What do small-business owners need to pay attention to this fall? Heath care, Internet security and new technology make the list. Here are five things that small businesses need to be on top of over the next several months:
HEALTH CARE: Small-business owners who bought employee health insurance policies before the end of 2013, sidestepping the law’s requirements for a year, could pay between 10 percent and 20 percent more when it’s time to renew, says Michael Stahl, chief marketing officer of HealthMarkets Inc., a broker based in North Richland Hills, Texas. They’ll also have to decide on plans. Policies issued under the law have significant changes including the requirement that pre-existing conditions be covered. Some owners may decide it’s better if workers purchase their own government-subsidized coverage on health insurance exchanges.
Companies whose coverage took effect Jan. 1 of this year and complied with the law could see increases between 5 percent and 10 percent for 2015, Stahl says. Not all small-business owners will have to make these decisions this year. Employers with 50 to 99 workers have until 2016. Companies with fewer than 50 workers are exempt.
INTERNET SECURITY: Home Depot Inc.’s news that it was hacked should prompt small businesses to improve Internet security, says Charles Tendell, CEO of Azorian Cyber Security in Denver. Small companies tend to be vulnerable to hacking because many don’t have strong Internet security.
Businesses should install software designed to protect computers from viruses and what’s called malware, programs used to harm computers or steal information, Tendell says. If companies offer Wi-Fi to customers or visitors, it should be separate from their operations. Owners should consider hiring an Internet security expert who can show them where their vulnerabilities are and suggest a solution, Tendell says. Owners should also train employees to help avoid hacking attacks.
NEW TECHNOLOGY: Businesses interested in accepting Apple Pay, the digital payment system linked to the new iPhone 6, will need to invest in equipment that processes contactless payments. Contactless payments are transactions made by tapping a smartphone, credit card or key fob on an electronic device.
Small-business owners should also look ahead to October 2015, when credit and debit cards will be required to have embedded chips rather than magnetic strips, says Denee Carrington, an analyst with Forrester Research. Businesses will need new equipment to accept those cards, but the good news is they can already buy equipment that also processes contactless and swipe transactions.
Microsoft is expected to release its Windows 9 operating system for laptop and desktop computers by early next year. But owners shouldn’t rush to buy it until they know whether it’s compatible with computers, hardware like printers and software they use to run their companies, says David Rosenbaum, president of Real-Time Computer Services, a technology services company in New York. If owners have aging PCs that need to be replaced before there are more answers about Windows 9, they’re better off getting machines with the better-known Windows 7 or Windows 8.1, Rosenbaum says.
INTERNET SALES TAX: After the November elections, Congress could act on legislation that would force retailers and other companies to collect sales tax in states where they don’t have a store or other physical locations. Under current federal law, online, phone and mail-order transactions are exempt from sales tax. The legislation has support in the Senate, which passed a preliminary bill earlier this year. It faces opposition in the House.
The legislation is supported by retailers required to collect the tax. They can lose business to out-of-state retailers who don’t have to collect it. Small retailers contend it will cost them time and money to collect the tax.
TAX DEDUCTIONS: The size of companies’ 2014 tax bills will depend on whether Congress raises what’s called the Section 179 deduction. It allows small companies to deduct up-front rather than depreciate the cost of equipment like computers, vehicles, furniture and manufacturing machines. The deduction, set at $500,000 during 2013 to help businesses continue their recovery from the recession, fell to $25,000 for 2014. The House has voted to set the deduction permanently at $500,000. Senate leaders have opposed that increase.
The House also voted to revive a tax break called bonus depreciation, which allows businesses to immediately deduct up to 50 percent of the cost of property and equipment. It also faces Senate opposition.