New Tax Breaks
• Last year's stimulus bill created the Making Work Pay tax credit, which is worth up to $400 for working individuals who earn between $75,000 and $95,000, and $800 for working married couples who earn between $150,000 and $190,000. The tax credit is aimed at employees, but many business owners will get to cash in as well. That's because for about 20 million businesses in the country, the owner is the sole employee, so he or she might be eligible for the credit. "What's cool about that is it's a credit and not a deduction, you can write it off straight off your tax liability," says Reeth.
• Small businesses that provide health insurance for their employees know about the Consolidated Omnibus Budget Reconciliation Act, which allows former employees to continue coverage for a period of time after they leave a business. Individuals who receive health benefits under COBRA have to pay 35 percent of the cost of premiums, while the former employer pays for the remaining 65 percent. But a stimulus provision offers a tax credit that reduces a business's employment taxes by whatever it is paying for the 65 percent.