An Overview of the New Markets Tax Credit (NMTC)

The federal New Markets Tax Credit (NMTC) program was established in 2000 by Congress to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The program attracts investment in low-income communities by allowing individual and corporate investors to receive a tax credit against their federal income tax liability.

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New Law Designed to Spur Investment in Georgia

HunterMaclean partner Adam G. Kirk discusses the potential impact of House Bill 318, which recently created the Invest Georgia Fund and offered a variety of tax credits for qualified businesses.

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Tax Considerations Facing Small Businesses For 2013

HunterMaclean managing partner Frank Macgill discusses tax changes affecting small businesses in the New Year.

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Don’t Wait to Fix Deferred Compensation Failures

IRS guidance extends the opportunity for employers to correct document failures which inadvertently violate Section 409A of the Internal Revenue Code.

Originally enacted in 2004 to curb deferred compensation income tax avoidance abuses, Section 409A reaches beyond traditional executive incentive compensation programs and impacts employment agreements, bonus programs, and severance policies. Violation of Section 409A can mean automatic taxation on the deferred compensation at issue, even if the employee has not yet received that compensation, and a 20% penalty.

Essentially, Section 409A regulates any arrangement that defers payment of compensation to a year later than the year in which it was earned. Section 409A applies even if the payment of compensation is conditioned on future performance of services or the compensation could otherwise be forfeited.

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Tax Overhaul Shelved, Lawmakers Turn To Expenditures

By Adam G. Kirk, published on July 27, 2011, in Business in Savannah.

In May, Governor Nathan Deal signed an $18.3 billion state budget adopted by Georgia lawmakers for the 2012 fiscal year. Although the budget offers a slight increase in spending over previous fiscal year, it cuts spending by state agencies by an average of 7 percent.

The budget was finalized quickly after lawmakers shied away from a major tax overhaul that would have benefitted businesses statewide. House Bill 388 would have reduced the state’s personal income tax rate from 6% to 4.6% in 2012 and again in 2013 to 4.55%, while doing away with many deductions and adding sales taxes. New sales tax increases would have included auto repair labor, private sale of cars, groceries, cigarettes and possibly gasoline, and a 7% communications tax on telephones, satellite and cable television and other communications services.

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Have You Checked Your Tax Status Lately?

By James Kearney, published on July 13, 2011, in Business in Savannah.

The IRS recently published a list of organizations that automatically lost their tax-exempt status due to a failure to file information returns for three consecutive years. This first round of automatic revocations reduced the nonprofit sector by 17 percent or by 279,595 nonprofit organizations total.

The automatic revocations stem from a change in the law included in The Pension Protection Act of 2006. Effective for tax year 2007, this law requires most tax-exempt organizations, with the exception of churches and most church-related organizations, to file an annual information return with the Internal Revenue Service (IRS). Any exempt organization that fails to file a return for three consecutive years will automatically lose its tax-exempt status. Prior to this law, many small organizations with revenues under $25,000 had no filing requirement.

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New Health Care Tax Credit Can Offer Significant Savings for Small Businesses

Health care reform legislation signed by President Obama in March of 2010 includes a new Small Business Health Care Tax Credit to help small businesses cover the cost of providing health care insurance for employees.

Nearly 17 million Americans currently work for businesses that will be eligible for the tax credit between now and 2013, according to a recent report from the Commonwealth Fund, a private health care research group. This credit has been designed to help reduce financial pressure on small businesses that want to provide health insurance coverage for employees.

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IRS Plans to Target S Corporations for Underpayment of Employment Taxes

By Frank S. Macgill, published on March 24, 2010, in Business in Savannah.

In its continuing efforts to close the tax gap, the Internal Revenue Service may start pursuing some business owners for additional taxes. A new report by the Government Accountability Office published in December, found that some S corporations are failing to pay adequate wages to their owner-employees. which leads to an underpayment of employment taxes.

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