Readers of our various Silkin Management Group blog sites have been informed over the last week or so of different financial and tax related issues that any small business owner needs to be aware of for the coming year.
One of the issues that we touched on in an earlier Silkin Management Group blog concerned the debates and proposed legislation to continue the payroll tax extension. Past legislation reduced payroll taxes from 6.2% to 4.2%. Although this amount doesn’t necessarily provide enough extra money for small businesses to hire extra employees, it does put more money into the pockets of employees with the hope that they will spend more money and boost the national economy.
One big feature included in the House bill, put together by the Republicans, covers reforms to unemployment insurance which could be helpful to many small businesses, including Silkin Management Group clients. The reforms include:
• Requiring unemployment recipients to be searching for work
• Providing stats with increased flexibility for paying for this program
• Reduction in the maximum amount of time people out of work can file for unemployment from 99 weeks to 59 weeks by the middle of 2012. This alone would save states huge amounts of money.
• Hopefully, lower insurance premiums by use of the cost savings from the points above.
Another pro-business feature of the bill is the continuation of the favorable depreciation rules that were instituted several years ago. If this bill passes, 50% of the cost of new purchases in 2012 can be written off.
One other caveat that the Republicans threw into the bill, which will likely mean it won’t make it through the Senate, has to do with oil drilling in Alaska. This part of the bill could likely determine whether the tax reduction gets passed. We will update the progress of this issue in upcoming Silkin Management Group blogs.
Dave McKevitt
Silkin Management Group Consultant
You can find out more about Silkin Management Group by visiting our website at www.silkinmanagementgroup.com
