Here are five things that small businesses need to be on top
of over the next several months:
Health care
Small business owners who bought employee health insurance
policies before the end of 2013, sidestepping the law's requirements for a
year, could pay between 10% and 20% more when it's time to renew. They'll also
have to decide on plans. Policies issued under the law have significant changes
including the requirement that pre-existing conditions be covered. Some owners
may decide it's better if workers purchase their own government-subsidized
coverage on health insurance exchanges.
Companies whose coverage took effect Jan. 1 of this year and
complied with the law could see increases between 5% and 10% for 2015. Not all
small business owners will have to make these decisions this year. Employers
with 50 to 99 workers have until 2016. Companies with fewer than 50 workers are
exempt.
Internet security
Home Depot's news that it was hacked should prompt small
businesses to improve Internet security. Small companies tend to be vulnerable
to hacking because many don't have strong Internet security.
Businesses should install software designed to protect
computers from viruses and what's called malware, programs used to harm
computers or steal information. If companies offer WiFi to customers or
visitors, it should be separate from their operations. Owners should consider
hiring an Internet security expert who can show them where their
vulnerabilities are and suggest a solution. Owners should also train employees
to help avoid hacking attacks.
New technology
Businesses interested in accepting Apple Pay, the digital
payment system linked to the new iPhone 6, will need to invest in equipment
that processes contactless payments. Contactless payments are transactions made
by tapping a smartphone, credit card or key fob on an electronic device.
Small business owners should also look ahead to October
2015, when credit and debit cards will be required to have embedded chips
rather than magnetic strips. Businesses will need new equipment to accept those
cards, but the good news is they can already buy equipment that also processes
contactless and swipe transactions.
Microsoft is expected to release its Windows 9 operating
system for laptop and desktop computers by early next year. But owners
shouldn't rush to buy it until they know whether it's compatible with
computers, hardware like printers and software they use to run their companies.
Internet sales tax
After the November elections, Congress could act on
legislation that would force retailers and other companies to collect sales tax
in states where they don't have a store or other physical locations. Under
current federal law, online, phone and mail-order transactions are exempt from
sales tax. The legislation has support in the Senate, which passed a
preliminary bill earlier this year. It faces opposition in the House.
The legislation is supported by retailers required to
collect the tax. They can lose business to out-of-state retailers who don't
have to collect it. Small retailers contend it will cost them time and money to
collect the tax.
Tax deductions
The size of companies' 2014 tax bills will depend on whether
Congress raises what's called the Section 179 deduction. It allows small
companies to deduct up-front rather than depreciate the cost of equipment like
computers, vehicles, furniture and manufacturing machines. The deduction, set
at $500,000 during 2013 to help businesses continue their recovery from the
recession, fell to $25,000 for 2014. The House has voted to set the deduction
permanently at $500,000. Senate leaders have opposed that increase.
The House also voted to revive a tax break called bonus
depreciation, which allows businesses to immediately deduct up to 50% of the
cost of property and equipment. It also faces Senate opposition.
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