May 2010 Business Newsletter
Health Reform Starts Now - Tax Breaks for the Year 2010
 
Most of the healthcare reforms that President Obama signed into law in March will not take effect for another four years. However, small business can look forward to some relief for the 2010 tax year. A tax credit to offset health insurance premiums took effect immediately. To get the credit, a business must have fewer than 25 full-time workers, or the equivalent, and pay an average annual wage of less than $50,000 and cover at least half of the health insurance premiums for their workers. Businesses with fewer than 10 employees and average wages of less than $25,000 can max the credit out while larger firms, and those with higher payrolls, collect a reduced credit. For 2010-2013, the tax credit covers up to 35% of the money a qualifying business spends on its health insurance premiums. In 2014, the top tax credit increases up to 50%. This credit is available for a maximum of six years: 2010-2013 and for any two years after that.

The IRS broke down the numbers to help business owners understand the kind of cash they can get back. For example, an auto repair shop with 10 employees that has a total payroll of $250,000, where each worker averages $25,000 and spends $70,000 annually on health insurance premiums would max out the benefit and collect a credit of $24,500 on its 2010 taxes.

Tool Designed to Help Companies Hire the Jobless
 
Employers in New York have a tool now to help them assess the benefits of hiring an unemployed worker. New York State unveiled a calculator that will tell companies the federal tax credits they will receive in the tax year 2010-2011 by hiring people who have been jobless for at least sixty days. Employers can qualify for up to a 6.2% payroll tax incentive, which, in effect, exempts them from paying Social Security tax on that person's wages if they hire people who have been jobless for at least sixty days. Companies will also receive a $1,000 tax credit for each of these workers that stays on the job for at least one year. These tax incentives are designed to encourage companies to hire full-time workers and not temporary workers while they may remain unsure about the economy.
Six Ways Health Reform Will Help Small Businesses
 
Small businesses want to provide health coverage for their workers, but they face extraordinary challenges in doing so. These challenges include premiums that are 18% higher, on average, than large businesses pay for the same coverage. Health reform legislation signed by President Obama includes a number of important benefits to help make the coverage more affordable:
  1. Establishes a small business healthcare tax credit to help small businesses afford the cost of covering their workers;


  2. Creates health insurance exchanges to increase bargaining power and reduce administrative costs;


  3. Ends price discrimination against small businesses with sick workers;


  4. Increases healthcare security to unlock entrepreneurship;


  5. Reduces the hidden tax on small business employees with health insurance; and


  6. Reduces premiums in the small group market.
How to Manage an Intern
 
Internships are increasingly more popular for young people. Often high school, undergraduate and graduate students looking for practical experience in a wide-range of fields promote internship programs. Internship programs can also be a great resource for a company, particularly start-ups that might not have the same talent draw as their larger counterparts. Here are some tips on how to structure a program and manage the interns to everyone's advantage:

  1. Know what you want - When you decide to bring an intern on board for your company, you need to have a clear vision of why you are creating the internship program. This will allow you to gauge its success and keep you from inadvertently exploiting your interns.


  2. What to Provide for your Interns - The main thing interns should take away from an internship at your company is practical work experience that, in some way, matches their interests. Internships should be viewed as a supplementation to the education system, filling in the knowledge gaps by teaching tangible skills.


  3. Providing Mentorship and Advice - Even if you have a hands-off management style, when you bring on interns, you have to insure that they have at least one point person, if not more, who they can go to with their questions.


  4. Making the Time Commitment - It is important to make sure you understand how much time you will need to spend training and advising the intern, and that they understand how much time they will need to commit to your company.


  5. Avoiding A Legal Snafu - According to the Department of Labor, under the Fair Labor Standards Act, unpaid internships must meet all of the following six criteria:
    6.

    1. The training interns must be similar to what would be given in an educational or vocational academic setting;


    2. The internship should be focused on the benefits to the trainee;


    3. Interns cannot be replacing workers who are usually paid;


    4. The employer receives no immediate advantage from the trainee's activities and the employer's operations may be impeded on occasion;
      5.
    5. At the end of the training, the trainees do not necessarily get hired;


    6. Both the company and the intern must understand that work is being done without pay.
      7.

Business Newsletter Archives
 
 

Contact Information

phone: 716-852-3600
Join our mailing list!