On to Healthcare Reform:
Small business owners check your mailbox over the next few weeks, the IRS will be mailing you a postcard. Their focus is to have small business owners claim the tax credit for providing health insurance. Some points regarding this reform:

• Businesses with 10 or fewer full time employees on payroll and average yearly wages of less than $25,000 will receive a credit for 35% of the plan’s cost or the average group premium for small companies in the employer’s state. This credit percentage rapidly decreases the more employees on the books and the higher the average salary per employee. E.g. 15 employees and average salary of $35,000 only achieves a 9% credit. New tables will be provided soon by the IRS.
  
  
• Several groups are excluded in the calculation which starts with total hours worked: Partners, proprietors, owners of S Corps, and 5% owners of C Corps. In addition, they have legislated out family members, kids, spouses, grandkids, nieces, nephews, aunts and uncles. Also not includes are seasonal employees who work for 120 days or less and overtime pay. The exclusion of these items makes it easier for a firm with many part-time employees to achieve the credit.
  
  
• Employers must contribute 50% or more towards the total premium in order to take the credit.
  
  
• Here’s the kicker – the credit reduces the amount of expense deduction allowed for health insurance so there is not a double benefit here. (So if you are already deducting all of the amounts you pay for employees health insurance, the credits don’t help you.)

As we receive details announcing the health care changes, I will discuss them in the newsletter. At this point, we are only discussing items that we are sure will effect 2010 tax liability. Be very careful when watching the media outlets, please call us at 803.547.7676 to schedule an appointment or email me directly with your questions if you would like to discuss any of these items further.