Still Working on Your Small Business Taxes? These Updates Might Inspire You

The old adage “time marches on” never seems more true than during tax season, especially during the last weeks when your docs are due.For small business owners and entrepreneurs still scrambling to complete their taxes, this roundup of legal advisories might help:

New IRS Requirements for Electronic Furnishing of Schedules K-1 (Ropes & Gray LLP)

“On February 13, 2012, the Internal Revenue Service issued new requirements that a partnership must meet in order to provide its partners with Schedules K-1 exclusively in an electronic format. Notably, pursuant to these requirements, a partner must first provide affirmative consent to receive its Schedules K-1 exclusively in an electronic format. In addition, the IRS now requires that a partnership provide its partners with a set of specific disclosures prior to or in the statement requesting the partners’ consent.” Read on»

Claim your Healthcare Tax Credit (Darrin Mish)

“If you are a business owner, you could be paying more taxes than you should if you do not take advantage of the healthcare tax credit. This tax credit is granted to employers who provide health insurance coverage to their employees under certain conditions stipulated in the recently-revamped Small Business Health Care Tax Credit page on the IRS website. At this page, you will find all the information you need about this credit – whether your business qualifies to claim it, examples of how you can save on taxes under various scenarios, FAQs, a YouTube video and a webinar.” Read on»

IRS Offers New Help to Struggling Taxpayers – Fresh Start for Federal Tax Liens (Fein, Such, Kahn & Shepard, P.C.)

“Tough times are all around, and apparently the IRS recognizes this as well.  The IRS recently announced a series of new initiatives to ‘to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers.’ The changes center around how the IRS files liens against taxpayers for failure to pay their taxes, and include 5 key provisions…” Read on»

Tips on Independent Contractor Tax Compliance (Joseph Donegan)

“While there are many issues connected with protecting the employer in dealing with independent contractors, a few important issues exist concerning the issuance of 1099s… Forms 1099-MISC filed electronically must be submitted to the IRS by April 2, 2012.” Read on» 

DOL Initiatives to Crackdown on Employee Misclassifications (Potter Anderson & Corroon LLP)

“In one of the most noteworthy collaborations of 2011, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) announced that they would join forces to combat worker misclassification. Specifically, the merging of resources of these powerful federal agencies is designed to crackdown on instances of employers misclassifying workers as independent contractors as opposed to employees. The collaboration resulted after a recent Government Accountability Office (GAO) report found that the IRS is losing billions of dollars due to misclassification.” Read on»

Transfers of Personal Goodwill to Avoid Double Taxation (Sheehan Phinney Bass + Green PA)

“The most significant potential downside to operating as a C corporation arises, however, when the business is sold. Because there is no corporate-level capital gain rate, the effective federal income tax rate on a sale of C corporation assets followed by a liquidation of the corporation is approximately 45%. In contrast, the federal income tax rate in the case of an asset sale by a flow-through entity (an S corporation without built-in gain issues, a partnership or an LLC taxed as a partnership) is 15% in the case of assets qualifying for long-term capital gain treatment. The 30% rate differential generally is higher when state income taxes are taken into account.” Read on»

I Just Started a New Business, How Do I Avoid Tax Trouble? (Davis, Brown, Koehn, Shors & Roberts, P.C.)

“If you receive income from your business that is not subject to withholding, you may be required to pay estimated income tax at both the federal and state level.  Typically this applies to self-employed individuals or individuals that receive large amounts of interest, dividends, capital gains, rents, royalties, business income, or farm income.” Read on»

Tax Primer for Filing your 2011 Taxes (Fein, Such, Kahn & Shepard, P.C.)

“The standard mileage rate increases to 51 cents per business mile driven (19 cents per mile driven for medical or moving purposes and 14 cents per mile driven in service of charitable organizations) for the first half of 2011. From July 1, 2011 to December 31, 2011 however, the rate increases to 55.5 cents per business mile. This increase is a special adjustment by the IRS and reflects higher gasoline prices.” Read on»

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