The NC legislature has created a new tax credit for NC Businesses that will refund some of the unemployment taxes they have had to pay on NC workers. Once the forms are finalized we'll have to see how this works out, but it could offer some real benefit to NC Businesses who have been hit hard by increasing unemployment rates.

"Effective for the 2010 and 2011 taxable years, small businesses with cumulative gross
receipts from business during the taxable year not exceeding $1,000,000 may claim a
refundable income tax credit equal to 25 percent of contributions made during the taxable
year to the State Unemployment Insurance Fund for wages paid for employment in North
Carolina." Source

G.S. 105-129.16J.
Temporary unemployment insurance refundable tax credit:
A new section was added to allow a tax credit for small businesses that make
contributions to the State Unemployment Insurance Fund with respect to wages paid for
employment in this State. A small business is defined as a business whose cumulative
gross receipts from the business activity for the tax year do not exceed one million
dollars ($1,000,000). The amount of tax credit allowed is 25% of the qualified
contributions to the State Unemployment Insurance Fund and applies to taxable years
2010 and 2011 only.
This credit may be claimed only against corporate and individual income taxes. If the
credit exceeds the amount of tax for the taxable year reduced by the sum of all credits
allowable, the excess is refundable. The refundable excess is governed by the
provisions governing a refund of an overpayment by the taxpayer of the tax imposed in
Article 4. In computing the amount of tax against which multiple credits are allowed,
nonrefundable credits are subtracted before refundable credits.

The IRS has tightened up in response to the abuses it saw over the years dealing with donating a used car to a charity to get the deduction of its fair market value. They rewrote the tax laws so that you can only get a deduction for what the charity sells the car for if it disposes of the car. Clark Howard notes that some charities are selling the cars to brokers at liquidated prices, and leaving the donors high and dry with a paltry deduction. The moral, do your research before you donate and find out what the charity plans to do with your car and where it will likely end up. More info about donating a car at Edmunds.com

President Obama today signed the new small business tax bill that offers accelerated deductions that are aimed to stimulate investment in equipment and grow the economy. The details of the bill are outlined well here. The biggest benefit I see is increased immediate expensing of equipment in 2011 (the prior limit was set at 25,000, and now it is 500,000), the continued increase to the luxury car depreciation limits, and the health insurance deduction for the self employed when figuring self employment taxes.

More info.

Quickfinder.

CCH.

In a follow up to this post, Cornell University and other nonprofits are facing greater scrutiny as they compete with private businesses on an even playing field. To level the playing field of taxation, the IRS assess Unrelated Business Income Tax on charities and other tax exempt entities (Your IRA) when they delve into the business sector). Read more here.

If you have someone over 18 that you have hired as a nanny, housekeeper, maid, private nurse, caretaker, butler, or personal assistant and they work in your home then you likely will owe the employment taxes for your household worker. If you pay a person more than 1,700 in 2010 then you must worry about this tax. You will report the salary at the end of the year on a form W-2 and also on your personal tax return. You will be responsible for submitting the social security taxes on their wages, as you are the employer. For more info on this aspect of income tax, read here.

Those with flexible spending accounts will find that part of the Obama health care changes include a change to what is an eligible expense for their FSA or HSA. Over the counter medications are not going to be reimbursable in 2011 unless they are prescribed by a doctor (so stock up now). This will also make is more difficult to spend and remaining FSA dollars at the end of the year so that they won't be lost. This law change will align the definition of deductible medical expenses for schedule A, FSA, and HSAs.

More Info