News From Davis & Hodgdon Associates CPAs

E-Newsletter

Vol 6, Issue 2

www.dh-cpa.com

In This Issue

Did you know . . .

The Affordable Care Act and Small Businesses

Simplified Option for Claiming Home Office Deduction

Clients in the News

Staff Spotlight

Welcome!

This month we share some insight into the Affordable Care Act and how it affects small businesses. We would also like to update you in regards to a recent announcement from the IRS about home office deductions.

Did you know . . .

Vermont's 77,853 small businesses represent 96.3 percent of all employers, and they employ 59.7 percent of the private-sector labor force.

The Affordable Care Act and Small Businesses

The Affordable Care Act is intended to help small businesses by lowering premium cost growth and increasing access to quality, affordable health insurance. According to the Small Business Administration there are 3 key things that small businesses should know:

1. Businesses with Fewer than 25 Employees- Small Business Tax Credit

The Affordable Care Act does not require that businesses provide health insurance, but it offers tax credits for eligible small businesses that choose to provide insurance to their employees.

2. Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces

The Affordable Care Act does not require that businesses provide health insurance, but beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP , competitive marketplaces where small employers can go to find health coverage from a selection of providers.

3. Businesses with 50 or More Employees- Employer Shared Responsibility Provisions

Beginning in 2014, businesses with 50 or more full-time employees (or full-time equivalents) that do not offer affordable health insurance that provides a minimum level of coverage to substantially all of their full-time employees (and their dependents) may be subject to an employer shared responsibility payment if at least one of their full-time employees receives a premium tax credit to purchase coverage in an insurance Marketplace.

For more details please visit our blog post at: http://www.dh-cpa.com/305.

Questions? Feel free to call our office at 802.878.1963 or email info@dh-cpa.com.

Simplified Option for Claiming Home Office Deduction

On January 15th the IRS announced a simplified option to figure deductions for the business use of homes for tax year's starting in 2013. The new optional calculation, capped at $1,500 per year, is based on deductions of $5 per square foot for up to 300 square feet.

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

For the full article please visit: http://www.irs.gov/uac/Newsroom/Simplified-Option-for-Claiming-Home-Office-Deduction-Starting-This-Year.

Clients in the News

Congrats to our clients who have been making headlines!

Semi Probe recently announced expansion of their facility in Winooski. The company anticipates an additional 50 percent increase of its Vermont workforce in 2013. http://tinyurl.com/b4lyxf7

Staff Spotlight: Trisha Howard

Trisha Howard

Trisha Howard (trisha@dh-cpa.com)

Position: Associate Accountant
Education: University of Massachusetts Dartmouth, B.S. in Accounting and Finance
Resides: Colchester, VT
Quote: "Price is what you pay. Value is what you get." - Warren Buffet
Hobbies: Karate, gymnastics, reading, traveling, spending time with family and friends.

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This E-Newsletter is published by Davis & Hodgdon Associates CPAs as a service for clients, business associates and friends. Recipients should not act on the issues presented without seeking prior professional advice. Additional guidance regarding information contained herein may be obtained by contacting Davis & Hodgdon Associates CPAs at (802) 878-1963. Internal Revenue Service Circular 230 Disclosure. Pursuant to Internal Revenue Service Circular 230, we hereby inform you that the advice set forth herein with respect to U.S. federal tax issues was not intended or written by Davis & Hodgdon Associates CPAs to be used, and cannot be used, by you or any taxpayer, for the purpose of (i) avoiding any penalties that may be imposed on you or any other person under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.