So many small businesses are in limbo as to what 2014 is going to bring regarding the healthcare reform, and there’s become such a frenzy amongst business owners that they are going to have to not only raise prices, but also consider laying people off. First, the Small Business Administration first defines a small business as “one that is independently owned and operated, is organized for profit, and is not dominant in its field.”
Manufacturing – 500 to 1,500, depending on the type of product manufactured
Wholesaling – 100 to 500 depending upon the particular product being provided
Services – annual receipts may not exceed $2.5 to $21.5 million, depending upon the particular service being provided
Retailing – annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided
General and Heavy Construction – annual receipts may not exceed $13.5 to $17 million, depending upon the type of construction
Special Trade Construction – annual receipts may not exceed $7 million
Agriculture – annual receipts may not exceed $0.5 to $9.0 million, depending upon the agricultural product
The key item that businesses also need to be aware of is that Obamacare is based upon the number of full-time employees, which will not affect anyone until they reach 50. However, you must also calculate the number of part-time employees that you have based upon the number of hours that they work. If you have 2 part-time employees who work 20 hours each, then they must be counted as 1 full-time employee. As reported by David Chase, who is the Outreach Director for a lobbying group that supports health-care reform, the Small Business Majority, there’s an estimated 4% of businesses that will be affected, because the other 96% already offer health insurance.
To determine how many full-time employees you have, you take the number of hours all of your employees have worked in the past year, divide by 2,080, which is 40 hours per week x 52 weeks in a year, then you determine how many actual full-time employees you have. If this number reaches 50, then by law you will be required to offer health insurance coverage for all employees who work an average of 30 hours per week after 90 days from their hire date. You are eligible though to pay a $2,000.00 annual penalty with the first 30 employees counted as exempt, although this will only be realized up to 150 employees total. People who work less than 30 hours per week or work fewer than 120 days per calendar year, are exempt from the mandate.
If employers choose to offer coverage though, they must present the insurance to eligible employees and cover at least 60% of the value, however the employee share must not be more than 9.5% of their total income in the calendar year. If you choose to offer health insurance to your employees and you are not mandated, in the State of Texas you are required to provide at least 50% of the benefit value.
Don’t Miss the Health Insurance Deduction if You’re Self-Employed
If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.
The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.
You may be able to take this deduction if one of the following applies to you:
· You had a net profit from self-employment. You would report this on a Schedule C, Profit or Loss from Business, Schedule C-EZ, Net Profit from Business, or Schedule F, Profit or Loss from Farming.
· You had self-employment earnings as a partner reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.
· You used an optional method to figure your net earnings from self-employment on Schedule SE, Self-Employment Tax.
· You were paid wages reported on Form W-2, Wage and Tax Statement, as a shareholder who owns more than two percent of the outstanding stock of an S corporation.
· There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:
· If you’re self-employed and file Schedule C, C-EZ, or F, the policy can be in your name or in your business’ name.
· If you’re a partner, the policy can be in your name or the partnership’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the partnership must reimburse you and include the premiums as income on your Schedule K-1.
If you’re an S corporation shareholder, the policy can be in your name or the S corporation’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the S corporation must reimburse you and include the premiums as wage income on your Form W-2.
About Our Show Advisor: Dwayne Briscoe is the founder and owner of Bookkeeping-Results, LLC. Dwayne began his company in January 2007, based on the foundation to educate small business owners and bookkeepers who use QuickBooks®. Working as a full-charge bookkeeper and trainer in a variety of industries for over 15+ years, he is a certified Pro Advisor with 5 certifications, including Enterprise Solutions and Point of Sale. He is also an instructor at Brazosport College in Lake Jackson, where he teaches basic accounting, QuickBooks®, and basic payroll, along with hosting his own private classes.
Bookkeeping-Results, LLC has focused more on quality and not quantity for their clients, by paying attention to the details. Through regular continuing education participation, as well as exploring additional ways of “thinking outside of the box” to help expand people’s knowledge of their own financial well being, it’s important to focus on not only saving the client money but also making the client money.