Tax Credit Available for Hiring Certain Employees

Work Opportunity Tax Credit saves employers tax dollars

The Work Opportunity Tax Credit (WOTC) is available to employers who hire individuals from one of nine targeted groups. Recent legislation extended the credit through August 31, 2011. To take the credit, the employee(s) you hire must be from one of the following targeted groups:
  • Families eligible to receive benefits under  the Temporary Assistance for Needy Families program.
  • High-risk youths.
  • Qualified ex-felons.
  • Vocational rehabilitation referrals.
  • Qualified summer youth employees.
  • Qualified veterans.
  • Families receiving food stamps.
  • Persons receiving certain Supplemental  Security Income (SSI) benefits.
  • Qualified long-term assistance recipients.
The credit is generally 40 percent of qualified wages paid in the first year of employment, up to $6,000 in wages for a maximum credit of $2,400. The maximum credit for summer youth employees is $1,200, which is 40 percent of the first $3,000 of wages. Certain qualified veterans and long-term assistance recipients have higher limits.
 

Tax Tips Small Business

Determining Qualified Business Expenses

Be sure to deduct every legitimate expense

Amounts you spend in the course of conducting business are generally deductible from the gross income of that business. This includes any start-up expenses. You can claim amounts spent for items ordinary and necessary in your trade or business as a deduction against your income. Otherwise, the amounts are amortized, depreciated, or expensed depending on the nature of the purchases.

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Small Business Quick Tip

The Social Security wage base increases to $106,800 in 2009 and 2010. This means that you are no longer required to withhold social security tax for employees after meeting this threshold. However, you are required to withhold Medicare taxes regardless of the amount of wages paid.
Saturday, 19th May 2012
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Tax Tips Personal

Naming a Beneficiary to Your Retirement Plan

Nonspouse beneficiaries have new options

If you are the beneficiary of a decedent's qualified retirement plan, and you are not the spouse of the decedent, you now have additional options for distributions. In the past, only a spouse beneficiary was permitted to roll the account into an IRA. Now, beginning in 2007, Read more...

Personal Quick Tip

If by year-end you haven't contributed funds to your 2010 IRA, or if you've put in less than the maximum allowed, don't worry. You can contribute to either a traditional or Roth IRA until the April due date for filing your tax return for 2010 not including extensions. You can contribute up to $5,000 to your IRA each year. If you are age 50 or older, you are allowed to contribute an additional $1,000.