Small Business Tax Credit: Worth the Hype?
06/01/2010
The media has touted the Small Business Tax Credit as a great victory for small employers. But as we learn more about it and do the math, we're left wondering just how many businesses will benefit. The IRS has provided scenarios that explain the credit, and even has a YouTube video all about it. We encourage you to run the numbers and determine if the credit will affect your small business any, if at all. For more information on the credit, visit the Small Business Tax Credit section of the IRS website. New information is posted almost daily. Andrew Fondow and Mark Sherman are also great in-house resources that can help you determine what the credit means to you.
The following is a table that we created to show the average salary vs. number of employees and how the credit phases out. As always, please consult your tax advisor for these issues to ensure how they work specific to your business.
| FTEs |
10 |
12 |
14 |
16 |
18 |
20 |
22 |
24 |
| $25,000 |
35.00% |
30.33% |
25.67% |
21.00% |
16.33% |
11.67% |
7.00% |
2.33% |
| $30,000 |
28.00% |
23.33% |
18.67% |
14.00% |
9.33% |
4.67% |
0.00% |
0.00% |
| $35,000 |
21.00% |
16.33% |
11.67% |
7.00% |
2.33% |
0.00% |
0.00% |
0.00% |
| $40,000 |
14.00% |
9.33% |
4.67% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
| $45,000 |
7.00% |
2.33% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
| $50,000 |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
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