Small Employer Health Insurance Credit
For tax years beginning after December 31, 2009 eligible small employers may be entitled to a tax credit for making nonelective contributions to buy health insurance for its employees. Eligible small employers must pay at least 50% of the employee's premium costs in order to qualify for the credit. An eligible small employer has no more that 25 full-time equivalent employees during the tax year. Also an eligible small employer cannot have annual full-time equivalent wages that average more than $50,000 in order to qualify for the credit. Feel free to contact our office for more details on this credit.
IRS Postones Tax Deadlines for NC Tornado Victims
Individuals who reside or have a business in Bertie, Bladen, Cumberland, Halifax, Harnett, Johnston, Lee, Onslow, Wake or Wilson counties may qualify for tax relief. The IRS is postponing until June 30 the filing deadline for 2010 individual income tax returns, paying balances due, and making 2010 contributions to IRAs for those affected by the tornadoes. NC will waive late filing and late payment penalties for taxpayers who are unable to file their return or pay their tax because of the storm. The penalties will be waived on state taxes and returns that are due between April 18th and May 1, 2011.
Payroll Tax Holiday for Hiring Unemployed Workers
This act exempts employers from paying the 6.2% Social Security tax on wages paid to qualified new hires from March 19, 2010 through December 31, 2010. A qualified employee must begin employment after February 3, 2010 and before January 1, 2011. A qualified employee must also sign an affidavit, under penalties of perjury, that he or she hasn't been employed for more than 40 hours during the 60-day period ending on the date the individual begins employment with the qualified employer. The qualified employee must be filling a new job position from the qualified employer or replacing another employee who seperated from employment voluntarily or for cause. There is no payroll tax holiday for hiring a relative.
Credit for "Retained Workers"
In order to be a retained worker an individual must be one who qualifies for the payroll tax holiday. In addition the employer must employ the retained worker for a period of not less than 52 consecutive weeks. The employer must also pay the retained worker wages for the last 26 weeks of employment wages that equal at least 80% of the wages for the first 26 weeks of employment. The credit is equal to the lesser of $1,000 or 6.2% of wages paid to the employee during the 52 consecutive week period. For calender year taxpayers this credit will be claimed on the 2011 return. Please feel free to contact us to discuss or for additional details.
North Carolina Department of Revenue Refund System
The North Carolina Department of Revenue has launched a "Where's My Refund" tool within their website in order to locate your refund for the current tax year. The only information you need in order to inquire about your refund is the first social security number and the exact amount of refund listed on your NC return.
"Where's My Refund" link
Retirement Plan Ceilings
The ceiling on salary reduction contributions to SIMPLE plans is $11,500 for 2010 and 2011. The ceiling is $14,000 in 2010 and 2011 for those age 50 and over. The maximum 401(k) contribution is $16,500 in 2010 and 2011. The maximum 401(k) contribution for those 50 and over has risen to $22,000 for 2010 and 2011. The contribution limits for Roth and Traditional IRAs remain the same for 2011. Please feel free to contact our office with any questions or further clarification.
Penalties for S-Corporations and Partnerships
Partnerships and S-Corporations that do not file returns timely will owe $195 a month per partner or shareholder in penalties for up to 12 months. This is effective for 2010 tax returns. Fines for filing incorrect W-2 and 1099 forms have also increased.
NC Gift Tax Repeal
A repeal of the NC gift tax was signed into law July 17, 2008. However, it does not come into effect until January 1, 2009. There will not be any NC gift tax on gifts made on or after January 1, 2009.
Energy Efficient Home Credit
Contractors selling homes in 2011 may be eligible for an energy efficient home credit of up to $2000 per home. To qualify for the $2000 credit a contractor must build a home that has a level of annual heating and cooling energy consumption which is at least 50% below the annual level of heating and cooling energy consumption of a comparable dwelling unit. In addition building envelope component improvements alone must account for a level of annual heating and cooling energy consumption that is at least 10% below the annual level of heating and cooling energy consumption of a reference dwelling in the same climate zone. In order to qualify a contractor must obtain a certificate from an individual who has been accredited or authorized by RESNET to perform this certification. This credit expired for energy efficient homes sold or leased after 2011.
Mileage Rates
The standard mileage rate for business miles driven in 2010 is 50 cents per mile.
The standard mileage rate for medical or moving miles is 16.5 cents per mile for 2010. The standard rate for miles driven in service of charitable organizations is 14 cents per mile for 2010.
The standard mileage rate for business miles driven in 2011 prior to July 1, 2011 is 51 cents per mile. The standard mileage rate for medical or moving purposes prior to July 1, 2011 is 19 cents per mile. The standard rate for miles driven in service of charitable organizations prior to July 1, 2011 is 14 cents per mile.
The standard mileage rate for business miles driven between July 1, 2011 and December 31, 2011 is 55.5 cents per mile. The standard mileage rate for medical or moving miles driven between July 1, 2011 and December 31, 2011 is 23.5 cents per mile. The charitable mileage rate remains at 14 cents per mile for miles drive between July 1, 2011 and December 31, 2011.
Social Security Administration Employee Verification Service
The Social Security Administration offers a telephone service to help you verify that names and social security numbers given to you by employees are correct. You can call 1-800-772-6270 on weekdays from 7 a.m. to 7 p.m. to receive verifications for up to 5 employees at a time. You must have your company EIN available along with SSN, last name, first name, middle initial, date of birth and gender of all employees you wish to verify.
Taxpayer Records Online
The IRS will be releasing an online system in the near future that will allow taxpayers to access and print three years worth of tax returns along with other information.
Charitable Contributions Requirements
In order to deduct a charitable contribution made in cash, by check, or by other monetary means, the contribution must be supported by a bank record or a receipt, letter or other written communication from the charity showing the name of the donee organization, the date of the contribution, and the amount of the contribution. If the contribution is $250 or more, donor's must receive a written receipt from the charity that includes detailed information, including a statement indicating whether or not goods or services were received in return for the contribution.
