Paychex Provides Five Tax Tips Small Business Owners Need to Know about before the New Year

  Paychex Provides Five Tax Tips Small Business Owners Need to Know about
  before the New Year

Business Wire

ROCHESTER, N.Y. -- December 10, 2013

As business owners conduct their year-end tax planning, there are five tax
regulations and credits they should evaluate before the New Year. Because it
is unknown if Congress will address these and other related tax provisions
before the end of the year, Paychex, Inc., a leading provider of payroll,
human resource, insurance, and benefits outsourcing solutions for small- to
medium-sized businesses, today released these tax tips for consideration.

“2013 has been a year of numerous regulatory and legislative changes that have
tax implications for business owners,” said Paychex President and CEO Martin
Mucci. “Paychex is dedicated to helping business owners understand these
changes and the potential opportunities that exist for them to reduce their
tax liability and save money. Fortunately, there is still enough time left in
the calendar year for business owners to quickly consider the options
available to them and determine if they can help their business.”

The five tax tips identified by Paychex are:

  *Small Business Tax Credit

Certain small business owners who offer health coverage to employees can apply
for the small business tax credit to help offset the cost of premiums, and
those who don’t may now be able to afford it. Starting in 2014, the credit
will be available to small employers who offer health benefits to their
employees through the Small Business Health Options Program (SHOP)
marketplace. Also in 2014, the amount of credit available to small business
owners will increase. On November 27, the Health and Human Services (HHS)
Department announced a one-year delay in online applications for the federally
facilitated SHOP; however, the program itself has not been delayed. Employers
can view plan options and which insurance companies offer SHOP-qualified
health plans in their area on the website. With the delay of
the online applications, employers will need to work with an agent, broker, or
insurer to purchase coverage.

Employers can utilize the Paychex Small Business Tax Credit Calculator to
determine if they qualify for the credit, and if so, how much the credit will
be. For more information about the small business tax credit, information on
Paychex solutions, and coverage options, visit

  *Defense of Marriage Act

The United States Supreme Court’s ruling on the Defense of Marriage Act
earlier this year has had a significant effect on many federal laws including
those related to payroll taxes, health insurance, and employment. The effect
on state tax withholding will vary by state depending on whether the state
recognizes same-sex marriages and/or chooses to follow the federal rules. This
change in the law will not only affect the taxable income of employees, it
will directly affect an employer’s tax liability because it is determined by
the taxable income of employees. Individuals affected by this change also have
the option to claim refunds and/or request adjustments due to overpayment of
FICA taxes, and employers may be entitled to a refund of Federal Unemployment
Tax Act (FUTA) taxes on wages paid to a legally married, same- gender spouse.

  *Establish a Retirement Plan

If your business is considering starting a retirement plan, doing so before
the end of the year is a good idea as it will allow you to write-off some of
the set-up expenses and benefit from the tax advantages of any plan
contributions. Businesses don’t have to start contributing to these plans
until 2014.

  *Business-Advantaged Tax Extenders

If Congress doesn’t pass legislation by the end of the year, several popular
and beneficial business tax provisions will expire or be reduced in 2014.
These include: accelerated Section 179 expensing for equipment, computer,
software, and similar purchases; the 50 percent bonus depreciation; and the
credit for research and development expenses. While these may be reconsidered
by Congress next year, given the uncertainty in Washington, businesses may
want to take advantage of the current provisions before the end of 2013.

  *FUTA Credit Reduction

The U.S. Department of Labor has released the listing of FUTA Credit Reduction
States for 2013. The Federal Unemployment Tax Act provides funds to the state
unemployment tax systems. When the state funds are exhausted, the state may
receive a loan from the federal fund. If the state is not able to pay back the
loan in a timely fashion, the FUTA credit amount of 5.4 percent will be
reduced as a way to recover the funds still owed. For 2013 there are 13
states, California, New York and Ohio among the largest, in addition to the
Virgin Islands that are subject to a reduction of their FUTA credit. Employers
in these states should budget accordingly, as their FUTA tax will increase
retroactively to January.

For further information on how these opportunities might apply to your
business, consult with your licensed attorney, accountant, or other tax
professional to discuss your particular circumstances. Additional information
related to payroll, taxes, and year-end planning is available on

About Paychex

Paychex, Inc. (NASDAQ:PAYX) is a leading provider of payroll, human resource,
insurance, and benefits outsourcing solutions for small- to medium-sized
businesses. The company offers comprehensive payroll services, including
payroll processing, payroll tax administration, and employee pay services,
including direct deposit, check signing, and Readychex®. Human resource
services include 401(k) plan recordkeeping, section 125 plans, a professional
employer organization, time and attendance solutions, and other administrative
services for business. A variety of business insurance products, including
group health and workers' compensation, are made available through Paychex
Insurance Agency, Inc. Paychex was founded in 1971. With headquarters in
Rochester, New York, the company has more than 100 offices serving
approximately 570,000 payroll clients as of May 31, 2013. For more information
about Paychex and our products, visit

Stay Connected with Paychex


Paychex, Inc.
Lisa Fleming, 585-387-6402
Public Relations Program Manager
Eric Mower + Associates
Tom Brede, 585-389-1870
Counselor, Public Relations and Public Affairs
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