We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Small Business CPA discusses Health Insurance Tax Credit | 2013 Form 8941

CPA Firm in New Hanover County NC: tax accountants

Gary Bode CPA: the health insurance tax credit should just be one of many factors in your company’s tax positioning. If you’d like a free initial consult, please call (910) 399-2705.

The Health Insurance Tax Credit, is a hot small business tax issue.  If you didn’t qualify to use Form 8941 in 2012, maybe you can structure your company’s health insurance benefits so you do qualify in 2013.  As the government mandates citizens to buy health insurance, there will be increasing pressure to offer it as an employee benefit.  So a small business tax break is provided by the IRS as a social incentive.  Here’s a post on Form 8941 preparation.  We know Romney can’t repeal Obamacare.  But States are still suing the federal government about it. Very exciting, LOL. CPA chatter says many small business owners who qualify to file Form 8941 don’t. Why? They feel Form 8941 is too complicated and the actual credit is too small. Form 8941 does progressively whittles down the credit amount. But it’s worth filing.

The three primary factors for Health Insurance Tax Credit eligibility are roughly sketched below.  As with all IRS small business tax credits, there are a myriad of details.  So consulting with your CPA or tax accountant is prudent.

  1. Company must have no more than 25 Full Equivalent Employees (FTE).  Here you just add the total hours worked by full and part-time employees for the year, then divide by 2080.  So this is truly a small business tax break.
  2. Less than $50,000 average salary per FTE.  This is just the total wages paid to included employees for the year, divided by the number of FTE(s) as calculated above.
  3. Company must pay at least 50% of the health insurance premium for those enrolled.

This may sound complex, and there are lots of details, but the actual numbers can be pulled off your payroll processing reports and health insurance bills.  Then you can use Excel to create multiple alternative scenarios to eval all your options.  Sometimes intangible factors must be considered too, like the benefit of employee retention, or conversely, the cost of employee attrition.

We feel last year’s tax preparation is just a stepping stone to this year’s tax positioning. If you’d like a free initial consult with a small business CPA firm offering more than just tax preparation, please call us at (910) 399-2705.

Amount of Health Insurance Credit

The Health Insurance Tax Credit amount is based on the lesser amount of:

  • Actual qualifying premiums paid, or,
  • The IRS determined standard rate for rate for your State

2012 Limits

“For profit” businesses (Schedule C on IRS Form 1040, Form 1065, Form 1120 and Form 1120S) are allowed 35% of that amount.  Non Profits (Form 990) are allowed 25%.

2013 Limits

These allowable percentages increase in 2013 to 50% and 35% respectively.  Again, this is a great small business tax break.  Health care insurance is a major employee incentive.

Small Business Tax Positioning

There is seldom just one dramatic issue that affects your tax liability.  Usually, multiple tax strategies are in play, all of which have to make financial sense to your company individually.  The Health Insurance Tax Credit is just one small business tax issue we discussed with our clients in 2012.  We also consider cash flow of the company.  The health insurance premiums are paid now and then you get a tax liability reduction later.  So the year’s premiums are up front costs with a small business tax credit kicking in the following year.

Tax positioning starts with accurate and timely small business bookkeeping.  Followed by knowledge of your industry.  Coupled with good current knowledge of  IRS regulations, tax audit red flags and tax court trends.

We have a virtual office, so distance isn’t a factor in being your CPA. For a free initial consult call (910) 399-2705.

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2 comments to Small Business CPA discusses Health Insurance Tax Credit | 2013 Form 8941

  • Ken Brown

    Instructions for Form 8941 Line 19 instructs you to enter the total amount of payroll taxes the tax-exempt employer was ‘required’ to withhold for Income & Medicare, and the amount the employer was ‘required’ to pay.

    We are a Church with half of our Payroll being dual status Pastors who we are not to withhold taxes from. If the Pastoral Staff request an amount to be withheld on their W4, can that be included in the amount entered on Line 19 ?

    • Well that’s a research question Ken. If we were working the case we’d use tax research software to find a definitive answer. However the instructions say require and you’re saying voluntary. So may gusess is that it wouldn’t be listed on line 19.

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