The 2010 tax season is over, but if your smart, you’re always thinking about next year’s taxes. This year has been bad for most businesses and experts predict this trend will continue. You can’t do much about the economy but you can take control of your taxes. So, here are some tax tips to consider for the 2010 tax year.

Estimated tax payments
As far as tax planning goes, knowing where you’ve been can help you get to where you want to go. This is especially true if you’re self-employed. In other words, seeing how you came out on your last tax return can alert you to changes you need to make to minimize your tax burden next time. For example, if you underpaid your estimated taxes and were assessed a penalty, or if you overpaid your taxes and got a huge refund, you should adjust your estimated tax payments for this year accordingly. Get on the ball now. The second installment of your estimated payments is due this month–June 15. To figure out how much you should be paying, talk to your tax professional.

Tax credits
Tax credits reduce your tax liability. Here are some to take advantage of.

Health-care reform
Small businesses and tax-exempt organizations can get tax relief offered in the new Small Business Health Care Tax Credit. Small businesses that have fewer than 25 full-time-equivalent employees with average wages of less than $50,000, and that pay at least half of individual health-care coverage costs, will be eligible for credits of up to 35 percent of their share of health-care premiums. This credit is retroactive to the beginning of 2010 and is in effect through 2013. Businesses with 10 full-time-equivalent employees making an annual average of less than $25,000 will receive the maximum credit. Those with more staff members with higher salaries will receive progressively less. Exactly how this credit will play out is yet to be seen; look for the “how-to” in claiming this credit.

Green Businesses
Businesses that make changes in their energy systems can get sizable federal tax credits. Installing a solar water heater, for example, could qualify a business for a tax credit of 30 percent of the cost. But a more significant incentive is the Energy Efficient Commercial Buildings Deduction. Although it is a deduction and not a dollar-for-dollar credit, there is still potential for saving big bucks. By modifying things such as lighting, HVAC systems and other parts of a building to improve energy efficiency, companies could qualify for a deduction of up to $1.80 per square foot of commercial building space. So the owner of a 100,000-square-foot building could receive a one-time, $180,000 federal tax deduction.

Work Opportunity Tax Credit
With so many unemployed people out there, if your business is in a position to hire, do it. You can get the Work Opportunity Tax Credit for hiring people who typically have a hard time finding and keeping gainful work, such as low-income ex-felons, disadvantaged youths and veterans, or those who receive food stamps or supplemental Social Security income benefits. The credit equals 40 percent of the first $6,000 of an employee’s wages for the first year of employment, as long as he or she has worked at least 180 days or at least 400 hours. The rate is 25 percent for fewer than 400 hours, but there’s no credit for an employee who works fewer than 120 hours. To qualify for the credit, you have to file a special form with the state workforce agency, which will certify that the worker is eligible for the credit.

Tax season is really never over and it makes business sense to think about tax planning throughout the year.

Did you know the IRS offers tax help to taxpayers with unresolved tax issues? The IRS’s Taxpayer Advocate Service (TAS), an independent organization within the IRS, provides assistance to taxpayers trying to resolve on-going tax problems or looking for answers to their tax questions.

To qualify for the Taxpayer Advocate Service, taxpayers must be experiencing economic harm or significant cost, haven’t resolved their tax within 30 days, haven’t had their tax issues resolved by the date promised by the IRS, or believe that an IRS procedure is not working as it should.

The Taxpayer Advocate Service is your voice at the IRS. The service is free, confidential and personalized, and tax help is available to businesses and individuals.

TAS employees are tax professionals who know how the IRS works and how to navigate it. They will listen to your tax problem, help you understand what needs to be done to resolve it, and see you through the entire process, until your tax problem is resolved.

To resolve your tax issues or just get tax help, find your local IRS taxpayer advocate online or by phone at 1-877-777-4778.

You can learn about your rights and responsibilities as a taxpayer with the IRS tax tool kit.

source: irs.gov

The IRS is hosting a “Tax Help” Open House this weekend. The Internal Revenue Service has announced that on Saturday, June 5, 2010, IRS offices in all 50 states will be open to provide free tax help to individual taxpayers. Approximately 200 IRS offices, at least one in every state, will participate. Each office will be open from 9:00 a.m. until 2:00 p.m. local time.

The IRS Tax Centers will provide assistance to taxpayers dealing with notices and payments, tax return preparation, and other tax related issues.
Take advantage of the free tax help from the IRS and get answers to your tax questions.

Find the participating IRS tax offices in your state.

source: irs.gov

Starting in 2010, small businesses and tax-exempt organizations can get tax relief offered by the new Small Business Health Care Tax Credit. This tax credit, signed into law by President Obama earlier this year, takes effect beginning in the tax year 2010. It is designed to help small businesses and small tax-exempt organizations afford the cost of covering their employees.

“We want to make sure small employers across the nation realize that — effective this tax year — they may be eligible for a valuable new tax credit. Our postcard mailing — which is targeted at small employers — is intended to get the attention of small employers and encourage them to find out more,” IRS Commissioner Doug Shulman said. “We urge every small employer to take advantage of this credit if they qualify.”

The tax credit is available to small businesses that pay at least half the cost of single coverage for their employees in 2010. It was created specifically to offer tax help to small businesses and tax-exempt organizations that primarily employ low and moderate-income workers.

Below are specifics and answers to tax questions you may have about the tax credit:

Eligibility Rules
To qualify for this tax relief, small businesses and tax-exempt organizations must meet certain eligibility rules pertaining to the percentage of health care costs they provide, the firm size and average annual wage of it’s employees. The specific eligibility rules are as follows:

• Health care coverage
  A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• Firm size
  A qualifying employer must have less than the equivalent of 25 full-time workers (small businesses with fewer than 50 half-time workers may be eligible).
• Average annual wage
  A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify

Amount of Credit
The maximum tax credit is 35% of premiums paid for small businesses and 25% for tax-exempt organizations. Since the credit is targeted to help those who employ low- and moderate-income workers, the maximum credit goes to smaller employers — those with 10 or fewer full-time equivalent (FTE) employees — paying annual average wages of $25,000 or less. Below are more details on the Amount of Credit:

• Maximum Amount
  The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
• Phase-out
  The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Small business or tax-exempt organizations can determine if they qualify for the Small Business Health Care Tax Credit with three simple steps.

To recap, starting in the tax year 2010, the new health care tax credit will offer small businesses tax help as an incentive to provide their employees health care coverage.

To get more information about the tax credit or get answers to your tax questions go the IRS website.

source: irs.gov