Depending on the industry, the beginning of a new year can be incredibly busy or the slowest time of the year. Wherever the start of a new year finds your business, January marks a good time to begin thinking of baseline business strategies. Here are six things that should be reviewed in order to keep your business running smoothly and moving ahead of the competition.

1. Update your website.
   Begin by updating photos. Many businesses use the same photos and graphics for the About Us section or Products/Services section. With new images, viewers realize your website is active. Additionally, add to any blogs or newsletters and revise menus, staffing, or other items. These revisions immediately give your website an inexpensive facelift.
2. Review pricing.
   Costs on shipping, fuel surcharges, supplies, utilities and other day-to-day items can slowly creep up during the year. Review all costs to make sure that pricing is maintained to produce a comfortable profit margin.
3. Mystery shop your own business.
   Have a friend do an internet search for your business, call in to ask a question or schedule an appointment, and visit your location. Ask your friend to give a detailed account of your business so that you can determine how to improve customer service. This is important to get an honest view point that a customer might not be able to give you.
4. Evaluate employee compensation.
   Every business person knows that great employees are hard to find. Keep employees loyal by evaluating compensation in your industry and being competitive in wages and benefits. It is widely written that employee turnover is one of the most expensive costs of business. Avoid these costs by keeping the talent in-house.
5. Re-visit your competition.
   When starting your company, visiting competition was a main activity. Although there doesn’t seem to be enough time in the day, keeping track of the competition is a key ingredient to success. Knowing what bargains key players in the industry are offering, and what events they are participating in, are important to keeping pace. Anticipating growth opportunities that your competitors are pursuing are important to keeping ahead of the game.
6. Get one new thing.
   Strive to add one new item to your business this year. This new item could be a big new client, an addition to your product line or service offering, or a new location or outlet for your services or goods. Adding one new thing to your business stimulates growth by creating fresh interest in your business and increases your client list.

Whether you are updating your web presence or evaluating yourself or your competition, this information is useful in growing a business. Each of these to-do items increases knowledge of the industry and gives a head-start to the new year.

Dear Valued Mernber of our SBA Resource partner Network:

Small businesses are the engine of job creation in America. With over 50 percent of Americans working or owning a small business, it is important that we seize every opportunity to support these businesses across the country. That is why I am writing to you about a new initiative started last year called Small Business Saturday. Most Americans know Black Friday and cyber Monday as big days for holiday shopping. Small Business Saturday is a day dedicated to supporting small businesses during the holiday season. It is as easy as walking into the local shop on your Main Street. These local businesses are the job creators in your community and every community in the country. Supporting these independent business owners is mission critical.

When I walk around my own neighborhood in Washington, it’s just great to see mernbers of my community helping each other. People supporting each other is what we’re all about in this country, and no one does that better than the small business owner who buys from the local farmer, sells to the local patron and hires the local employee. These people are taking care of each other every day in America and supporting them is a privilege.

I am writing to ask for your help. First, please consider doing business with a small business on Small Business Saturday, which this year is on Saturday, November 26. Second, encourage others to do the same, whether they are your family, friends or members of your own community. Third, help us spread the word across your networks. The websites www.sba.gov/saturday and www.Smal lBusinessSaturday.com provide a wealth of information including vendors and other ways to get involved. Tell the businesses you work with to register on the website and to promote their participation. Work with them to prepare for a busy holiday season so they cag maximizethe opporfunity in front of them.

As the holiday season begins I want to take a moment to thank you for all the work you do to support America’s small business community. I know the example we all set helps to drive our nation forward throueh these economic times.

Sincerely,

Michael Chodos
Associate Administrator
Office of Entrepreneurial Development

Nevada Microenterprise Initiative would like to invite you to an upcoming special event we will hold on December 1, 2011 at 5:30pm with Access to Healthcare (AHN), a non-profit discounted healthcare program for uninsured and underinsured Nevadans. AHN offers affordable healthcare services to members and their families.

To qualify for the AHN Discounted Healthcare Program:

• You must be currently uninsured
• You must be able to show proof of all income, such as a pay stub, income tax form or note from your employer, or child support and other money received from any source
• You must live in Nevada and show proof of residency in Nevada through something like a utility bill or rental agreement
• You must show a picture ID
• Your gross household income must be between the incomes listed on AHN’s income eligibility chart, for the number of people you wish to enroll in your membership program (for example, the number of people living in you home as your dependents).
• For more information, please visithttp://www.accesstohealthcare.org/home.asp .

Nevada Microenterprise Initiative is very excited to welcome you to this event so you can learn more about AHN and see if you may qualify for their services.

RSVP by November 25, 2011
ccamenisch@4microbiz.org

to view original message from the Nevada Microenterprise Initiative click here

The Connected World Technology Report surveyed approximately 1,400 college students and 1,400 young adult employees in 14 countries to determine how important technology and Internet has become in their lives. The results show that Internet and technology, such as computers and smartphones, are at the core of daily life for these age groups.

Some of the most telling numbers are that nearly half of students and young employees consider the internet to be close in importance to water, food, air and shelter in their lives. Additionally, more than two-thirds of students would prefer to have access to the internet than a car. This report by Cisco shows a shift in what young consumers consider necessities of daily life and where their attitudes are with regards to technology.

For the full report, visit http://www.cisco.com/en/US/solutions/ns341/ns525/ns537/ns705/ns1120/CCWTR-Chapter1-Report.pdf

Contributor: Jennifer Ott

Although news reports continue to lament on the condition of the economy, there are a few actions taken by the government that could make a real difference in the state of Nevada. Beginning this fall, the State Small Business Credit Initiative (SSBCI) and the Catalyst Fund (SB75) are programs that make money available to small businesses throughout the state. Nevada received an allocation of 13.8 million dollars under the SSBCI to encourage business start-up and expansion through these programs. Each plan works differently; however the effects are the same. More money available to businesses in Nevada equals more jobs and a growing economy.

The SSBCI is a program designed to encourage and achieve funding for small businesses. Through a variety of outlets, funding for small business start-ups and expansions will be easier to receive. The outlets are the Collateral Support Program, the Nevada Microenterprise Initiative, and Nevada Venture Capital.

The Collateral Support Program is designed to enable borrowers to acquire financing through banks that might not be available due to a lack of collateral on the borrower’s part. This lack of collateral could be due to reduced value of business or personal property or reduced value of other assets that might have otherwise been used as collateral in a better economy. Once the program starts in a few months, qualified business owners and potential business owners will be able to receive lending from a financial institution without having to provide the full collateral for the loan.

To be eligible to benefit from this program the borrower must be placed in a qualified industry such as mining, manufacturing, research and development, wholesale and trade, film and digital media productions, office operations or a business existing in technology. Other parameters of the program include maximum collateral deposits of $500,000, with exceptions for businesses that might provide significant job creation or economic impact, and collateral support for up to 35 per cent of the loan amount. The Collateral Support Program allows lenders to approve loans to qualified borrowers with diminished loan collateral which helps grow Nevada’s business infrastructure.

The Nevada Microenterprise Initiative (NMI) is an organization that aids small businesses through a lending program and classes. The SSBCI sets aside funds to support NMI’s lending program. Most of NMI’s clients are small enterprises with five or fewer employees and require less than $35,000 for start-up. With the money from SSBCI, NMI can help small businesses get off the ground and contribute to the overall success of Nevada’s economy.

As set up by the SSBCI, the Venture Capital Fund program sets aside money to contribute to an overall fund as established by the new cabinet-level agency – The Office of Economic Development. These funds will be used to provide money to private sector businesses to encourage start-ups, growth, or new business locations in Nevada. The new Office is in the process of being established, but applications for funding are expected to be accepted soon.

The State Small Business Credit Initiative and the establishment of the Catalyst Fund show movement in a positive direction for Nevada. Each of these programs will support the creation and growth of small businesses thereby making Nevada’s economy stronger by creating job opportunities and forming a sustainable economic business structure.

Keep an eye on the NSBDC website (www.nsbdc.org), the Nevada Commission on Economic Development website (www.diversifynevada.com) or the NMI website (www.4microbiz.org) for future details on these and other business support programs.

by River Jangda
Virginia City, located in Storey County, was established in 1861 and soon became the richest mining town in the world. Today, tourism is the leading industry in Virginia City, and the city is pretty much the same as it was in its heyday. Mine tours, saloons, and museums make the city a historical treasure of Nevada.

With a population of 1,027 (2008), Virginia City accounts for almost a fourth of the total Storey County population of 4,384. The city has grown by 12%, or 123 people from 2003-2008. According to CLRChoice, Storey County population has grown 30.63% since 2000, and it is forecasted to grow by an additional 1.55% by 2014. There aren’t any projected population growth numbers available for VC because it’s such a small community.

Over 1 million visitors flock to VC each year, according to the VC Administrative Office, and about 90% of the tourism is in the summer months. Most of the 1,027 local residents live there year round, although some do leave for the winter months. VC operates year round, and if the weather is nice some of the attractions, such as trolleys and mine tours, will stay open in the winter. One of the museums stays open year round as well.

Labor Market:

Storey County Employment by Industry:

Mining

According to the Storey County Director, Dean Haymore, Comstock Mining Company is definitely going to open the mine back up, maybe as early as the end of this year. Comstock Mining has already gotten their special use permit and they are now waiting on additional state and other permits, which they expect to get soon. There is, however, a lot of controversy surrounding the mine, and the company has gotten a lot of opposition from the local community, see article below.

They have already hired 50 people and they could hire as many as 250 more by the end of the year. This mining project is not short term; this is a huge 30-50 year project that is expected to spur growth in the Storey County area. As far as employment, the hope is that all employees will come from Storey County, as the unemployment rate is high in the area.

KOLO 8 TV article:

Posted: 10:53 AM Aug 13, 2011
Eras Clash on Nevada’s Comstock, Virginia City Could be Home to Mining Again

More than 150 years after the discovery of one of the world’s richest silver veins touched off a mining frenzy that drew thousands of people west and made Virginia City a wealthy boomtown, a mining company wants to resume digging for riches in the dusty hills southeast of Reno.

VIRGINIA CITY, Nev. (AP) – More than 150 years after the discovery of one of the world’s richest silver veins touched off a mining frenzy that drew thousands of people west and made Virginia City a wealthy boomtown, a mining company wants to resume digging for riches in the dusty hills southeast of Reno.

But unlike the scrappy miners who used picks and shovels to chisel away at the massive, underground pocket of silver and gold known as the Comstock Lode, the company’s plans are for open pit mining. They aren’t being met with open arms.

Residents in the historic Comstock region embrace the catacombs of century-old mines with pride and purpose. But these days, it’s not wealth from gold and silver but the mining of tourists lured by the rich history of the Old West that keep the town humming.

Tours are conducted in an old underground mine beneath a saloon, and The Way It Was Museum displays artifacts from the past. Camel and outhouse races and a Rocky Mountain oyster festival keep tourists coming to take a “Step Back in Time” – the region’s marketing slogan.

Residents fear that Virginia City image is threatened by the Comstock Mining Co.’s proposal to use earth-moving machinery to dig up truckloads of earth and process the loads to extract flecks of the minerals that have reached record prices.

With the stock market fluctuating wildly, the price of gold soared lastl week, setting new records – $1,800 an ounce on Wednesday, for example.

Using high-tech modern mapping techniques and historic records, the company says it has identified roughly $2.8 billion in gold, if prices hold around $1,750 per ounce. That’s roughly double the price the company estimated was needed to make the venture profitable.

Doug McQuide, Comstock public relations director, said the company hopes to begin production sometime this year.

Comstock thinks modern mining can coexist with history and complement the tourist trade, he said.

The company purchased the historic Gold Hill Hotel, and has invested in shoring up old mill sites to preserve the region’s history. “We want to be overwhelmingly supported” by the community, McQuide said.

But it has been a tough sell.

For many folks in Virginia City, Gold Hill and Silver City, the idea of open pit mining in this state and national historic district is repugnant.

“Mining does work for Nevada,” said Daan Eggenberger, proprietor of the restored Tahoe House Hotel, an antique-laden lodge on Virginia City’s main drag. “It just doesn’t work in a historic district.”

The National Trust for Historic Preservation named Virginia City to its 2009 list of a dozen “Distinctive Destinations” across the country. The historic mining boomtown still boasts mines, mansions, saloons and museums that provide a glimpse into frontier life.

Founded with the discovery of the Comstock Lode in 1859, Virginia City made so many millionaires that the town was called the “richest place on earth.”

The wealth it generated helped finance the Union cause during the Civil War and to build San Francisco and the Bay area.

Mining has come and gone in the Gold Canyon region since the lode played out. Tailing piles that have stood for decades at old mill sites dot the mountainsides.

In Gold Hill and Silver City, tiny towns a few miles down a twisting highway from Virginia City, residents say their serenity was disturbed last fall when Comstock Mining renewed exploration drilling at an existing site and disclosed it had begun exploration on parts of mining claims it has acquired covering 6,100 acres. Of that, about 1,000 acres is on private property; the rest is public land.

Residents formed the Comstock Residents Association to fight the company’s plan.

Storey County Sheriff Gerald Antinoro understands the dispute. From a bluff outside his front door, he overlooks a canyon to the hills on the other side where heavy equipment has carved a dirt road up the steep slope. For a time, a test drill was erected a stone’s throw from his front door.

He hears the engines, the warning backup beeps, sees the dust. He’s not against mining. “I’m not an opponent and I’m not a proponent,” Antinoro said. But he’s unsatisfied with the company response when he asks how the landscape will be restored once the gold and silver play out.

“They’ve told me several different things and I’ve yet to hear a plan,” Antinoro said. “Hopefully they’ll come up with something pretty soon.”

Comstock Mining has applied to Storey County for a special use permit to expand its exploration drilling. A five-hour hearing on that application drew an overflowing, heavily anti-mining crowd on July 7. The hearing continues Aug. 18.

Corrado De Gasperis, Comstock president and chief executive officer, tried to assure residents and planning commissioners the company wants to be good neighbors.

“We care very much about the rich mining and natural history of the Comstock,” he said. “We want to be judged by our actions.”

Robin Cobbey, 62, who lives with her husband David Toll in Gold Hill, presented the planning commission with a petition signed by more than 300 opponents.

“One thing is clear is that the residents of the area don’t want this,” Cobbey said. “You can’t mitigate an open pit mine that’s 800 feet deep and a quarter-mile wide. It’s there forever.”

Signs have sprung up around town reading, “No Open Pit.” McQuide said the company’s plan is to begin with a “starter mine,” a pit of about 30 acres and roughly 250 feet deep, but he said there’s no plan to excavate the entire region.

Underground mining techniques would be used to mine areas near Virginia City and Gold Hill, he said.

Of the total acreage, “probably less than 10 percent is envisioned as even targeted for pit mining,” McQuide said.

Said hotel proprietor Eggenberger, 65, “Our community has a vibrant tourist economy. They’re looking to destroy that. Spare me the grief of you telling me you’re going to revitalize the Comstock.”

Residents also question how mining can be allowed in a region that includes Superfund sites designated in 1990. They want extensive environmental studies.

The state has issued a permit for mercury emissions controls. Another general air quality permit is pending. But officials said the state lacks authority to require a full environmental study, something that would be required to mine on federal lands. So far, all of Comstock’s activities, except for some exploration, are on private lands.

Behre Dolbear, a worldwide mining technical consulting group, said the Comstock project could conceivably double the precious metals it has estimated.

But that doesn’t sway opponents.

“Virginia City is a changed place now, it’s a tourism destination,” said Chris Chrystal, recently retired from the Nevada Commission on Tourism. “It would not be a good idea to hurt one economic contributor for the gain of another.”

Copyright 2011 Associated Press. All rights reserved.

Links:

Storey County Business Overview
http://www.regionaldatacenter.com/RDC/Storeycounty/busoverview.aspx

Storey County Pop. Statistics
http://www.clrsearch.com/Virginia_City_Demographics/NV/Population-Growth- and-Population-Statistics

KOLO TV: “Eras Clash on Nevada’s Comstock, Virginia City Could be Home to Mining Again”
http://www.kolotv.com/home/headlines/ Eras_clash_on_Nevadas_Comstock_127657228.html?storySection=story

Virginia City News
http://virginiacitynews.com/

20 First Community lending organizations selected to start making loans up to $200,000 under new Intermediary Lending Pilot Program

Release Date: August 4, 2011
Contact: David J. Hall  (202) 205-6697 Or Dennis Byrne (202) 205-6567
Release Number: 11-46
Internet Address: http://www.sba.gov/news

WASHINGTON, D.C. – Startups, newly established and growing small businesses now have a new source of financing backed by the U.S. Small Business Administration as 20 community organizations have been funded by SBA to start making loans up to $200,000 to qualifying small businesses.

Authorized under the Small Business Jobs Act of 2010, the new Intermediary Lending Pilot Program will provide direct loans up to $1 million to 20 community organizations or intermediaries in fiscal year 2011, which in turn will use those funds to help finance small businesses, mostly in underserved markets.

Designed to expand access to capital to small businesses and drive economic growth and job creation, the program will fund 20 additional community lenders in FY 2012.  The program has an additional year of authority in FY 2013 subject to appropriation by Congress.

“The Intermediary Lending Program is an important new tool to support businesses in underserved markets,” said SBA Deputy Administrator Marie Johns.  “Partnering with community lenders will increase points of access to capital for startups and businesses that have been disproportionately affected by the recession.”

One goal of the pilot program over the next two-to-three years is to assess the intermediary model as an effective tool for increasing lower-dollar lending to small businesses and startups, particularly those in traditionally underserved communities.

The first 20 community lending organizations funded by SBA to participate in ILP are:

Organization (Listed in Alphabetical Order)    City, State
Ben Franklin Technology Partners          Philadelphia, PA
Biddeford-Saco Area EDC                           Saco, ME
Business Finance Group, Inc                    Fairfax, VA
Central Minnesota DC                                Andover, MN
Clay-Platte Development Corp.                Kansas City, MO
Colorado Lending Source, Ltd.                 Denver, CO
Cooperative Fund of New England          Amherst, MA
Fresno County EDC                                    Fresno, CA
Grand Central Texas DC                            Austin, TX
Grow South Dakota                                    Sisseton, SD
Mahoning Valley EDC                               Youngstown, OH
NC Minority Support Center                    Durham, NC
Ohio Comm. Dev. Finance Fund            Columbus, OH
Pacific Community Ventures                    San Francisco, CA
PIDC Regional DC                                      Philadelphia, PA
Rural Nevada DC                                          Ely, NV
Seattle Economic Dev. Fund                    Seattle, WA
ShoreBank Enterprise Group                    Ilawco, WA
TELACU Community Capital                    Los Angeles, CA
UP Business Capital                                    Marquette, MI

For more information about the ILP program, visit the program website at http://www.sba.gov/content/intermediary-lending-pilot. To locate your local SBA office, visit www.sba.gov/about-offices-list/2.

For more information about all of the SBA’s programs for small businesses, visit the SBA’s Web site athttp://www.sba.gov.

Tax Tips from Tim Nelson, CPA.

I sat with Tim Nelson today (of Evans Nelson and Company CPAs) and discussed
many of the recent changes of both federal and state taxes that directly affect
individuals and business owners. We covered a number of topics, and thus this
article will likely jump around – much like our conversation.

Consumer Energy Tax Credits (http://www.energy.gov/taxbreaks.htm)

The Consumer Energy Tax Credits (many of which were up to 30% of the purchase
cost of energy efficient products and renewable energy systems) expired at the end
of 2010 and while new credits were passed, they were at lower levels (10 %).

Overhaul of the Tax Code

The Taxpayer Advocate Service (an independent organization within the IRS)
is calling for a major overhaul of the tax code, a task which is being debated by
legislators. The last time this happened was in 1986 (and resulted in the current tax
system we are using). That overhaul took approximately 2 years to complete, and
any current tax code overhaul would likely take at least that long.
(http://www.nytimes.com/2011/01/06/business/economy/06tax.html)

There have been recent talks about levying a tax on services at the state level. The
state revenue increase would be enough to lower the tax on goods. However, many
of the professional service lobbies oppose such a tax on services and thus Tim
considers it unlikely that such a proposal will get out of committee.

Equipment and Start Up Expenses:

Section 179 of the Tax Code allows you to elect to expense certain business
equipment all within the first year. However a business’ ability to do so is contingent
upon their profitability – you can’t expense if you’re not profitable.

However, the Economic Stimulus act of 2008 added a 50 percent depreciation
allowance for qualifying purchases which is not contingent upon profitability. In
fact there is a 100 percent allowance for certain types of furniture, equipment,
leasehold improvements.

The total amount of start-up costs that can be expensed has been increased. These
costs included the cost of professional services, including attorneys, accountants,
Secretary of State costs, business licenses, and tangible items like business supplies,
stationary, and business cards.

Estate Taxes and Gift Tax exclusion

Estate taxes have gone through some major fluctuations over the last three tax
years. In 2009, there was an exemption of 3.5M after which a 45% tax was levied on
the rest of the estate.

In 2010 the estate tax had been allowed to sunset and congress, dealing with
healthcare, did not reinstate the tax. Thus there was the option of either the in-line
$5M exemption with a 35% estate tax rate, or a $0 exemption with a 0% tax rate.

For 2011, the exemption is back to $5M with a 35% tax rate.

Tim highlighted the fact that the recession has creates some great gift tax planning
opportunities. With values being depressed, and with the gift tax exclusion
increasing, many people now have the opportunity to transfer assets either directly
to downstream heirs or indirectly into irrevocable trusts.

Further, one can gift property (especially real estate) at a much lower value and
have it appreciate on the recipient’s end.

Small Business Health Care Tax Credit (http://www.irs.gov/newsroom/article/0,,id=220839,00.html)

The federal government is encouraging small businesses to provide health
insurance for their employees. Small business employers who are paying their
employees an average of $50k or less per year can get a credit (up to 35% of the
premiums paid) for providing health insurance for their employees.

HIRE Act (http://www.irs.gov/businesses/small/article/0,,id=220745,00.html)

Additionally, businesses are being encouraged to hire – if a business hires for a
new job (or an under very certain conditions hires for an existing position) they
can receive a credit for the payroll taxes for the employee for a period of time, and
if they are still employed a year later they receive another $1k for each additional
person on the payroll.

No More Golf Carts

Tim laughingly lamented the end of the Golf Cart Credit which was a tax credit based
on the purchase of electric cars. However, the criteria for the eligible vehicle were
such that golf cart companies soon realized those who purchase their golf carts

could legitimately claim tax credits. Some of the credits, when calculated, would
equal the cost of the golf cart.

Not surprisingly, that tax incentive was not continued in 2011.

Home Office Deductions (http://www.irs.gov/businesses/small/article/0,,id=204169,00.html)

One place where many individuals make mistakes is in the use of home offices. For
employees, the use of home as a place of work must be for the convenience of the
employer (there must be a statement in writing to that effect). Additionally, for
employees and business owners alike, the space itself must be used exclusively for
work. Tim has battled with IRS agents before over the exclusion of specific areas
of a home office because of the existence of personal items within those areas (like
family photos, etc). Thus it’s important that one fully understands the rules of home
office deductions before attempting to deduct expenses for the business use of one’s
home.

General expense deductions

In general, Tim sees the most mistakes when it comes to documenting the expenses
within a business, especially for car mileage and business trips. Expenses must be
ordinary, necessary, and reasonable.

Business in a down economy

While Tim and I agreed that it’s hard out there for businesses, he sees the silver
lining. “It’s also one of the best times,” said Tim, “because when the economy is
down it stirs people to be more creative, entrepreneurial.” Tim has seen a huge
uptick in the number of new businesses approaching him for accounting assistance.

Evans Nelson and Company CPAs is located at 50 Continental Drive, Reno, NV
89509. Tim Nelson can be reached at 775-825-6008 and found at his website
www.bestcpareno.com.

The Nevada Division of Health Care Financing and Policy (DHCFP) is inviting the public to a public meeting held by the state of Nevada to begin to plan for the establishment of a Health Insurance Exchange. For more information see the letter from the Nevada Department of Health and Human Services.

• April 26, 2011 – 10am to 12 noon,  Grand Sierra Resort, Reno
• April 27, 2011 – 1pm to 3pm, Cashman Convention Center, Las Vegas

NO RSVP REQUIRED

Gloria Macdonald, CPA (775) 687-8407 – gloria.macdonald@dhcfp.nv.gov

Jennifer Benedict, MSSW (775) 687-8408 jennifer.benedict@dhcfp.nv.gov

VIEW ANNOUNCEMENT LETTER for more details

The Affordable Care Act, the health reform legislation passed into law a year ago, is giving small businesses important tools to help them compete, create jobs and drive economic growth. It’s critical that small businesses take full advantage of the new benefits and consumer protections of the law and understand the positive impact health reform will have on their operations. The SBA and the entire Administration is committed to working with the small business community to ensure that they know about tools in the Affordable Care Act that will help small businesses start-up, succeed, and grow.

Already, the Affordable Care Act is providing tax credits of up to 35 percent of employee premium costs, helping small business owners reinvest thousands of dollars to grow their business and create jobs at tax time.

Eligibility for Tax Credits

Generally, tax credits are available for small business owners who:

· Have started or continued health insurance coverage for employees in 2010

· Contribute at least 50 percent of employee premiums at the single coverage rate

· Have fewer than 25 full-time employee equivalents (part-time employees are counted proportionately)

· Pay their employees an average of less than $50,000

The IRS has provided a simple three-step worksheet (below and at www.irs.gov/pub/irs-utl/3_simple_steps.pdf) to help determine your eligibility:

Four million of the nation’s six million small businesses that employ workers could be eligible for these credits. For small businesses, the maximum tax credit is 35 percent of the business’ premium costs, and for small nonprofit organizations, the maximum credit is 25 percent. On Jan. 1, 2014, these rates will increase to 50 percent and 35 percent, respectively. These credits phase out for firms with average wages over $25,000 and for firms with the equivalent of more than 10 full-time employee equivalents.

Effectiveness of Tax Credits to Date

While nearly all firms with more than 200 employees offer health insurance benefits, smaller U.S. firms are much less likely to offer coverage because their premium costs are about 18 percent higher than the same coverage for larger employers. They also have less purchasing power in the health insurance marketplace. Early signs show that these tax credits are stimulating activity in the health insurance market.

A Los Angeles Times report of increased market activity in the small group market at the end of 2010 included three examples of how these tax credits show initial signs of promise:

• UnitedHealth Group (Minnesota) added 75,000 new customers who work for businesses with less than 50 employees
• Coventry Health Care (Maryland), an insurer that focuses on small businesses, signed contracts to cover 115,000 new workers, an increase of 8 percent.
• Blue Cross Blue Shield of Kansas City reported an increase of 58 percent in the number of small businesses buying insurance.

Also, a report from the Lincoln Journal Star in February noted:

• Blue Cross and Blue Shield of Nebraska reported a 34 percent increase in health insurance sales to small businesses for 2011.

In addition, other insurers such as CareFirst Blue Cross Blue Shield of Maryland have announced that they are specifically marketing their products to small businesses due to this credit.

Small businesses themselves have also reported on how these tax credits are helping them provide coverage to employees. Just a few examples from around the country include:

• Mark Hodesh, owner of Downtown Home and Garden in Michigan, was able to claim $15,000 on his tax return this year and hire an additional employee.
• Kiersten Firquain of Bistro Kids in Kansas City was able to start providing coverage to her chefs last year for the first time.
• John and Angela Sweet of Niedlov’s Breadwords in Tennessee had been wanting to offer insurance for some time, and when these tax credits made it more affordable, they “jumped at the opportunity.”

If you are interested in learning more about various health insurance plans that are available in your area, I encourage you to visithttp://finder.healthcare.gov where you can quickly compare them.

2014: Higher Credits and “Exchanges”

In 2014, the tax credits for small employers who provide coverage will increase from 35 percent to 50 percent. At the same time, small business owners should be aware that states will simultaneously roll out small business “exchanges” that will allow employers with less than 50 employees to band together to leverage their collective buying power, reduce administrative costs, and negotiate fairer rates from insurance companies. These exchanges will be available online, and an independent study suggests that they will help reduce costs and increase competitive pressure on insurers, driving down premiums for small businesses by up to 4 percent.

Repeal Efforts

The President supports eliminating a bookkeeping provision that would unfairly burden small businesses. The Administration continues to work with Congress to repeal the expanded 1099 reporting requirement, which is too big of a paperwork burden on small business owners. Repealing the entire law or preventing key provisions from being implemented, however, would hurt small businesses by:

• Raising taxes on up to 4 million small business owners who provide employees with health insurance coverage
• Preventing the formation of a marketplace where insurance companies compete for your hard-earned dollars
• Stifling the ability of entrepreneurs to break out on their own to help America compete in the 21st century

The Affordable Care Act uses market based incentives, such as tax cuts and cost savings, to make quality, affordable health insurance available to all Americans. There is no requirement, mandate, responsibility, penalty or fee of any kind for small businesses with less than 50 workers who choose not to provide insurance, which represents 96 percent of all U.S. firms.

The President has also backed a bipartisan proposal to allow states to implement alternatives to the law beginning in 2014 if those alternatives are able to meet the shared goals of making health insurance affordable and accessible to all Americans, including those with pre-existing conditions.

Instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.

Access to affordable health care is the number-one concern for small businesses across the country. I have worked with many small businesses over the years that are looking at every possible option to offer coverage for their employees, who they often consider to be members of their own family. In 2009, I met a small business owner in New Jersey who said that the day she was able to provide health insurance coverage was the day she knew that her business was a success.

I encourage you to work with your tax adviser, accountant and/or bookkeeper to actively explore the tax credits, exchanges, and other provisions in the Affordable Care Act to help you grow your business and create jobs.

####