Plans Major Summer Shutdown (CNN Money)

·         Will Obama Blow It With Small Businesses? (The Journal Blog)

·         105 Absolutely Free Online Videos and Lectures (SmallBizBee)

·         New Health-Care Rule for Laid-Off Workers Hits Small Businesses (Ind Street)

Whether you file your micro-business return annually or quarterly, resist the urge to hide your tax documents in a drawer until your next filing date. NASE National Tax Advisor Keith Hall has these suggestions to help you get a jump on next year’s taxes:

·         Use the 2008 tax return as a road map for 2009 by studying what deductions you may have neglected, such as the home office deduction. Sole proprietors can use the NASE’s Schedule C Planning Tool to help them stay organized.

·         If you have a traditional IRA or SEP retirement account, consider making a contribution earlier in the year than you typically might. Then, watch as those dollars grow, tax-free.

·         Getting your child involved in the family business can really pay off. Your son or daughter could help clean the office, file, sort inventory, etc. Wages you pay will be tax deductible to your business and your child might learn something in the process. Look at it as a new business deduction on money that you are probably giving your child anyway!

 

In addition to tax.NASE.org, here are some great sites that will keep you informed throughout the year.

·         Internal Revenue Service: [http://www.irs.gov/ ]

·         Business.gov: The official business link to the federal government [http://www.business.gov/]

Check for hidden deductions: There are a number of deductions that small-business owners and the self-employed forget when filing taxes. If you work out of your home, your office may qualify for a deduction. Do you drive to the post office or a client site? Those miles may add up to a sizable deduction too.

 – Retirement Savings: Retirement savings, such as SEP contributions and IRA deposits, are deductible for last year’s tax return up until April 15, 2009. That means you can count money deposited into these accounts, up until the day you file your 2008 tax return. In the case of SEP contributions, those can even be made up until an extended due date, as late as October 15th.

 – Filing Date: If, despite all your rushing around, you still can’t make the April deadline, relax. All tax filers can get an automatic 6-month extension by filing Form 4868 by April 15th, which you can download from the IRS Web site at http://www.irs.gov/. However, an extension of time to file is not an extension to pay. If you do not send the IRS what you think you owe, you’ll be stuck with late fees and interest.

 – Proofread the form: Most of the mistakes on tax returns are simple addition and subtraction errors. Check your math. Then, check your math again.

 – Start thinking about next year: While micro-business owners may be tempted to finish their return and not think about taxes again until next year, now is a great time to reflect on how to reduce your 2009 tax liability. Consider deductions for a home office or employing your children; create a health reimbursement arrangement, which would enable the business to reimburse bona fide employees for all out of pocket medical expenses; reconsider the tax implications of incorporating your business; and research retirement plans designed specifically for the self-employed, including an IRA, SIMPLE, SEP, Single 401(k), and Keogh plan.

 – Look for help: Sole proprietors doing their own taxes can find help from a number of sources, including the NASE’s Tax Resource Center [tax.NASE.org], where you can ask the NASE’s expert CPAs a question and hear back within a few business days. You can find Schedule C from A to Z, a line-by-line guide for completing the tax form Schedule C, available online at http://www.nase.org/. The IRS also offers a Web site (http://www.irs.gov/) and toll-free help line, 1-800-829-1040, for your tax questions.


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