New York SBDC Research Network

Obtained from:   IRS Learning the A-Zs of taxes seems overwhelming. But with a little planning, research, and attention to detail, it can be easier than you think. Credits and deductions are an important part of the process—though sometimes it's difficult to tell them apart.  You s ubtract tax credits from the amount of tax you owe. There are two types of tax credits: A nonrefundable tax credit means you get a refund only up to the amount you owe. A refundable tax credit means you get a refund, even if it's more than what you owe. An example is  the Child Tax Credit. You s ubtract tax deductions from your income before you figure the amount of tax you owe.  Deductions, such as the Tuition and Fees Deduction for qualified education expenses, can help lower the amount of your taxable income

From Complete Payroll : The Work Opportunity Tax Credit (WOTC) is a tax credit the federal government provides to employers for hiring people who typically struggle to find employment. We're going to go over how WOTC works, the types of people employers can hire to become eligible for the credit, how the credits are calculated and how employers can apply for WOTC. To become eligible for the Work Opportunity Tax Credit, an employer would have to hire a qualifying member that meets at least one of the following criteria... Veteran Temporary Assistance for Needy Families (TANF) recipients Food stamp (SNAP) recipients Designated community residents (living in Empowerment Zones or Rural Renewal Counties) Vocational rehabilitation referrals Ex-felons Supplemental Security Income recipients Summer youth employees (living in Empowerment Zones) For more details on each of the target groups, and how to determine if an employee is eligible, check out this page from the United S

“I am proud to be paying taxes in the United States. The only thing is – I could be just as proud for half the money.” — Arthur Godfrey, entertainer With tax season among us it can become a chaotic time of the year for business owners. Provided is a surplus of articles to remedy the potential hectic  process,  easing you through what many business owners dread- lending you an extra hand. Get It Right The First Time:   Five Basic Tax Tips for New Businesses . Never Miss An Important Deadline Again:   IRS's free Tax Calendar for Businesses and the Self-Employed     Keep Up On The Latest Tax Code Changes:   changes for the 2015 tax year here .  Don't Leave Money On The Table:   frequently overlooked tax deductions and credits     taxe s and credits tool   Make Sure Your Returns Are Error-Free:   eight tax mistakes .  Avoid Getting Audited:   red flags that can trigger an audit   here's what to do .

In addition to 179d, the energy efficient building tax deduction, there are four green building incentives you should know about. These include the Business Energy Investment Tax Credit (ITC), MACRS — Modified Accelerated Cost Recovery System, Residential Energy Efficiency Tax Credits and Property Assessed Clean Energy (PACE) Financing. Read more from Poplar Network .

From the Small Business Administration . New taxpayers, such as recent graduates who’ve just entered the job market, probably have a clean tax slate. But seasoned taxpayers have a history that can impact their taxes going forward. Due to limitations and restrictions, some tax breaks cannot be fully used in the year in which they are generated but can be carried over and used in other years. Failing to know what these are and keep track of them wastes valuable tax breaks that can cost you money. Tax breaks subject to carryovers Dollar limits and other restrictions curtail write-offs for your current and past outlays. Here are some to note:

Most small businesses make charitable donations. In fact, surveys have shown that about 75 percent of small business owners donate some portion of their profits — about 6 percent on average — to charitable organizations each year. As we’re in the midst of the holiday season (and tax season looms), many small business owners are likely considering charitable contributions and wondering how such donations might impact the bottom line in terms of tax deductions. First, it’s important to choose the right charity and avoid certain pitfalls that could leave you in a bind. Read more from SBA.gov .

From the IRS : The American Taxpayer Relief Act of 2012 (ATRA) (H.R. 8) extends the Work Opportunity Tax Credit (WOTC) for hiring certain workers through Dec. 31, 2013. The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC), including adding new categories to the qualified veterans targeted group and expanding the WOTC to make a reduced credit available to tax-exempt organizations for hiring qualified veterans. The VOW Act also extended the WOTC for qualified veterans hired before Jan.1, 2013. The other targeted group categories were not extended by the VOW Act and expired for targeted group members other than qualified veterans hired after Dec.31, 2011. ATRA extends the WOTC for qualified veterans hired before Jan. 1, 2014. ATRA also extends the WOTC for targeted group members, other than qualified veterans, hired after Dec.31, 2011, and before Jan.1, 2014.

When filing your federal income tax return, you may deduct personal property losses that aren't covered by insurance or other reimbursements. Claim the losses as an itemized deduction using federal Form 4684, Casualty and Theft... Claiming the loss on an amended return for the prior year may result in an earlier refund, but waiting to claim the loss on the return for the year the loss occurred could result in greater tax savings, depending on other income factors. New York State follows the federal rules for casualty losses. As a resident taxpayer, you may claim the loss on your New York personal income tax return as an itemized deduction. You must use the same year you chose to claim the loss on your federal return. More here .

Segregated accounts Establish a segregated bank account for sales taxes. NYS Tax Department encourages all sales tax vendors to voluntarily establish a separate bank account for sales taxes that they collect on behalf of New York State to make it easier to comply with the tax law. To improve sales tax compliance, they can require certain sales tax vendors to deposit sales tax into a separate bank account. This tax law change was effective March 31, 2011. Sales Tax Filing Responsibilities A sales tax return is still required to be filed, if a registered vendor, did not collect any tax for the tax period in question. Vendor Collection Credit (currently at 5% of tax payable except monthly filers with a maximum of $200 ) Sales Taxes are trust taxes – A responsible person can be held personally liable for payment of taxes. If a business ceases doing business, they must file a final sales tax return and return the Certificate of Authority to the Department. Sales Tax Exemp

From the SBA PRESS OFFICE Administrator Karen Mills of the U.S. Small Business Administration has written an open letter to small business owners across the United States explaining immediate benefits available to small businesses as part of the Affordable Care Act. The full letter is available at http://www.sba.gov/acaletter/ - content is below: *** Dear Small Business Owner, For decades, access to affordable health insurance has been the number-one concern of small business owners. To help you address that concern and provide quality, affordable coverage for your employees, the new Affordable Care Act gives you a number of new tools and benefits . The most immediate benefit you should know about is the tax credit to help you pay for up to 35 percent of your employee premiums starting this tax year. An estimated 4 million small businesses may qualify for these tax credits, totaling about $40 billion over the next 10 years. Go here to learn more about the tax credit , including new in