Tax advice for Floridians and businesses
With fewer tax-cut expirations on the horizon, there's less uncertainty. High-wage earners are facing higher taxes.
» Hire: Business owners can receive tax breaks for hiring people who face barriers to employment, including certain military veterans, food stamp and welfare recipients and ex-felons, under the Work Opportunity Tax Credit. For each long-term unemployed worker hired, the business owner receives a credit of up to $9,600. Tax attorney John Crawford, who works in the Jacksonville office of MarksGray, says business owners should keep this credit in mind if they plan to hire in the fourth quarter. The credits for hiring military veterans will expire by the end of the year, along with other credits. "It's best to hire this year when the credit is there," Crawford says.
» Buying: Consider purchasing equipment. A tax break that allows businesses to deduct up to $500,000 of the cost of new and used equipment, such as computers or furniture, and a bonus depreciation deduction of 50% of the cost of new equipment, may be expiring at the end of the year. "If you are looking at redoing your computer systems or acquiring some new machinery, you might want to buy it this year and get that deduction," says Michele Lipson, a partner at Marcum LLP's Tax and Business Services division in Miami.
» Health Care: Plan for rising health insurance costs as the Affordable Care Act is implemented. Even though large employers no longer are mandated to provide health insurance to full-time employees until 2015, Jennifer Spooner, a partner and director of tax service at accounting firm Cross, Fernandez & Riley, says businesses need to be aware of what the Affordable Care Act means for them.
» Retirement Savings: Self-employed or small-business owners have access to a special retirement savings plan called a Simplified Employee Pension (SEP) plan. Capital Analysts of Jacksonville President Bruce Ogier urges small-business owners to consider using the fund to save for retirement. Owners can set up SEP plans for employees and themselves. The tax-deductible contribution limits are far greater. For instance, for a defined contribution plan, the business owner can make a tax-deductible contribution up to 25% of net earnings, or up to $51,000. For a defined-benefit plan, the owner can make tax-deductible contributions up to $205,000.