If you’re a small business owner, you already know that you’re facing a host of tax changes, new regulations, and new compliance issues in 2011. Business News Daily recently ran a brief checklist of issues. Here is a sampling:
- Tax changes – Consult your tax and payroll advisors to ensure compliance with all the new tax changes, including the partial payroll tax holiday.
- Health care reform – If you purchase health insurance for your employees, you may qualify for a business tax credit. Also note that health plans that were in place on March 23, 2010 are “grandfathered” and do not have to add many of the new protections required by health care reform. If you make significant changes to those plans, however, you may lose your “grandfathered” status. You also run into compliance and record-keeping issues with your grandfathered plan that may motivate you to rethink sticking with it.
- FSA plans – If you offer (or participate in) a Flexible Spending Account plan, note one big change: effective January 1, 2011, over-the-counter medicines and drugs other than insulin will no longer be eligible for reimbursement without a prescription. There are still a lot of great reasons for employers to offer FSA plans, however.
- Unemployment Insurance rates/changes – Because of high unemployment rates, many employers will see a trend toward higher employer UI contribution rates higher.
- IRS enforcement - To help collect more tax revenue in this era of budget deficits, the IRS is ramping up its enforcement efforts in several areas. In 2010, the IRS kicked off an employment-tax audit program that will carry into 2011. These audits are focusing on employee misclassification, executive compensation, fringe benefits, and adherence to general employment tax filing requirements. Further, the IRS is accelerating efforts to increase tax compliance among employees who collect tips.