This guest post is brought to you by Michael Whitacre, Southeast Tax Region and Atlanta Business Line Leader at BDO. Michael is graciously providing us with a synopsis of the 2nd Annual Tax Policy Symposium that was held on February 26th presented by Emory University School of Law, Emory’s Goizueta Business School, McKenna Long and Aldridge LLP and BDO Seidman LLP.
Scott Hendon, Tax Partner in the Private Equity Practice at BDO served as moderator for "A View From The Trenches" panel discussion. The panel focused on the practical impact on U.S. businesses of proposed and recently enacted tax legislation. (Photo taken by Joseph Wong, TKG Studios
The 2nd Annual Tax Policy Symposium’s theme was tax policy and health care reform. This was a timely discussion as the bipartisan televised healthcare discussion was held the day before.
The event brought together Washington legislative insiders, tax attorneys, tax accountants, industry tax executives and academics. Also present were healthcare experts including attorneys, investors, academics and industry executives. Capping off the event was a keynote speech from David Walker, former Comptroller General of the U.S. who addressed the current fiscal challenges of the country.
The healthcare business panelists specifically noted that small business owners will be in a difficult position with healthcare. Some especially tricky areas they pinpointed include:
- The difficulty that employers (and small business owners) have in meeting the various healthcare regulations as they currently stand
- The costs involved in providing employee healthcare up to the regulatory standards
- The questionable benefits from some of the requirements
The healthcare policy panel also discussed the political difficulties in addressing healthcare reform with very different opinions from the panelists regarding whether healthcare reform is the “third rail of American politics” or if we are at the forefront of significant changes in the healthcare system.
So what should a small business owner take away from this day long discussion and analysis? In a word, uncertainty!
Luckily there are still a few things small business owners can do now to maximize their tax savings while the current rules are still in place. Below are some commonly overlooked tax breaks that small business owners can take advantage of now while we’re waiting for the policy changes to shake out in Washington:
- Did you make a net operating loss within the last five years?
Eligible Small Businesses (ESB) are now allowed to carry back losses 3 to 5 years, instead of 2 years. This applies to losses generated in 2008 and/or 2009. This provision allows small businesses to reach back to more profitable times where they paid taxes and couldn’t normally offset 2009 losses. In essence, small businesses get another bite at the apple. This provision is of particular significance to small manufacturers, retailers and homebuilders – industries that have typically done well in the last 10-15 years, but have been impacted by the recent economic downturn. - Did you install new lighting, building insulation or heating cooling systems last year?
If so, you may be eligible for the energy efficient commercial building deduction. You can deduct up to $1.80 per square foot of the building where these energy efficient upgrades were made. This breaks down to 60 cents per square foot each for (1) energy efficient lighting, (2) heating/cooling systems (HVAC) and (3) building envelope. So even if you’ve only done one or two of the three, you’ll be eligible for a portion of the deduction. - Did you, develop or purchase any new space for your business, including warehouse or parking lot space?
New developments such as parking lots or warehouses are prime opportunities for significant energy tax savings, especially on things like lighting – which can save not only though tax credits but also in lower utility costs. - Is your business located in either an empowerment zone or a renewal community?
Employers located in empowerment zones are entitled to a 20 percentage credit on the first $15,000 of annual wages paid to residents of the empowerment zone. Employers located in renewal community zones are entitled to a 15 percent credit on the first $10,000 of annual wages paid to resident of the renewal zone. - Do you have an employer pension plan?
Eligible small businesses may claim a credit for qualified startup costs incurred in establishing and administering an eligible employer benefit plan for employees. The credit is 50 percent of the startup costs incurred to create or maintain a new employee retirement plan. The credit is limited to $500.
Contact info for the author:
Michael Whitacre
Southeast Tax Practice Leader at BDO Seidman, LLP
LinkedIn: http://www.linkedin.com/pub/michael-whitacre/9/931/6b0
Phone: 404-979-7116
Email: mwhitacre@bdo.com
