Factoring News – January 2012

TAXES 2012: Things all SMEs Need to Know

To make eligible contributions to an individual retirement account, or an employer-sponsored retirement plan, you may be eligible for a tax credit — but this will all depend on your income and age.

There are basically six things the IRS wants you to know as follows:

  1. Limits to income – The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and 2011 income of:
    Single, married filing separately, or qualifying widow(er), with income up to $28,250Head of Household with income up to $42,375
    Married Filing Jointly, with incomes up to $56,500
  2. Eligibility – requirements to be eligible for the credit you must be at least 18 years of age, you cannot have been a full-time student during the calendar year and cannot be claimed as a dependent on another person’s return.
  3. Credit amount – If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 ($2,000 if filing jointly). The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.
  4. Distributions – When figuring this credit, you generally must subtract distributions you received from your retirement plans from the contributions you made. This rule applies to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date – including extensions – for filing the return for the credit year.
  5. Misc. tax benefits – The Retirement Savings Contributions Credit is in addition to other tax benefits you may receive for retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.
  6. Forms – To claim the credit use Form 8880, Credit for Qualified Retirement Savings Contributions.

For more information, review IRS Publication 590, Individual Retirement Arrangements (IRAs), Publication 4703, Retirement Savings Contributions Credit, and Form 8880. Publications and forms can be downloaded at www.irs.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Choosing an Invoice Factoring Company

One common reason for choosing a certain invoice factoring company is better pricing or better terms. While the factoring industry is competitive and prices and terms can vary, you should also take “hidden costs” as well as “intangibles” into account. For example:

Commitment – Are they asking for a commitment of 6 months to a year, with penalties for leaving prior to your contract expiration date? -more-

Manufacturing is Growing

Recently good economic good news has been hard if not impossible to come by. So it’s surprising that according to the ISM index, manufacturing has been growing for 25 consecutive months. Although experts consider manufacturing to still be weak, at least it is in positive territory. -more-

NEWS

NFIB Survey: December Job Openings Level Offers Hope for U.S. Economy

BETHESDA, MD–(Marketwire–January 27, 2012)–According to the Interface Financial Group (IFG), factoring is an ideal alternative funding solution for small to medium-sized enterprises (SMEs) at this point in the United States’ economic recovery. According to the latest National Federation of Independent Businesses Survey, job openings and hiring plans were at a level high for December 2011. It was the second highest level since 2007 when the recession began, providing small to medium-sized businesses (SMEs) with hope that an improvement in the economy is in sight. -more-

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