Top Tax Tips

The Obama administration and last year’s Congress have provided new tax savings for small businesses.Remember the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010?

According to one of the top 15 accounting firms, J.H. Cohn LLP, here are the fruits of a few key provisions. These excerpts are reported by and directly quoted from Nation’s Restaurant News.

• Depreciation: “The Act increases the 50 percent bonus depreciation deduction to 100 percent for qualified investments made after September 8, 2010 and before January 1, 2012. This provision allows the taxpayer to expense, in the year placed in service, 100 percent of the cost of never-before-used fixed asset additions, without any limitations.”

• Tax credit: “The HIRE Act, also passed in 2010, provided a significant provision that gave a payroll tax holiday for employers that, in general, hired a worker, after February 3, 2010, who was not employed for more than 40 hours during the 60-day period prior to the hire by the taxpayer.”

• FICA: “The OASDI tax rate for wages paid in 2011 is set by statute at 4.2 percent for employees, a decrease of 2.0 percent from the 2010 rate of 6.2 percent.The rate for the employer match portion has not changed and remains at 6.2 percent.”

• Gift cards: “[New] rules require the restaurant to make gift cards valid for at least five years, provide additional rights to consumers with respect to expired cards, and meet additional disclosure requirements. Does your restaurant report revenue received from gift card sales in accordance with IRC Section 451 and is it eligible for a possible one- or two-year deferral of recognition of such revenue pursuant to Revenue Procedure 2011-18?"