maximum credit

Tax

2012 Tax Changes for Businesses

Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes in 2012.

Standard Mileage Rates 
The standard mileage rate in 2012 is 55.5 cents per business mile driven, 23 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses 
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $50,000. The credit can be claimed in tax years 2010 through 2013 and for any two years after that. The maximum credit that can be claimed is an amount equal to 35% of premiums paid by eligible small businesses.

Credit for Hiring Qualified Veterans
The maximum credit that employers can take for hiring qualified veterans in 2012 is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations. See Tax Credit for Employers Hiring Veterans This Year (below) for additional details on this tax credit.

Section 179 Expensing 
In 2012 the maximum Section 179 expense deduction for equipment purchases is $139,000 ($174,000 for qualified enterprise zone property) of the first $560,000 of certain business property placed in service during the year. The bonus depreciation is 50% for qualified property that exceeds the threshold amount.

Please contact us if you need help understanding which deductions and tax credits you are entitled to. We are always available to assist you.

Tax

Do You Qualify for the Earned Income Tax Credit?

Millions of Americans forfeit critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for low-to-moderate-income individuals who work. Taxpayers who qualify and claim the credit could owe less federal tax, owe no tax, or even receive a refund.

The EITC is based on the amount of your earned income and whether or not there are qualifying children in your household. If you have children, they must meet the relationship, age, and residency requirements. Additionally, you must be a US citizen, have a valid social security card, and file a tax return to claim the credit.

General requirements: If you were employed for at least part of 2012 and are at least age 25, but under age 65, and are not a dependent of anyone else you may be eligible for the EITC based on these general requirements:

  • You earned less than $13,980 ($19,190 married filing jointly) and did not have any qualifying children.
  • You earned less than $36,920 ($42,130 married filing jointly) and have one qualifying child.
  • You earned less than $41,952 ($47,162 married filing jointly) with two or more qualifying children.
  • You earned less than $45,060 ($50,270 married filing jointly) with three or more qualifying children.

Tax Year 2012 Maximum Credit

  • $5,891 with three or more qualifying children
  • $5,236 with two or more qualifying children
  • $3,169 with one qualifying child
  • $475 with no qualifying children

Investment income must be $3,200 or less for the year.

If you think you qualify for the EITC but aren’t sure, call our office.

Tax

Do You Qualify for the Earned Income Tax Credit?

Millions of Americans forfeit critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for low-to-moderate-income individuals who work. Taxpayers who qualify and claim the credit could owe less federal tax, owe no tax, or even receive a refund.

The EITC is based on the amount of your earned income and whether or not there are qualifying children in your household. If you have children, they must meet the relationship, age, and residency requirements. Additionally, you must be a US citizen, have a valid social security card, and file a tax return to claim the credit.

General requirements: If you were employed for at least part of 2011 and are at least age 25, but under age 65, and are not a dependent of anyone else you may be eligible for the EITC based on these general requirements:

  • You earned less than $13,660 ($18,740 if married filing jointly) and did not have any qualifying children.
  • You earned less than $36,052 ($41,132 if married filing jointly) and have one qualifying child.
  • You earned less than $40,964 ($46,044 if married filing jointly) with two or more qualifying children.
  • You earned less than $43,998 ($49,078 if married filing jointly) with three or more qualifying children.

Tax Year 2011 Maximum Credit

  • $5,751 with three or more qualifying children
  • $5,112 with two or more qualifying children
  • $3,094 with one qualifying child
  • $464 with no qualifying children

Investment income must be $3,150 or less for the year.

If you think you qualify for the EITC but aren’t sure, call our office today.

 

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