Look Away From The Fiscal Cliff!
More recent information on Obamacare is here.
We know many PDFFiller customers are small business owners and that the lack of resolution in Washington about how to avoid “the fiscal cliff” is adding an extra level of stress to your preparations for the upcoming tax season.
With only 19 days left in 2012, it is still not clear whether the Bush-era tax exemptions will expire for those with incomes of $250,000 or more. So we thought now would be a good time to shift focus away from the yawning fiscal abyss, and towards something more pleasant!
There is a relatively new tax credit for small businesses that we want to make sure you are all claiming if you can.
Do you have 10-25 employees? Do you offer them a health insurance policy? If you do, you may be eligible to recover 35% of your costs involved in providing this insurance for 2012. In fact, you can claim this credit retroactively, back to 2010 if you are eligible for it. This is an under-publicized feature of the Health Care Reform Act (also known as “Obamacare”.)
Terry Gardiner, Vice President of Policy & Strategy at Small Business Majority of Washington, DC explains the tax credit in more detail in this video.
Information about how to claim the credit and fill out Form 8941 is available on the IRS’s website. The IRS offers short video overviews of the Small Business Health Care Tax Credit in both English and Spanish and valuable Q&A’s that can help you understand how to use the credit to offset your Alternative Minimum Tax (AMT.)
According to New York Times blogger Rob Mandelbaum, small businesses are really not taking as much advantage of the credit as they could be. In a September 25, 2012 article, Mandelbaum reported that the US Treasury only gave away a one quarter of the funds set aside for this refund in 2011, because such a low percentage of the small businesses eligible for the credit claimed it. Mandelbaum blames the complexity of the filing involved.
IRS Form 8941 is a pretty complicated worksheet and many need the advising of an accountant to coordinate the information requested there with the General Business Credit form 3800 (or the 990-T in the case of non-profits,) where the credit is actually claimed. But if you are eligible for the credit, there are opportunities to claim the amount as a discount or exemption as well as a credit. In some cases, it can even be carried over from one year to another.
So try it out—review the resources mentioned here, and take a whack at filling out Form 8941 on PDFFiller.com—see if you qualify! It will keep you occupied while you wait for “Taxmaggedon” to blow over. Let us know how you fare. If you agree with the New York Times that the form is too complicated—tell us about your experience. Maybe we can invite a tax advisor to walk us through it here on the blog.