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Tax Tips Small Business

Do You Know How Much Your Business Is Worth?

Tips for placing a value on your business

There are several reasons why you should know the value of your business. if you are planning to sell your business, the general rule is that you should sell it for fair market value. In many instances the term "fair market value" is somewhat ambiguous. In the simplest sense, fair market value is what a willing buyer would pay a willing seller, with each party knowing all the pertinent facts.

Small Business Quick Tip

If your business owns a vehicle that is available for an employee's personal and business use, the vehicle is nevertheless considered used 100 percent for business on the business tax return. The personal-use percentage is included on the employee's W-2 as an additional compensation.

Employers of Tipped Employees Allowed a Tax Credit

Are you getting the credit you deserve?

If you are an employer in the food and beverage industry, you may be entitled to a tax credit for the social security and Medicare taxes you pay on your employees' tip income. You must meet both of the following requirements to qualify for the credit:

You had employees who received tips from customers for providing, delivering, or serving food or beverages for consumption; and
You paid or incurred employer social security and Medicare taxes on these tips.

The credit applies only to tips received by food and beverage employees. It is not applicable to other tipped employees.

The credit equals the social security and Medicare taxes you paid on the tips received by the employees. However, no credit is given for tips used to meet the federal minimum wage rate of $5.15 per hour. For example, if you paid the employee $3.75 per hour and applied tips of $1.40 per hour to reach the $5.15 minimum wage, then the $1.40 per hour in tips cannot be used toward the credit. If, however, you paid each employee an amount equal to or more than the minimum wage without including tips, then you can compute the credit on all reported tips.

Since it is an income tax credit, claimed on an income tax return, you may use it to offset any regular income tax liability, but not employment tax liabilities. A credit is a dollar-for-dollar reduction of your regular tax liability, where an expense deduction only reduces your taxable income. Therefore, this credit can be more beneficial.

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Tuesday, 09 March 2010

What is an Enrolled Agent and why should I care?

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Tax Tips Personal

Tax Break for Reservists Called to Active Duty

Penalty-free withdrawals from retirement plans

If you are a reservist or national guardsman who was ordered or called to active duty for a period in excess of 179 days, you may withdraw money from your qualified retirement plan or IRA without incurring the 10% premature distribution penalty.

Personal Quick Tip

Beginning January 1, 2010, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:

50 cents per mile for business miles driven;
16.5 cents per mile for all miles driven for medical or moving purposes; and
14 cents per mile for all miles drive for charitable purposes.