Monthly Tax Tips

Major tax acts passed in March

HIRE Act

If you run a business, you will want to take note of the Hiring Incentives to Restore Employment (HIRE) Act, signed by the president on March 18. The act has the potential to benefit every U.S. business – from a one-person consulting firm to a Fortune 500 multinational corporation. Benefits are available to even tax-exempt entities and taxable companies operating at a loss.

The act provides tax credits for companies that hire new employees who have been unemployed for at least 60 days. Both full-time and part-time employees qualify. You will have to act quickly, however. The provisions of this bill expire at the end of this year.

The law also extends enhanced deductions to companies that expand by adding machinery and equipment or replace existing business assets other than buildings during 2010.

Healthcare Reform Act

Two bills signed into law by President Obama at the end of March will change health care in the United States and have an impact on every citizen, employer and medical practice in our country.

While many of the changes mandated by the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Act of 2010 will not be implemented for a number of years, others will take effect immediately.

Employers

There has been much discussion – positive and negative – about the potential financial impact of this legislation on employers, especially small businesses. It is important to keep in mind that the law does not require employers to provide health insurance coverage. It does require automatic enrollment in plans sponsored by large and mid-sized employers. Employers that do not provide minimum essential coverage will be liable for an additional tax.

Individuals

There has been a great deal of speculation in the media about how individuals will be impacted by healthcare reform. Many individuals who currently do not have coverage will be able to obtain medical insurance through one of a number of channels.

Medical practices

The legislation will affect all medical practices. Many of the changes are intended to move the healthcare system to look more at quality of care and preventive services. Every medical practice will need to make changes to its operations to be in compliance.

Medical practices that have been providing care to uninsured patients may now be able to receive payment once these individuals have the ability to obtain coverage.

These new initiatives have varying implementation dates, so you should carefully evaluate which aspects of the legislation affect you and create a budget to determine the financial impact on you. Businesses should work with their insurance brokers, healthcare attorneys and CPAs to ensure compliance. The changes may require modification of employee handbooks, employment contracts and corporate documents.

There may be efforts in the coming months and years prior to 2014 to roll back some of the changes found in this legislation. Businesses, individuals and medical practices should continue to monitor the news carefully to understand the full impact of the healthcare reform legislation.

Call our office for more information and clarification on how these new laws may affect you.