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What @CPAsteve says about New Hampshire business tax returns (Video)

CPAsteve explains how the Business Profit Tax, Business Enterprise Tax, and Interest/Dividends Tax all work in New Hampshire and whether your small business needs to be concerned about it.

 

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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Tax breaks when your New Hampshire Business meets disaster

Most small business owners are simply not prepared if disaster were to strike their business, whether it’s in New Hampshire or elsewhere. At least there are some tax breaks if disaster does strike, and that’s what we’ll discuss here.

 

Small businesses are particularly vulnerable to the effects of a catastrophic event such as a fire, flood, tornado, most recently landslides, or other natural disaster.  While business casualty and other types of insurance coverage are available, there will still be other losses that are not recoverable and leave your business facing a deficit.

 

Casualty covers a range of sudden, expected or unusual loss due to damage of property.  Some typical events can include natural disasters like hurricanes, as well as acts of vandalism, theft, car accidents and embezzlement. Events that are not deductible include deterioration due to age, weather, termites and drought.  Like any part of the tax code, there are a few exceptions including when a drought may be considered a casualty if the property damaged was used for a trade or business, or in a transaction for profit such as an investment in farmland,

 

Business inventory losses can be treated a few different ways.¬† According to¬†IRS Publication 584-B ‚Äď Business Casualty, Disaster, and Theft Loss Workbook, the loss can be considered as a casualty loss described above.¬† Conversely, the loss can be treated as part of the business‚Äô goods sold. The loss against goods sold may help to reduce the business‚Äô net income thereby reducing the amount of Self-Employment Contributions Act (SECA) taxes paid.

 

 

If the property was a total loss, then the value of the loss will depend on whether it was a business or personal property. If it was a business property, the calculation used must take the adjusted tax basis after the loss, minus any salvage value received. You’ll notice that FMV doesn’t come into the equation at all. Additionally, if more than one item was damaged by the casualty, each item must be calculated separately in order to take the deduction.

 

 

Once the calculations are done, be prepared to prove that your losses are: a) real (i.e. that you suffered a legitimate and provable loss), b) you had actual possession of the property, and c) any lack or insufficiency of reimbursement (typically by the insurance company) to cover the loss. ¬†That means that you‚Äôll want to keep receipts and considering that casualty usually involves some type of catastrophic event like a hurricane, keeping a digital off-site copy of receipts ‚Äėin the cloud‚Äô is a great way to ensure that you‚Äôll still have a safe, legal paper trail well after the event. Acceptable proof of theft can include witness reports from those who saw your property taken, police reports, and even newspaper accounts of the event.¬†

 

 

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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a¬†PASBA¬†member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in helping small business owners with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at¬†www.appletreebusiness.com/map.

Let us take on the complicated challenges of small business bookkeeping, payroll, and taxes for one fixed fee. Don’t be a small fish in a big pond. (VIDEO)

NH Small Business Owners Brace Yourself…Let’s talk Taxes in 2014

We have plenty of tax issues and challenges to reducing our taxes coming in 2014, particularly if you are a higher income taxpayer.

 

The following issues are concerns that may impact you and your company’s tax liability in the new year.

  • Small Business Health Insurance Credit ‚Äď The tax credit to small employers (25 or fewer equivalent full-time employees) that provide an affordable health insurance plan for their employees and supplement at least half the premiums, will increase to 50% of the employer‚Äôs contribution in 2014, up from 35% in 2013. For non-profit employers, the credit will be 35% in 2014.

 

  • Net Investment Income Tax ‚Äď As part of the Patient Protection & Affordable Care Act (the new health care legislation sometimes referred to as ‚ÄúObamacare‚ÄĚ), a new tax kicked in for 2013 and will continue in 2014 and beyond. It is a surtax levied on the net investment income of taxpayers in the higher-income brackets. And although it is perceived as an additional tax on higher-income taxpayers, it can affect even those who normally don‚Äôt have higher income if they have a large income from the sale of real estate, certain business assets, stocks, or other investments. This is on top of the 20% long-term capital gain tax rate now in effect for higher-income taxpayers.

 

  • Higher Tax Rates ‚Äď Prior to the increase in 2013, there were six tax brackets: 10, 15, 25, 28, 33, and 35%. Beginning in 2013 and continuing for future years, a new top rate of 39.6% has been added for higher-income taxpayers.

 

  • Higher Capital Gains Rates ‚Äď Beginning in 2013 and continuing for future years, the tax rate for long-term capital gains and qualified dividends has been increased to 20% (up from 15%) for taxpayers with incomes exceeding the threshold for their filing status.

 

  • Medical Adjusted Gross Income (AGI) Phase-out ‚Äď Beginning in 2013 and continuing for future years, a taxpayer‚Äôs medical deductions will be reduced by 10% of their AGI, up from the previous 7.5% (but the 7.5% continues to apply to seniors through 2016).

 

  • Possibility of Lower Expensing Deductions ‚Äď The Sec 179 business expensing allowance for business equipment drops from $500,000 per year to $25,000 in 2014 unless Congress extends the more liberal amount.(1)

 

  • Bonus Depreciation Expires ‚Äď Beginning in 2014, the 50% bonus depreciation for tangible business assets will expire unless Congress extends it.(1) This also reduces the first-year maximum depreciation deduction for business autos and small trucks.

 

  • Individual Insurance Mandate ‚Äď Beginning in 2014, the Patient Protection & Affordable Care Act will impose the new requirement that U.S. persons, with certain exceptions, have minimum essential health care insurance, or face a penalty.

 

  • Large Employer Mandatory Insurance Requirement ‚Äď Originally scheduled to begin in 2014 but delayed until 2015 because the government did not have the reporting mechanisms in place, large employers, generally those with 50 or more full-time equivalent employees in the prior calendar year.

 

  • Simplified Home Office Deduction ‚Äď Effective for tax years beginning in 2013 and continuing for 2014 and beyond, taxpayers can elect a simplified deduction for the business use of the taxpayer‚Äôs home. The deduction is $5 per square foot with a maximum square footage of 300. Thus, the maximum deduction is $1,500 per year. Eligibility qualifications are the same whether the simplified or regular deduction is claimed.

 

  • Increased Payroll and Self-Employment Tax ‚Äď As part of the new health care legislation, higher-income taxpayers are faced with an additional 0.9% health insurance (HI) tax. Starting in 2013, and continuing for future years, this surtax is imposed upon wage earners and self-employed taxpayers whose wage and self-employment income exceeds $250,000 for married taxpayers filing jointly ($125,000 if filing separately) and $200,000 for all others.

 

  • Pease Limitations ‚Äď The Pease limitation on itemized deductions that was reinstated in 2013 will continue for 2014. The Pease limitation phases out certain itemized deductions for higher-income taxpayers.

 

  • Phase-out of Exemptions – The phase-out of exemptions for higher-income taxpayers that was reinstated in 2013 continues for 2014.

 

  • Longer Depreciation Life for Leasehold and Restaurant Property ‚Äď The current 15-year depreciable life will increase to 39 years in 2014.(1).

 

  • Qualified Small Business Stock Gain Exclusion ‚Äď Beginning for qualified small business stock issued in 2014, the gain exclusion drops from 100% to 50%

 

  • Qualified Real Property Expensing ‚Äď Congress temporarily permitted the use of the Sec 179 expensing deduction to write off certain leasehold improvements, and restaurant and retail property improvements. Without Congressional intervention, this provision will no longer be available in 2014.

 

(1) Congress, a few years back, engaged in brinkmanship with last-minute tax changes. Normally, they have managed to finalize tax law by year’s end. However, for 2013, they adjourned without addressing the issue of extending many tax breaks that were set to expire at the end of 2013. It is not known if these tax provisions will be extended or not.

 

If you found this article useful, please do not keep this a secret. Share it with a friend.

 

Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Obamacare, oh my….New changes in Medical Tax Deductions

Beginning this tax year, 2014, the only medical expenses that you can deduct are those in excess of 10% of your adjusted gross income (AGI), up from the previous 7.5% AGI limitation. The limitation remains at 7.5% for taxpayers age 65 and over through 2016, unless they are subject to the alternative minimum tax, in which case it is 10% for them as well. For joint return filers not subject to the AMT, if either spouse is age 65 or older, the 7.5% of AGI limitation applies to their joint medical expenses.

 

If you don’t itemize your deductions or are nowhere near exceeding the AGI limitation, you need not concern yourself with this deduction. On the other hand, if you do itemize and think you might meet the AGI limitation, then it may be worth your time to summarize your medical expenses for the year. Use the following checklist to help you accumulate your deductible medical expenses. The list is by no means all-inclusive, and some of the deductions listed may have additional restrictions not included here.¬†

 

  • ¬†Ambulance
  • ¬†Artificial Limb
  • Artificial Teeth
  • Birth Control Pills
  • ¬†Braille Books and Magazines
  • ¬†Abortion, Legal
  • ¬†Acupuncture
  • ¬†Alcoholism Treatment
  • ¬†Chiropractor
  • ¬†Christian Science Practitioner
  • ¬†Contact Lenses
  • ¬†Crutches
  • ¬†Dental Treatment
  • ¬†Drug Addiction Treatment
  • ¬†Drugs (Prescription)
  • ¬†Eyeglasses
  • ¬†Fertility Enhancement
  • ¬†Guide Dog
  • ¬†Hearing Aids
  • ¬†Hospital Services
  • ¬†Impairment-Related Expenses
  • ¬†Insurance Premiums
  • ¬†Laboratory Fees
  • ¬†Laser Eye Surgery
  • ¬†Lead-based Paint Removal
  • ¬†Learning Disability Treatment Ôā∑ Medicare B & D Premiums
  • ¬†Medical Services
  • ¬†Medicines, Prescribed
  • ¬†Mentally Retarded, Special Home for
  • ¬†Nursing Home
  • ¬†Nursing Services
  • ¬†Operations
  • ¬†Optometrist
  • ¬†Organ Donors
  • ¬†Osteopath
  • ¬†Oxygen
  • ¬†Prosthesis
  • ¬†Psychiatric Care
  • ¬†Psychoanalysis
  • ¬†Psychologist
  • ¬†Special Schools and Education
  • ¬†Sterilization
  • ¬†Stop Smoking Programs
  • ¬†Surgery
  • ¬†Therapy
  • ¬†Vasectomy
  • ¬†Weight-loss Program
  • ¬†Wig (Cancer Patient)

 

Remember that just because your insurance will not cover a particular expense does not mean you can not take a tax deduction for it.

 

If you have questions related to your medical tax deductions please us a call.

 

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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

NH rules on Independent Contractors vs Employees

First, why do you care about whether your help is a sub or an employee? Because you can push the tax burden onto the contractor rather than deal with payroll and you can avoid having to pay workers compensation insurance on those contractors,  Or can you?

 

In a nutshell, here is what the state says:

In New Hampshire, the party you are HIRING is a subcontractor and NOT an employee if ALL of the following are TRUE:

1- The hired party possesses or has applied for a federal employer identification number or social security number

 

2- The hired party has control and discretion over the means and manner of performance of the work

 

3- The hired party has control over the time when the work is performed and the time of performance is not dictated by the employer. However, this shall not prohibit the employer from reaching an agreement with the person as to completion schedule, range of work hours, and maximum number of work hours to be provided, and in the case of entertainment, the time such entertainment is to be presented.

 

4- The hired party hires and pays the person’s assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants’ work.

 

5- The hired party holds himself or herself out to be in business for themself or is registered with the state as a business and the person has continuing or recurring business liabilities or obligations.

 

6- The hired party is responsible for satisfactory completion of work and may be held contractually responsible for failure to complete the work, AND

 

7- The hired party is not required to work exclusively for the employer.

 

 

Are you confident the people you are hiring qualify as Independent Contractors? We deal with issues like this all the time and can give you some really good advice on how to survive a challenge. Let us help you get confidence today.

 

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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Using a Payroll Service? Read this..

Many employers outsource their payroll and related tax duties to third-party payers such as payroll service providers (such as Appletree).

 

Reputable third-party payers can help employers streamline their business operations by collecting and timely depositing payroll taxes on the employer’s behalf and filing required payroll tax returns with state and federal authorities.

 

Here are some things you should know:

 

1) Are payroll taxes impounded by your payroll service, meaning are the tax monies pulled from your bank account and put into the payroll service’s bank account until due?

 

2) If you get a letter from the IRS about payroll taxes you believe you paid, you should contact the IRS YOURSELF; since this could indicate a much bigger problem.

 

3) Become familiar with the tax due dates that apply to employers of your size, try to keep track of these dates.

 

The key issue here is that you, the employer, are ultimately responsible for the payments even if the third party agent misappropriates the funds.

 

Are you certain about how your payroll taxes are being handled?

 

If you found this article useful, please do not keep this a secret. Share it with a friend.

 

Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Is your corporation really a hobby?

Wouldn’t it be great if you could deduct all the expenses for your hobby?

 

Well, unfortunately, you can only deduct losses on a hobby to the extent of your hobby income. But what happens if you decide to create a corporation for your hobby?

 

I have bad news. Operating the hobby activity within a corporation does NOT change the tax result.

 

Recently, a federal appellate court said that the net losses are not deductible. But, what’s even worse is that the owner of the corporation had dividend income based on the costs that the corporation incurred for the activity.

 

Make sure you understand the rules before you decide to deduct the expenses of your hobby.

 

If you found this article useful, please do not keep this a secret. Share it with a friend.

 

Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Can you get Health Care tax Credits?

Businesses with fewer than 25 employees that pay at least 50% of the health care insurance premiums for their employees may be eligible for a tax credit for as much as 35% of the cost of the premiums. To qualify, the business must employ fewer than 25 full-time people with average wages of less than $50,000. For 2014, the maximum credit increases to 50% of the premiums the company pays, though to qualify for the credit, the insurance must be purchased through SHOP (or a broker authorized to offer SHOP insurance that is in compliance with the Affordable Care act).

 

As a practical matter, we’ve found very few of our clients actually qualify for this, but when we find one client that qualifies, they’ll usually end up with¬† thousands of dollars in tax credits.

 

If you found this article useful, please do not keep this a secret. Share it with a friend.

 

Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.

Is your business pretax health plan now history?

Effective January 1, 2014, Businesses who DO NOT have a group insurance health plan set up for their business can no longer use a SECTION 125 employee plan for deducting qualified medical insurance premiums and expenses on a pre-tax basis. This doesn’t affect dental , vision, or dependent care expenses allowed in a 125 plan.

 

Are you confident on how to proceed from here? Confusion reigns!

 

If you want more information, look at Appletree Business Services’ Business Financial Confidence Map.¬†

 

If you found this article useful, please do not keep this a secret. Share it with a friend.

 

Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.