22 May Take advantage of tax incentives for small businesses with custom database software
Payroll can be a complex undertaking for most small businesses. While calculating hours and wages may not be the most exhausting duty, understanding and adhering to tax laws, regulations and deductions can be a hard task itself. In order to maintain these essential statistics, small businesses should use a custom database software to store all its payroll records while also paying close attention to the tax incentives recently proposed by lawmakers on Capitol Hill.
According to the New York Times, a new bill proposed by President Barack Obama would allow a company to get up to a 10 percent income tax credit against the amount of wages it expands by. This means that if a business increases its payroll by $4 million, it could potentially receive a $400,000 income tax credit. Subsequently, this credit is capped at $500,000 making it more valuable for small to medium sized businesses. Furthermore, the proposal is limited to the top wage that is subject to Social Security tax – $110,100.
According to the news source, many experts believe this new bill may be more of a distinction from the GOP rather than a genuine initiative. The Republican party recently proposed a tax incentive bill that would allow companies with less than 500 employees to deduct 20 percent of their income in 2012. But, this deduction is limited to half of the cash wages that were paid to employees.
Whether any of the bills come to fruition or not, companies will still benefit from maintaining accurate payroll records with use of a custom database software that allow for higher clarity into what can be a complicated process.