Financial Education

The Treasury Department and Internal Revenue Service today requested public comment on a proposed affordability safe harbor for employers under the shared responsibility provisions included in the Affordable Care Act that will apply to certain employers starting in 2014.

Under the Affordable Care Act, employers with 50 or more full-time employees that do not offer affordable health coverage to their full-time employees may be required to make a shared responsibility payment. Notice 2011-73, posted today on IRS.gov, solicits public input and comment on a proposed safe harbor, designed to make it easier for employers to determine whether the health coverage they offer is affordable. To that end, Treasury and IRS expect to propose a safe harbor permitting employers that offer coverage to their employees to measure the affordability of that coverage by using wages that the employer paid to an employee, instead of the employee’s household income. This contemplated safe harbor would only apply for purposes of the employer shared responsibility provision, and would not affect employees’ eligibility for health insurance premium tax credits.

Startups, newly established and growing small businesses now have a new source of financing backed by the U.S. Small Business Administration as 20 community organizations have been funded by SBA to start making loans up to $200,000 to qualifying small businesses.

Authorized under the Small Business Jobs Act of 2010, the new Intermediary Lending Pilot Program will provide direct loans up to $1 million to 20 community organizations or intermediaries in fiscal year 2011, which in turn will use those funds to help finance small businesses, mostly in underserved markets.

Small businesses that have previously filed for bankruptcy are no more burdened than other small firms by poor cash flow, high health insurance costs, or excessive taxes, and they attain similar firm sizes, according to a study released today by the U.S. Small Business Administration’s Office of Advocacy. However, they have about a 24 percent higher likelihood of being denied a loan and are charged interest rates at least 1 percent higher than other firms. The report finds that firms owned by African and Latino Americans are even more likely to be denied loans and charged higher interest rates.
 
“Small businesses filing for bankruptcy have an opportunity for a new start. This new start is hampered by the challenges of obtaining new loans. This can impede innovation and job creation,” said Chief Counsel for Advocacy Winslow Sargeant.
 

On Tuesday, March 29, 2011, the Internal Revenue Service is presenting a FREE webinar for tax professionals, small businesses, self-employed persons and independent contractors: Business Taxes for the Self-Employed: The Basics.

The webinar will cover:

• Reporting profit or loss from a business or profession

• Self-employment tax and estimated tax payments

• Schedule C and C-EZ

• Deducting business expenses

• Husband and wife businesses

• Recordkeeping

The webinar starts at 2 p.m. Eastern, 1 p.m. Central, noon Mountain and 11 a.m. Pacific.