Small-business owners have been operating in survival mode for at least a year – most of us have been there a little longer.  This means that all employees have been busier than ever.  It’s easy to miss important changes that affect us little folks when everyone is busy trying to manage their ever growing workload.  Here are some up and coming changes that might affect you:

• IRS Increasing Staff for Small-Business Owners.  Let’s start with the disappointing news.  For the past 5 years, the IRS has been decreasing time spent on auditing the big boys (corporations with assets greater than $250M) and increasing their time auditing the little guys (businesses with less than $10M in assets).  So be sure that you are dotting your i’s and crossing your t’s and are working with a tax professional that you trust.  For more details please see this article from Forbes.

• IRS Cracking Down On Internships.  Do you have unpaid interns?  If so, you might want to double check to make sure that you comply with the six federal criteria.  This is a hot new priority of the IRS, and remember, they are investing more in auditing small-businesses so be sure that you are in compliance.  Here is the full length article from The New York Times.

• No Credit Card Reform for Small Businesses.  Since we started off on the wrong foot, let’s keep going.  I promise, there is good news to come.   Even though, on February 22, consumers got some relief from credit card companies, such as no longer being able to raise rates on existing balances, small business cards were exempt from this.  The Credit Card Accountability, Responsibility + Disclosure (CARD) Act did little to help the fast emerging market of business credit cards.  So be sure to spend wisely and use your credit cards sparingly.  For more information visit this article we found in BusinessWeek.

• A New Tax Credit for Health Insurance Premiums.  We wouldn’t touch the debate on the health care reform with a 10 foot pole.  But it’s here, so let’s focus on how it might have an immediate effect on your business.  There is a new tax credit for 2010 to help offset insurance premiums.  Keep your eye out for a mailer from the IRS that defines the terms, and remember the first note above and be sure to follow the guidelines!  If you have fewer than 10 employees with an average salary of $25,000 you may qualify for a credit of $24,500.  The tax credit works on a sliding scale and we are keeping a lookout for more details.  Here is a more thorough article about this from CNN.

Now, I know everyone remembers the difference between a credit and a deduction from Accounting 101, right?  Well, if not a deduction counts against your adjusted gross income and thus reduces your taxable income.  But a tax credit is a dollar for dollar reduction in the taxes you owe.

• Tax Benefits for Companies who Hire and Retain Unemployed Workers.  If you hire unemployed workers after February 13, 2010 and before January 1, 2011 and retain them for at least one year you can qualify for a tax credit of at least $1,000.  You will also receive a 6.2% payroll tax incentive which will basically offset the employer’s share of social-security wages.  Please visit the IRS’s website for more details.

These are just a few of the changes for small-businesses that have caught our eye over the past couple of months.  Be sure to keep your eyes and ears open for more changes that could affect you!

Tags: Credit Card Reform, IRS audits, IRS focus on small-businesses, Small-business help, Tax Credit for Health Insurance premiums, Unpaid Interns

Posted by: Rachelle McClure in Industry News