The Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, contains provisions attempting to promote job creation and stabilize the economy. Here are some major provisions which may affect you and your business:
Foreign Account Tax Compliance: In the wake of UBS and the IRS Offshore Voluntary Disclosure Program, the HIRE Act rules have comprehensive measures to reduce offshore noncompliance with new tools which discourage perceived offshore tax abuse. One provision requires an individual with an interest in a specified foreign financial asset to attach a separate disclosure statement to his tax return in any year where that individual’s aggregate value of foreign assets is over $50,000. This statement does not replace the current FBAR (Form TD F 90-22.1) and carries some large penalties for noncompliance.
Payroll Tax Holiday: The HIRE act exempts a “qualified employer” from paying the employer’s share of the social security tax with respect to any “qualified individual” hired after March 18, 2010 and before January 1, 2011 (a savings to the employer of 6.2% of the new employee’s wages). A “qualified employer” is generally any employer other than the state and a “qualified employee” is generally an employee who has not been employed full time for two months before the subject employment.
Increased Section 179 Expense: The Hire Act increased the amount of the Section 179 expensing deduction to $250,000 (from $134,000) for 2010.