It is tax season, and while much of spring is spent discussing what must be paid out in taxes, it is also a great time to take advantage of savings opportunities.
For small businesses, one of the greatest expenditures, healthcare, can now offer additional savings this tax season. The Affordable Care Act (enacted March 2010) intends to help small businesses and tax-exempt organizations afford the cost of providing healthcare to their employees. In particular, the credit is focused on helping employers with low and moderate income workers, and encouraging employers to offer health insurance for the first time or maintain the coverage that they already have.
The Small Business Healthcare Tax Credit provides a credit worth up to 35% of eligible small businesses’ premium costs through 2013. Even if a business did not owe tax in 2011, the credit can be carried back or forward for other tax years. Non-profits are also eligible to receive a tax credit of up to 25% of the cost of the organization’s premium through 2013. Even if a business has no taxable income, they may be eligible to receive the credit as a refund. This is particularly beneficial to tax-exempt organizations. In 2014, the rate increases to 50% for small businesses and 35% for non-profits.
To be eligible, a business or tax-exempt organization must meet the following requirements:
- The employer must cover at least 50% of the premium for healthcare coverage based on the single employee-only rate.
- The employer must have less than the equivalent of 25 full-time workers (for example, an employee with fewer than 50 half-time workers may be eligible).
- The employer must pay average annual wages below $50,000. The credit will gradually phase out for businesses with average wages between $25,000 and $50,000.
Continue Reading Healthcare Tax Credit for Small Businesses and Tax-Exempt Organizations
In the past few months, Pennsylvania has experienced several tragic losses of teenagers through vehicle crashes. Unfortunately, most of us can think of one specific accident that hit close to home. Maybe it was a group of teens in a nearby town, from the local high school, or a friend or family member. If it seems to happen all too often, that is because it does. Motor vehicle crashes are the leading cause of death among 16 to 20-year-olds.
A few months ago I participated in a presentation in conjunction with Edward Jones called Key Life Decisions: Are You Prepared? I spoke about estate planning documents, such as wills, financial powers of attorney and living wills. One of the topics covered by another presenter was long-term care insurance. After the presentation it became clear to me that individuals might not be aware how long-term care can affect their estate planning wishes, and more importantly, cause their estate planning to not be carried out because assets are not left over after the cost of long-term care is paid.
Estate planning is something most people know is important but it’s often something that they put off for a later date, likely because it brings with it unpleasant thoughts about disability and death, but also because of misconceptions about what happens if you die without a will. Some people think that if they die without a will their property will automatically pass to their spouse, which is what many people want, and for that reason they don’t think a will is necessary. Others think that if they don’t have a will the state will take all of their property. Both of these scenarios are usually not true.