Business Taxation

Question 1

Tax credits for setting up SEP, SIMPLE IRA or Qualified Plans (401(k))

Answer 1

• Credit up to $5,000 for 3 years for the ordinary and necessary startup costs for plans.
• Credit equals 50% of the costs per year for each of the first 3 years of the plan.
• Can choose to use it in the tax year before the plan becomes effective.

Question 2

Deductibility of business gifts

Answer 2

Up to $25 per person.

Entertainment is no longer deductible at all

Question 3

Disabled access credit

Answer 3

50% of the first $10,000 spend (Max $5,000)

Question 4

Work Opportunity Credit

Answer 4

• Max amount is $6,000 per individual new hire only.

- 25% of qual’d first yr wages of employees working more between 120-400 hrs in a year

Question 5

Work Opportunity Credit

Answer 5

-25% of qual’d first yr wages of employees working more between 120-400 hrs in a year
+40% of qual’d first yr wages working more than 400 hrs in a year
+50% of qual’d second yr wages of employees certified as long-term family assistance recipients
-Max amount is $6,000 per individual new hire only.

Question 6

Rehabilitation Investment Credit

Answer 6

• 10% of buildings placed in service before 1936

- 20% for certified historic structures

Question 7

Employer provided childcare facilities and services credit

Answer 7

• 25% of building costs plus 10% of the resource & referral costs pd or incurred during the tax year.
• Limit is $150,000 per year.
• Remaining cost is depreciable over life of assets

Question 8

Research and Development credit

Answer 8

Credit amount is:

-20% of the increase in R&D activities