There have been some new developments recently from our friends at the IRS and the congressional government. One has to do with a previous post regarding compliance and the tax gap, and another has to deal with new legislation that may benefit the small business owner. If you are a small business owner, both new developments will be of importance to you.
Audits Will Be Up for 2006 Returns
The IRS will launch “The National Research Program” project that will focus on individual tax returns for 2006. About 13,000 individual tax returns will be audited starting in October. The audits will focus on areas of the income tax return that can not be verified by third-party information reporting. For details see the IRS article or contact your tax advisor.
Bush Signs Bill….Small businesses get 4.8 billion
The President signed the Small Business and Work Opportunity Tax Act of 2007 thus triggering retroactive and immediate changes affecting small businesses. Since the minimum wage has been increased (and is adversely affecting some small businesses), the Act provides tax incentives to help businesses absorb the cost of the higher federal minimum wage. Highlights of the Act include:
an extended and enhanced small business Code Sec. 179 expensing;
a FICA tip credit calculation that ignores the new hike in the minimum wage; and
an extended and enhanced Work Opportunity Tax Credit.
For more information regarding the new legislation passed and how it will affect you be sure to speak to your tax advisor.
Updates to keep your Business N Synergy