How to Get Tax Credits as a Small Business Owner

Last month, we went over the basics of how the new health care law would affect businesses in general. Now, we are going to go into a little more detail about how the health care law will change, improve, and encourage small business owners to provide health care for their employees.

The good news is that small business owners will not only attract a better worker by providing benefits, but they will also be able to receive money back on their tax return. This blog post will also include some general methods designed to help small business owners get tax credits. It is also the first in a series of blog posts all pertaining to the health care bill.

Offering Health Benefits

Now more than ever before, there is a more appealing reason for offering employees health benefits. You can write these benefits off your taxes provided your small business meets specific criteria. It could mean that your business receives 35% of your employee's premium back in tax credits.

Here are some guidelines to follow, but you can find more detailed information on the IRS website:  

·         You must cover at least 50% of the health care costs for your employees.

·         You need to have fewer than 25 full-time employees to qualify as a small business and thus qualify for the tax credits.

·         The average annual wages of your employees must be less than $50,000 a year.

If you meet these requirements, then you are well on your way to being able to write off your employee health care fees and receive 35% of what you paid back.

These requirements are based off of the current Small Business Health Care Tax Credit Act and are valid until 2013, but once 2013 hits, things only get better.

Thanks to the new health care legislation that will be enacted in 2014 you will be eligible to receive up to 50% of the annual premium back -- just another reason to provide health care to your employees.

A Few Tax Write-Off Tips

Running a business can be pricey with costs adding up seemingly faster than the revenues. Luckily, there is something you can do to help get some of that money back. For starters, keep all of your receipts.

For example, if you control a fleet of service trucks, the money you spend on gas is a tax write-off. Buying office supplies, such as forms and paper clips, are all write-offs. Your receipts will be a way to calculate all these tax savings so that you can get more back and reinvest that in providing the best possible benefits.