Have you checked your Flesch-Kincaid levels lately?

If you’ve ever yawned your way through a wordy, boring document, you might have wondered if your own writing was as hard to understand. Luckily, there’s a great tool to measure the readability of your writing, and it’s as close as your word processor. (Note: For this article, we use Microsoft Word as our example. Details will vary if you use another application.)

Microsoft Word uses the Flesch-Kincaid method to determine readability scores. If you’ve noticed the Readability Statistics pop-up that appears at the end of a spelling and grammar check, you’ve probably seen the Flesch-Kincaid Grade Level under the Readability heading. That score matches the readability of the writing to a U.S. school grade level. Basically, the lower the grade, the easier it is for readers to understand.

As an example, this blog article scores at 8.3, which means it can be easily read by the average eighth grader. This chart shows the readability at each grade level:

If you’d like to make your writing suitable for the largest possible audience, we have a few tips:

• Vary your sentence structure. Using too many short sentences creates choppy copy, while using too many long sentences makes things hard to read. A mix of long and short sentences works best.
  
  
• Know your audience. If you’re writing technical copy, something too simplistic will risk boring them. If you’re writing for family and friends, however, you may want to dial back the big words.
  
  
• Make your copy easy to scan. Especially if it will be read on a laptop screen or a mobile device, use shorter paragraphs or bullets, or bold important points.

Even if you’re just writing a letter to Aunt Marion, paying attention to your readability score will make your audience appreciate the easier reading—even if they don’t realize what they’re appreciating. Here’s to plain English and clearer writing!

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Easy ways to save on energy costs

Over the past year, we’ve all spent more time than usual at home—which may mean you’ve paid more attention to your utility bills than in previous years. If you’ve noticed a creep upward, here are some easy ways to help keep your energy costs down.

Use energy-efficient light bulbs—CFL and LED bulbs offer more energy efficiency than incandescent bulbs. CFLs are the more budget-friendly choice and use about 75 percent less energy compared with incandescents (LEDs use about 80 percent less energy but are still expensive to buy, although prices are coming down).

Use Energy Star-rated products—Those stickers you see on appliances have helped users save more than $30 million dollars on utility costs and reduce greenhouse gases. An Energy Star-rated appliance can cut bills for that product by 30 percent.

Change your furnace filter—Experts say you should change your furnace filter once a month. It will not only help extend the life of your furnace, it’ll lower energy costs. And as a bonus, the air quality in your home will be more comfortable for allergy sufferers and healthier for everyone.

Clean your dryer’s lint screen and duct—According to the Consumer Energy Center, a clogged lint screen can increase your dryer’s electrical use by 30 percent, or $25 a year. A blocked dryer duct will not only make your dryer less efficient, it’s a fire hazard. You should clean your lint screen after every load…and the duct yearly.

Unplug electronics when not in use—The Department of Energy estimates that when small electronics (toaster, coffeepot, etc.) are plugged in and turned off, they continue to suck an additional $100 worth of electricity per year. Unplug them when not in use or plug them into a power strip and turn off the strip until needed.

Close your curtains in the summer—Here’s a super-basic, super-easy tip to end on. In the summer, keep your curtains closed during the day to prevent the sunlight from heating up your home. This simple step can reduce incoming heat by as much as 30 percent.

When you were young and your parents yelled, “Turn off the lights when you leave the room! Is our name Edison?” they weren’t just being cranky. The fact is every little bit does add up…to bigger savings. Try some of these easy ideas for reducing energy costs and see if your utility bills don’t start inching downward.

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Take advantage of your tax season takeaways

What do accountants do with themselves after tax season? Actually, the same thing they do during busy season: They work hard for their clients. The only difference is that instead of cranking out tax returns, they help clients work through other aspects of their financial health—including issues revealed during the yearly tax return process.

That’s why the best time to work with your accountant on any takeaways or questions is right after tax season…when everything is fresh in your mind. Here are some examples:

Is there a way to reduce my tax bill?
Your accountant can help you understand opportunities for lowering your tax bill. A popular option is contributing money to an individual retirement account. Work with your accountant to see if this is a strategy that makes sense for you—and if not, to discover other ways to save.

How do I handle <insert complicated tax situation here>?
If your tax situation is outside the basics—you experience a major life change (adopting a child, receiving an inheritance), you own rental properties or you have complex investments—an accountant can help you structure your finances appropriately for the next tax season.

Now, if you’re a business owner, you may have additional questions, such as:

Am I still using the right business structure?
If you own a business, it may be time to move to another structure with more advantages for your situation. You may have started as a sole proprietor, but have grown enough that a limited liability company (LLC) or S-corporation structure would be a better fit. Your accountant can help you assess the options.

How can I adjust my cash flow? Manage my debt? Adjust my budget? Keep payroll accurate? Handle unpaid invoices?
There’s so much to keep up with as a small business owner. An accountant can work with you to manage your revenue through ebbs and flows, consider the best borrowing strategies for your business, create a realistic and accurate budget, handle your payroll and set up invoice systems with automatic reminders for your customers—freeing you to work on your business.

It’s hard to be objective about our own financial situations, whether personal or business, and that’s where accountants excel (no pun intended). They bring so much insight and experience to the table. Why not give your accountant a call today, and see how she or he can help you be prepared for whatever next tax season brings?

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Put your tax refund to work for you

Spend it? Save it? Invest it? Share it? Here are a few ideas for putting your tax refund to work for you:

Build the emergency fund. As we discovered in 2020, it’s too easy to be taken unawares by illness, job loss or other disasters. Use your tax refund to start or add to your emergency savings account, so you’re not left using credit cards to meet vital expenses.

Pay down high-interest debt. If you don’t pay off your credit cards monthly, or you’re paying down loans, this is your chance to lower your debt and reduce the amount of interest you owe—which, depending on the credit card, can be quite substantial.

Make a donation. It feels great to help a cause that’s close to your heart. If your finances are in good shape and you don’t need the money, donate all or part of your refund to your favorite charity. Bonus: If it’s a tax-deductible donation, it can be a deduction for you next year.

Invest in your kids’ education. According to U.S. News, from 2001 to 2021, the average tuition growth at national universities rose by 50 percent or more. Given that increase, adding your refund to their college funds wouldn’t be the worst use of the money.

Invest in your home. Does your house need some overdue repairs? Are your creaky appliances begging to be replaced? Whether you rent or own, improvements and repairs can pay for themselves in lower utility bills and/or increased value.

Invest in yourself. Take an online class, pay for a professional certification, attend a conference, re-up your gym membership (IF you’ll use it), buy a better mattress. If it can improve your earning potential or your health, it’s a good investment.

Spend a small amount on something fun. No one says you can’t use a bit of your refund (say 10 percent) to do something nice for yourself—while using the rest of the refund wisely. A $500 refund gives you $50 to treat yourself to something you’ll enjoy.

A tax refund isn’t found money; it’s money you earned and loaned to Uncle Sam interest-free for a year. So, take advantage of it! Whether you fund an IRA, save for a down payment on a home, pay down your mortgage, invest your refund or buy life insurance, its lasting effects will ripple through your life long after the check has been cashed.

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Accounting terms: A glossary for the rest of us

Most professions have their own lingo, and accounting is no different. What is different is that you have a vested interest in understanding what your accountant tells you about your financial situation. So, here’s a quick primer on common accounting terms—some business-related, some general—to keep you in the know:

• Accounts payable—The amount of money you owe to other people.
  
  
• Accounts receivable—The amount of money people owe you for goods or services you provide.
  
  
• Assets—Property/equipment you own with a monetary value (cash, vehicles, stock, accounts receivable).
  
  
• Balance sheet—A financial document that provides a snapshot of a business’s assets, liabilities and owner equity.
  
  
• Business entity—The legal structure of a business (sole proprietor, partnership, LLC, S-Corp).
  
  
• Cash flow—The movement of cash in and out of a business. Ideally, you want a higher flow of income into the business than expenses going out.
  
  
• Credits/Debits—In accounting, credits are money coming in, while debits are money going out (note: this is reversed in banking).
  
  
• Depreciation—An asset’s loss in value over time (an automobile, a building, a computer).
  
  
• Equity—The net worth of a company when liabilities (what’s owed) are subtracted from assets (what’s owned).
  
  
• Expense—Any costs incurred by you or your business.
  
  
• Liabilities—Debts owed to another person or entity that you’re responsible for paying.
  
  
• Net profit/loss—Total revenues minus total expenses equal net profit (if revenues are positive) or net loss (if expenses exceed revenue).
  
  
• Overhead—Expenses related to running a business (mortgage/rent, utilities, payroll, property taxes, supplies).
  
  
• P&L—The profit & loss statement (P&L) is an overall look at how well your business has performed and how much income you made or lost over a given period.
  
  
• Revenue—The income a company brought in from the sales of goods or services, before subtracting expenses.
  
  
• ROI—Return on investment (ROI) is how much you gained or lost on an investment relative to the amount of money you spent on it.
  
  
• Working capital—The amount available to run your business when current liabilities are subtracted from current assets.

While these definitions aren’t detailed, they should be enough to let you chat knowledgeably with your accountant—especially if you’re a small business owner. If you’d like to know more, a quick Google search of “accounting glossary” will give you a number of detailed sites to peruse. Here’s to being an informed client!

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Plan now for your spring garden

There has rarely been a winter when we so badly needed to see (and feel) spring. Depending on where you live, this could mean bluer skies, warmer temperatures, time outside and…gardening! For those who live in a climate where spring doesn’t always mean it’s warm enough to garden outdoors, consider creating an indoor planting box for flowers, veggies, herbs or all of the above.

No matter where you live, there are things you can do now to be prepared for the moment Mother Nature lets you outside to play in the dirt.

• Inventory your gardening supplies—Are your gardening gloves, shoes, tools, seed starting materials (pots, trays, etc. if you start your seedlings indoors) or anything else you use missing or in need of repair? Now is the time to take inventory, comparison shop and order replacements if necessary.
  
  
• Decide what to plant and order your seeds—This is the perfect excuse to lose yourself in seed catalogs or visit garden supply websites. Making a list now avoids uncertainty later when you’re at the local nursery and what you’d decided on or had your heart set on isn’t available.
  
  
• Decide where to plant—You don’t need to be an artist or purchase design software to draw a diagram of what you’d like to plant and where. A piece of paper and a sharpened pencil is all you need to start plotting your garden layout. For indoor gardening, start to scope out the perfect spot indoors to ensure your “crop” has proper lighting and won’t be in the way of everyday living.
  
  
• Stock up on plant growth aids—You know you’ll need them, so why not go ahead and purchase your pesticides, fertilizers, weed barrier and plant ties so you’ll have them readily available?
  
  
• Make up your plant markers—If you use plant markers for your garden, make them now so they’ll be at hand when the first seeds are planted. Bonus: This could be a good project to keep little hands busy when they can’t go outdoors.
  
  
• Keep a garden idea journal—Write down ideas, save pictures and articles that inspire you throughout the year, and go through them when it’s time to start planning. Pinterest is a great solution to maintain an online idea journal.
  
  
• Join an online gardening forum—Share your love of all things horticultural with gardeners from all around the world. You’ll get ideas for your garden (indoor or outdoor) and may be able to help rookie gardeners solve their own issues.
  
  
• Choose a new garden ornament—Just because you can.

Time spent on planning during the cold, dreary days of winter can pay off in the verdant, colorful garden of your dreams come spring and summer. Take that time now—and don’t forget to share photos!

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How to tune up a home office when you don’t have one

While “under a blanket on a cold winter day” isn’t the worst place to work, it’s a good idea to regularly assess your remote working environment—especially if you don’t have a full home office setup—to decide if anything needs an adjustment or upgrade. Here are four important points to consider:

1. Desk—Instead of working at the dining room table or on the couch, is there a corner of your home that can accommodate a small desk? Furniture makers have stepped up to offer compact foldable or easy-to-disassemble desks that let you reclaim your space on the weekends.
   
   
2. Seating—A dining room chair is meant to be comfortable for an hour, not a full workday. Ditto for the couch or your bed. Is it time to upgrade to a “real” office chair? If you don’t have room for an office-style chair, consider a lumbar pillow to add back support to the seat you use now. Or add a standing desk converter that you can set on a tabletop to give yourself standing breaks during the day.
   
   
3. Computer setup—How far do you have to crane your neck to see your laptop screen? Do you constantly zoom in to read text on the monitor? Do you have all the monitors you need? A laptop stand and monitor riser will elevate your screens so they’re level with your eyes, give you more screen real estate, and save you a (literal) headache and painful neck strain. And don’t forget the external keyboard to save those wrists and hands.
   
   
4. Lighting—Have you escaped the harsh glare of office fluorescents only to squint in a dim corner at home? Lighting is one of the most important factors for a comfortable workspace. While natural light is best, if that’s not an option, look for ways to diffuse lamp light. Choose floor lamps that shine upward, use lampshades to soften bulb harshness, and experiment with placement to avoid casting shadows or workspace glare.

Check with your employer to see if the company will pay for equipment upgrades. If that’s not possible, it’s still a good idea to consider making these changes because they’re not only good for you physically but could also be for others in your family who are working from home.

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6 tips to fight the mid-winter blues

Blah. It’s February. The depths of winter. Gloomy days relieved only by the darkness of night. A month made for curling up under the blankets and staying in bed. Sound familiar?

If you’re feeling sluggish and a bit low in spirits, you may be suffering from the mid-winter blues. Luckily, we’re here with six tips for raising your spirits and your energy until spring comes along:

1. Exercise—Indoors or outdoors, exercise can work wonders in fighting mild feelings of depression. Whether you bundle up for a walk, do yoga at home or have a snowball fight with your kids, even 15 minutes of activity a day can help.
   
   
2. Eat right—We tend to reach for starchy, sugary comfort foods when we’re down, but replacing those empty carbs with whole grains and adding the nutrients found in colorful fruits and vegetables will promote better moods, not to mention health.
   
   
3. Grab some sunlight—When the sun appears, take advantage of it! Open your blinds and let the sun shine in. If you can, get outside and take a quick walk, go for a drive, run an errand—anything to get some of that bracing Vitamin D.
   
   
4. Start a new hobby or interest—Keeping your mind active lifts your mood. Take an online class, write that novel, start online singing lessons, learn to meditate, knit or paint…the options are endless.
   
   
5. Be social—Stay in touch with family and friends, even if it’s virtual—and especially if you live alone or work at home. We humans are social animals, and even introverts need love and connection. Or at least occasional communication with other human beings.
   
   
6. Get cozy on the couch—If you’re stuck indoors, here are some useful reasons to park yourself on the sofa: Enjoying the divine medicine of laughter with a funny movie or TV show; losing yourself in a good book; or listening to upbeat music can stoke your spirits.

This winter, why not take a cue from Scandinavians? Over the centuries they’ve spent coping with long, dreary winters, they’ve learned to embrace the practice of what the Danish call hygge (say “hoo-ga”)—a mood of coziness and comfort. It’s a time for them to enjoy being at home and spending quality time with family and friends. We hope the tips above will help you create your own feeling of hygge until the sun (and warmth) returns again.

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Put LinkedIn to work for your business

If you think of LinkedIn as just a job-search site, you’re not alone. After all, it was the job listing component of the platform that turned into a highly lucrative source of revenue for the social media giant. However, it’s so much more than that.

Today, social media has become an indispensable part of business, and not just for job searching. Thanks to the development of cloud technology and the growing migration to remote work, social media is one of the most important ways to get your brand—business or personal—and your message out into the world.

LinkedIn is still a hot spot for job seekers, but even if you’re not looking for a career change, it’s a platform you should take advantage of to enhance your professional presence. Here are five reasons why:

1. LinkedIn is a professional platform. You won’t distract from your message—or be distracted—with photos of frolicking puppies or impassioned live-tweets of the hottest new binge-watch. LinkedIn is all business, all the time.
   
   
2. LinkedIn can help position you as an authority. Share your expertise and insights with regular posts and articles. Showcase samples of your work. Announce professional achievements. You’re an expert; be proud of that status and let everyone know it!
   
   
3. LinkedIn reported 690 million users worldwide in 2020. While you probably won’t connect with all of them, the potential for connections you can tap is virtually limitless. Plus, LinkedIn’s users love to share useful content, extending the reach of your information.
   
   
4. LinkedIn keeps you up to date on industry news and trends. Follow and connect with people, groups and companies in your industry and profession, and you’ll have a daily news feed perfectly tailored to your topics of interest.
   
   
5. LinkedIn helps build social proof. The ability to recommend or endorse connections is built into the platform. We are a ratings-obsessed society, and those recommendations can play a major role when someone wants to do business with you.

If knowledge is power, connections are the circuits that spark that power. LinkedIn members are not only enthusiastic content-sharers—they love to connect and grow their networks with fellow professionals from all over the world. Whether you’re looking to boost your business or your personal brand, LinkedIn can help extend your reach.

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4 habits to keep your brain healthy

You exercise your body to stay healthy, but how often do you exercise your brain? Research has shown that keeping your brain cells strong and sharp can help lower your risk of developing dementia. Here are four ways to make sure your body’s busiest organ keeps running smoothly.

1. Keep doing. Brain activity stimulates new nerve cell connections and may even help your brain build new cells. Activities that can help jump-start that process include:
   
   •Reading and writing.
   •Taking courses through local programs (adult education, community programs,  community colleges) or online.
   •Solving crossword, jigsaw, Sudoku or any other types of puzzles you enjoy. 
   •Taking up hobbies and crafts that require creativity or manual dexterity.
   •Attending lectures or plays.
   •Trying new things: learn to play an instrument, travel to a new city.
   
   
2. Move often. When you use your muscles, you help your mind by increasing the number of blood vessels that carry oxygen-rich blood to your brain. You’ll also help develop new nerve cells and build connections between your brain cells. Plus, the usual benefits: lower blood pressure, cholesterol, sugar and stress. And you don’t need to run a marathon; walking, gardening, dancing, playing tennis or swimming all fit the bill. Aim for 30-60 minutes several times a week.
   
   
3. Eat healthy. Feed your body, feed your mind—but feed them well. It’s been proven that people who eat a Mediterranean-style diet are less likely to develop dementia. That means less red meat and salt and more polyunsaturated oils, colorful fruits and vegetables, whole grains, nuts and seeds, plant proteins, and fish. Foods that are especially brain-friendly include:
   
   •Wild salmon
   •Blueberries
   •Beans
   •Avocados
   •Dark chocolate
   
4. Stay social. People with strong social networks have a lower risk of dementia, since social connections are believed to strengthen the connections between your brain cells. Social interaction also helps fight off stress and depression, which can contribute to memory loss. Stay alert for opportunities to connect with loved ones, friends and acquaintances, and consider volunteering or being part of a book club or hobby group if you’re missing the company of others.

As we get older, we all have the occasional memory lapse. But practicing these four basic habits—along with getting enough sleep, limiting alcohol and not smoking—can help keep your blood flowing and ensure your body and brain stay active and vibrant for many years to come.

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Tools to make remote work less remote

Now that you’ve been working remotely for several months, how are you feeling about your shared office apps? If you’re still scrambling to put together a set of tools that meet your virtual needs, here are some applications that will go a long way toward making everyone feel like they’re working together as a team…even when you’re not in the same office.

Video meetings

• Zoom—The most popular way to meet virtually, Zoom offers several levels of service. One of those is a free option that lets you meet with up to 100 participants for 40 minutes.
• Google Meet—With a Google account, you can create a video meeting, invite up to 100 participants and meet for 60 minutes free. Paid plans offer more options.
• GoToMeeting—No free plan, but since it’s made for business, you’ll find hi-def video and other features for smaller teams that you’d normally see in enterprise-level plans.

Instant chat/messaging

• Slack—In addition to direct messaging, Slack makes it easy to share files; access archives; and create channels, groups and reminders. There is a free option, but it’s limited.
• Microsoft Teams—Close connectivity with Office 365 and lots of features makes Teams the perfect messaging app for your company if you already use Microsoft tools.
• Google Chat—If you already use Google’s paid G Suite, Google Chat can help your team connect with each other by direct message or group conversations.

Calendar management

• Outlook—One of the most common calendar apps, Outlook’s familiarity is a major strength. If you know how to use Office 365, you know how to use Outlook. 
• Calendly—This scalable software works with your calendar to automatically check your availability, cutting down on the amount of back-and-forth when scheduling meetings.
• Google Calendar—If you use Gmail or any other Google app, Google Calendar can sync your calendar across all of your devices as long as you’re logged in with your Google account.

A final option to consider that doesn’t really fit into any of the categories above is Google Drive, which contains Google Docs, Google Sheets and other apps. It’s more of a file storage system, but it’s free and a great way to create, circulate, and review documents and spreadsheets.

With any of these applications, you’ll take significant strides toward creating an efficient remote office that feels much less remote.

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3 tips to lower your tax stress in 2021

It’s probably fair to say that most of us can’t wait to see 2020 out the door. But there’s one more task to carry out before you can wave goodbye to The Year We’d Rather Forget: Be ready to file your taxes.

With changes to the tax code for 2021—many because of the COVID-19 pandemic—now is the time to get your tax season ducks in a row while you have the luxury of time to do it. Here are some tips to be sure you’re ready:

1. Collect your documents—Do you have all the documents you need to file your taxes? Avoid the last-minute scramble by gathering them now. Besides the usual suspects 
(W-2s and 1099s), remember that special circumstances may require special documentation, especially if COVID affected you. A job layoff, falling ill with COVID, a closed business, the inability to work due to virus-related childcare issues—make sure you’ve documented these circumstances.
   
   
2. Tally up life changes—If you got married or divorced, purchased health insurance on the Marketplace, bought or sold a home or business, retired, or experienced any other major life change, be sure all records are up to date. Also, be sure that you’ve apprised involved parties of the change(s) and that you have proper documentation. Something as small as forgetting to change your name with the Social Security Administration could cause major delays in processing your return.
   
   
3. Check in with your preparer—Not only is it a good idea to reserve an appointment with your preparer before the first-quarter rush, it might be an equally good idea to schedule a quick check-in before year end, if possible. Your tax professional will have the latest on tax code changes. You can also get questions answered such as: How did the CARES Act stimulus check affect income? How do you handle the PPP loan that kept your business afloat? What’s the standard deduction for this year? What about those increased unemployment benefits? Whatever the question, your preparer can alert you of circumstances that affect your tax situation.

Sure, it might feel early to be thinking about taxes when we’re still in the holiday season, but just think of how nice it will be not to have to scramble or get hit with unwelcome surprises on Tax Day.

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Resolution 2021: Look outward

Congratulations, we’ve made it through 2020! We’ve proven to ourselves that we’re disciplined and strong! And we appreciate even more what our family and friends mean to us! Does that mean we don’t need to make resolutions this year? Maybe. But it’s always good to have a goal. So, if there’s nothing to resolve for yourself, why not direct your resolutions outward for 2021?

It feels good to do something nice for someone; even science tells us so. A study published in the journal Nature Communications asked participants to spend money on either themselves or others over a four-week period. The group that spent money on others reported feeling happier than the control group that spent money on themselves, no matter how much or how little they spent. And that generous feeling continued to influence the decisions they made for subsequent tasks in the study.

We’re not suggesting you go out and spend money on random people, of course (unless you want to). In fact, you don’t need to spend any money; you can do nice things for your family, friends and community that take little money, not much time and allow you to maintain social distance when needed. Here are some ideas:

• Send someone who needs a pick me up a quick handwritten card or note.

  
  
• Ask someone: “What can I do for you?”
  
  
• Ask elderly or homebound family members or neighbors if you can pick up groceries or run other errands for them.

  
  
• Smile and thank those who aren’t acknowledged enough—cashiers, baggers, the servers who bring out your curbside carryout, delivery drivers…a small gesture can go a long way.
  
  
• Use your computer expertise to set someone up with free video chat software and teach them to use it. For those who are alone, it can be a sanity saver.

  
  
• Drop off an occasional meal for a family member, friend or neighbor.

  
  
• Help beautify your community (e.g., take part in park or roadside clean-ups).

  
  
• Donate food, personal protective equipment (PPE), computers and any other items to those in need.

While it’s important to be kind to yourself, make the extra effort in 2021 to look outward and take care of those around you as well. Here’s to a better and brighter new year!

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The case for content

If your business has a website, you’ve heard about the importance of content. Lots of content— educational, timely, entertaining and frequently updated information that helps boost your search rankings and engage visitors.

Still, you might be asking: Our customers come to us because of the products and/or services we offer, so is it really that important to push out a steady stream of content?

The short answer is yes. And here are four compelling reasons why:

• Good content develops trust—The goal is to not only attract prospective clients with engaging content, but to keep them coming back and build relationships. But like any relationship, it’s easier to commit if prospects see that you clearly understand their challenges and can help solve them. Authoritative, user-friendly content that addresses their concerns and shows them how to solve a problem—without a sales pitch—will establish you as an empathetic expert they can rely on and trust.
  
  
• High-quality content takes on a life of its own—Website visitors are more likely to read and share content if they find it valuable. A clear and concise blog or social media post on the latest trends in your industry or common pain points (and how to resolve them), for example, serve as useful information that visitors will be more compelled to share.

  
  
• Engaging content makes you stand out from the competition—When consumers are comparing businesses online, what makes one stand out from the others? Yep, you guessed it: helpful, thoughtful content. Take the blog or social media post example from above. If the information presented proves to be timely and helpful to readers, they are more likely to come back to your site (while forgetting all about your competitors).

  
  
• Valuable content builds your email list—A website visitor is just that: someone who pops in, looks around and pops back out. But if visitors have the option to download, for example, a free eBook that focuses on how to solve a common issue or simplifies an otherwise complex topic, they are more likely to provide their email in exchange for your content. And that means you can add another prospect to your list.

Content is a must in today’s web-driven world—enabling businesses to stand out from the competition and provide both clients and prospects with helpful, educational information. If you have not yet, it’s time to jump on the content bandwagon.

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Massachusetts Minimum Wage Increase

An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday was signed into law on June 28, 2018 by Massachusetts Governor Charlie Baker. This bill raises the minimum wage to $15 per hour; service rate to $6.75/per hour; mandates paid family and medical leave for Massachusetts employees; phases out Sunday and holiday premium pay for retail employees and creates a permanent sales tax holiday weekend.

Employee Minimum Wage

 ●    Minimum Wage will incrementally  increase to $15/hr  on the following schedule 

        Jan. 1, 2019 - $12

        Jan. 1, 2020 - $12.75

        Jan. 1, 2021 - $13.50

        Jan. 1, 2022 - $14.25

        Jan. 1, 2023 - $15.00

 Tipped Employee Minimum Wage

 ●    Minimum Wage will incrementally increase to $6.75/hr  on the following schedule

        Jan. 1, 2019 - $4.35

        Jan. 1, 2020 - $4.95

        Jan. 1, 2021 - $5.55

        Jan. 1, 2022 - $6.15

        Jan. 1, 2023 - $6.75

●    Minimum Wage calculated per shift not per pay period starting in 2019

     
 
Repeal of OT pay for Sundays and Holidays

●    Phases out of retailer’s requirement to pay overtime for Sundays and Holidays

        January 1, 2019 OT/holiday rate is 1.4 times regular rate

        January 1, 2020 OT/holiday rate is 1.3 times regular rate

        January 1, 2021 OT/holiday rate is 1.2 times regular rate

        January 1, 2022 OT/holiday rate is 1.1 times regular rate

        January 1, 2023 OT/holiday rate is 1.0 times regular rate

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PPP Loan Forgiveness Update

PPP Loan Forgiveness Update

There is no immediate deadline to apply for loan forgiveness. Forgiveness applications can be filed up to 16 months from the date a business received PPP loan funding.

 We suggest deferring PPP forgiveness until 2021. IRS notice 2020-32 states that the expenses paid with forgiven PPP funds will not be deductible on the taxpayer’s 2020 income tax return. Congress has indicated that this was not their intent and has pending legislation to correct the IRS’ position. However, due to the recent elections no action has been taken yet. We know that if PPP forgiveness happens in 2020 the related expenses will be non-deductible per regulations. At this time, if forgiveness is granted in 2021, taxpayers can deduct the expenses for 2020 and hope that either the IRS reverses its decision or Congress takes legislative action to correct this position by the IRS. If neither happens, then once forgiveness is granted taxpayers would be required to amend the 2020 tax returns accordingly.

 PPP loan repayments start 10 months from the end of the “covered period” unless an application for forgiveness has been submitted. The end of the covered period (24 weeks from the funding date) for most recipients is October/November 2020. This means the PPP loan repayments are scheduled to start August/September of 2021. Lenders have up to 60 days to approve your forgiveness application. Approved applications are sent to the SBA for review and funding which can take another 90 days.

 Banks in our area have already started to accept forgiveness applications or will be very soon.

With all of this in mind, we believe this is the right time to start the process for our clients. We hope to have all applications ready for submission by January 1, 2021.

Please contact us if you have any questions or would like our help with your PPP loan forgiveness.

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Retrain your brain for a more thankful Thanksgiving

This Thanksgiving, what are you grateful for?

If you have to reach a little deeper this year to find your answer, don’t feel alone. It’s easy to be thankful in good times, but this year—like no other in recent memory—so many have been touched by illness, job loss, natural disaster or the chaos of daily life, which makes it a little more difficult to muster a sense of gratitude.

When life gets this challenging, is it even possible to feel grateful? Yes, according to Robert Emmons, author of “Gratitude Works! A 21-Day Program for Creating Emotional Prosperity” and a leading scientific expert on gratitude.

“Not only will a grateful attitude help—it is essential,” says Emmons. “In fact, it is precisely under crisis conditions when we have the most to gain by a grateful perspective on life.”

This is your brain on gratitude

The science of gratitude (yes, there is such a thing) has proven that practicing gratitude on a regular basis can change your brain, resulting in increased happiness, improved health and relationships, better sleep, less stress, decreased anxiety and depression, lower pain levels, and increased productivity.

How? First, two definitions: Serotonin is the hormone that regulates our mood and feelings of well-being and happiness. Dopamine is the chemical that’s released during pleasurable situations, stimulating us to seek out more of those situations. The simple act of finding things to be grateful for increases the production of serotonin, while the practice of gratitude stimulates dopamine—which encourages your brain to repeat that great feeling. So, in essence, the regular practice of gratitude can help rewire your brain.

How to practice gratitude

You don’t need complex rituals to increase your thankfulness. Even if you don’t send them, the mere act of writing thank-you notes or letters to those who are important in your life can help you turn your focus away from negative feelings and thoughts. Or, if you’re a journaler, keeping a gratitude journal and adding entries a few times a week can help remind you of what you’re thankful for.

The results of studies with groups that focused on writing letters of gratitude showed better mental health four weeks after the study. And even better mental health 12 weeks after the writing activities—compared to groups that didn’t write letters.

Even though it won’t happen overnight, you can retrain your brain to focus on the positive, not the negative. It’s a practice that even those of us who are more fortunate can take a lesson from—at Thanksgiving and all year round.

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How to get the most out of a virtual conference

If you plan to attend a conference soon, it will likely be a virtual event. While some may dismiss virtual conferences as just sitting in front of a computer, the fact is they can be more comfortable (sweatpants, anyone?), more rewarding and every bit as enjoyable as an in-person event. If you’re a virtual conference newbie, here are some tips to get the most from your experience:

• Make sure your tech is ready for a virtual venue. Your hosts will send out information, instructions and links to download the applications you need. Don’t wait until the last minute—make sure video, audio and other tech is up and running before opening day.

  
  
• Plan ahead to minimize distractions. Block out the time on your work calendar. Ask your spouse or older children to handle kid and home duties during conference hours. Silence your phone. Turn off email, messaging and anything else that isn’t part of the conference experience. You can do your check-ins during the scheduled breaks.

  
  
• Be present. Don’t assume a virtual conference is second-best. Because you’re not distracted by other conference-goers or balancing your notes on your lap in uncomfortable hotel chairs, you can devote more attention to the presentations and be comfortable enough to take it all in.

  
  
• Work out a schedule of sessions. Typically, virtual conferences make recorded sessions available free to attendees for a period of time after the event. If you can’t attend a session live, view it later. 

  
  
• Attend as a group. Many conferences offer discounts for multiple attendees from the same company. Split up just as you would at an in-person event and attend different sessions and events.

  
  
• Participate and network. This is the time to expand your virtual community. Use live chat to engage with other attendees. Ask questions. Answer online polls. Attend social events. Attend breakout or round table sessions. These are all good ways to reach out to other attendees for more in-depth conversations.

  
  
• Take breaks. Don’t sit all day. Stand up, take stretch breaks, get coffee and follow the 20-20-20 rule for your eyesight—every 20 minutes, look at something 20 feet away for 20 seconds.

  
  
• Attend the virtual expo. Even without a physical exhibit hall, you can interact with vendors in their virtual booths and ask questions or watch product demos and videos just as you would in person.

Virtual conferences are still new, and a lot of people are just getting used to meeting online. There may be minor hiccups here and there, but don’t stress—we’re all feeling our way through this and learning as we go. You’re there to learn, connect with others in your field and most of all, have fun!

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10 fun activities for a socially distanced fall season

Even with summer in the rearview mirror, there are lots of opportunities to get out of the house and enjoy activities with family and friends (or others in your “bubble”). Here are 10 suggestions for fall fun that everyone in your crew—regardless of age—can enjoy.

1. Host your own festival—Has the local fall festival been canceled? Then host your own in the backyard. Pumpkin bowling, relay races, candy treasure hunts, an apple cider and cookie booth, face painting, a fall craft contest with prizes…almost anything your town can dream up, you can do yourself—especially if the kids help with setup.
   
   
2. Take a short road trip to see the changing colors—Pack a cooler with snacks, lunch and drinks, and stop along the way for a fall picnic or hike. And don’t forget the wipes in case of pit stops.

   
   
3. Go apple picking—Check with your local apple orchard or cider mill to see if they’re offering safe apple picking or other activities.
   

4. Have a tailgate party in your driveway—Even if your team’s not playing, put on your jersey, make some party snacks and play a game of catch in the backyard.
   
   
5. Visit a museum or two—Museums are open and keeping visitors safe with social distancing. Don’t hesitate to contact your local museum for information to see if it’s an option for you.
   
   
6. Fire it up—Do you have a fire pit or grill? Head outdoors to grill hot dogs and make s’mores. Tell campfire stories to add to the fun.
   

7. Make rainy day plans—Gather in the house for a family game and puzzle marathon. Graze on snacks while you play anything from silly board and card games to jigsaw and word puzzles.

   
   
8. Decorate your home—Gather fall leaves, acorns, pinecones and other fall-ish things to decorate your porch or other spaces. Buy pumpkins, gourds and autumn-colored flowers to serve as the focal points of your displays.

   
   
9. Go on a scavenger hunt—Google “Scavenger hunt ideas,” and you’ll find lots of ideas to help create a hunt in your neighborhood, local metropark or nature center. They’re fun whether you break into competing teams or search together.

   
   
10. Visit a corn maze—There are few activities that so loudly shout, “It’s fall!” as winding your way through corridors of corn stalks. If you’ve never been before—and if you’re satisfied with the venue’s safety measures—you’ll likely enjoy the experience.

The days may be growing shorter, but even in this year of social distancing, there’s fun to be had by all.

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Online reviews: What you need to know

Do online reviews help or hurt a business? Depending on the type of review, of course, it could go either way.

First, consider what a good review can do for your business. Courtesy of Qualtrics.com, here are a few stats:

• 97 percent of people read reviews of local businesses.
  
  
• 93 percent of consumers say that online reviews influence buying decisions.
  
  
• A Yelp rating increase of one star can equal a 5 to 9 percent increase in revenue.
  
  
• Customers are willing to spend 31 percent more on a business that has excellent reviews.

Clearly, positive reviews can help your business—with word of mouth and even a revenue boost. Here's another important statistic: 91 percent of 18- to 34-year-olds trust online reviews as much as personal recommendations. As this demographic moves up to become your ideal client (and they will), it will be more important than ever to have those stellar reviews out there for the, well…reviewing.

Now, let’s consider what a bad review can do to a business. Here are the current stats:

• 94 percent of consumers say an online review has convinced them to avoid a business.
  
  
• 4 out of 5 consumers change their minds about a purchase after reading negative online reviews.
  
  
• A business risks losing up to 22 percent of its customers when one negative article turns up in a search. Three negative articles raises the risk of lost customers to 59.2 percent.

A single bad review in a sea of good ones shouldn't tarnish your reputation. After all, you can't please everyone. But that also doesn’t mean you can just walk away from it. Bad reviews must be dealt with, and swiftly! Online review experts recommend replying to bad reviewers with a brief message to let them know they’ve been heard. Usually an authentic apology and/or an invitation to contact you for a resolution will cool the heat quickly.

If the bad review turns out to be unjustified crankiness, you may lose that customer (not necessarily a bad thing). But if the complaint is justified and you make it right, you may save the relationship and earn a diehard fan in the process.

Overall, it’s important to be seen online, and reviews are one of the best ways to make a name for your business. Stockpiling positive reviews can help a business exponentially. And while a bad review can hurt, if you handle it quickly and professionally, it can also turn out to be good for business.

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Payroll Tax Deferral

President Trump’s Payroll Tax Deferral Executive Order 

The IRS issued Notice 2020-65 to clarify the Executive Order to allow employers the option to temporarily defers the collection and payment of certain payroll taxes. The order allows employers to postpone the collection and remittance from now through year-end

This deferral of social security withholdings(6.2%) is allowed only if the wages of the employee are less than $4,000 per bi-weekly period and extended to other pay periods as well ($104,000 annually; $4,333 semi-monthly; $6,667 monthly; or $2,000 weekly). This is determined each and every pay period.

 Employers must collect and remit the deferred taxes ratably from January 1, 2021 until April 30, 2021.

 Our Recommendation:  Given the seasonality of most of our employers, we believe this action would place an unnecessary financial hardship on the employers during the first quarter of 2021. If an employer defers collection and an employee quits, is laid off or has a reduction in hours before April 30, 2021, the employer may be required to pay the employee taxes, since there would be insufficient wages from which to collect. There's no guarantee that the employer’s cash flow will be better as a result of this deferral because amounts are relatively small and the deferral period is relatively short.

Ultimately the burden for collection and remittance falls on the employer. For that reason, we recommend that you ignore the Executive Order and continue to collect taxes and remit to the IRS on your normal schedule.

Please contact us if you would like to discuss this further.

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7 tips for surviving ‘back to school’ this year

It's hard not to be apprehensive about fall this year with many schools reverting to online learning at home for students. But if it helps, you're not alone. Recent statistics show that 51 percent of working parents said they'll be distracted to a "moderate" or "great" degree on days when their kids learn from home, and 42 percent are worried to the same extent about their job security due to the situation.

For those parents facing a kids-at-home-this-fall school season, here are a few tips to make sure virtual school plus remote work don't equal your loss of sanity.

1. Communicate with your company. Be upfront with your needs and allow your employer the same courtesy. They want this new way of working to succeed, too. Flexible scheduling, shifting start times, job sharing, weekend work hours in exchange for time off during the week—these are just some of the ways companies across the country are collaborating with remote staff to get work done.
   
   
2. Communicate with your spouse/partner. Without judgment or challenge, lay out your needs, requests and expectations, and decide how you'll split kid duty. To allow both of you uninterrupted work time, consider alternating—either in blocks of time or by day—as the "contact" parent who can work out among the kids, while the other retreats to a designated quiet space. Just be sure to split the contact duties equitably!
   
   
3. Communicate with your kids. Let your children know the rules and expectations for the school year. Remind them that you're working while they're learning, and assure them that you'll all adjust together as needed. Where practical, give your kids some input into the process so they feel invested, too. 
   
4. Do a tech check before you're in full virtual mode. Does your internet have the bandwidth to handle everyone being online at once? If not, contact your provider to see how you can optimize your connection.
   
   
5. Create a schedule and keep it in full view. Get a school/class schedule from your school district or teachers and build the family schedule around it. Don't toss your usual school-year routines out the window because you're home. Set alarms for an early start, take showers, get dressed, have meals and go to bed just as you would in a normal year. Don't forget to include breaks, exercise, homework and family time.
   
   
6. Designate dedicated spaces to serve as "school" and "office." Even if it's the opposite ends of your dining room table, set up visual cues that kids will recognize as boundaries to respect. Mark "walls" around your chair with painter's tape. Print out a red stop sign to hang on your laptop so they take questions to your partner instead. Have a box, basket or small rolling cart handy in each area to hold supplies, so you can move them easily if needed (i.e., to clear off the kitchen table for lunch).
   
   
7. Have activities available to occupy your kids in their down time. Especially if you'd like to limit screen use, dollar stores are a great source for age-appropriate activities—toys, craft supplies, stickers, coloring books and reading books. Ask your kids for input on what they'd like to do and if possible, give them a number of items to choose from.

Most of all, cut yourself—and everyone else—some slack. Yes, there will be bumps in the road, especially at first. Just be open to making adjustments, and don't insist on an unrealistic level of perfection, from your family or yourself. Because if there's anything that this pandemic era has taught us, it's that we are all just doing our best.

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Take some time to optimize your Google My Business profile

As summer comes to an end, many people go into business-clean-up mode—gearing up for year end. One item to add to your list is enhancing your Google My Business profile. The internet is where most consumers find a business, so make sure your information is engaging, accurate and current to elevate your visibility online.

Your Google My Business profile appears in Google Maps search results as well as local results for standard searches. Your profile also includes the “knowledge panel” that displays on the right-hand side of a results page. Here are a few tips to make sure your Google My Business profile is optimized:

• Update general information—For example, if you have summer hours in place, make sure to update as you move out of the summer season. Ensure your phone number and address are correct and that photos posted are relevant to your business. Also update your business description if it’s been awhile since you created your profile.
  
  
• Up your activity with Google posts—This is a cool feature, allowing you to post relevant, current news and information about your business without having to pay for costly advertisement space. Take some time to add a few end-of-summer posts to help promote your business beyond your general My Business listing.
  
  
• Make use of Q&A—With Google Q&A, anyone can ask and anyone can answer any question about any business in the world, such as: Are you open on Sundays? Is there free parking? Do you take walk-ins? The questions and answers appear publicly on your Google My Business profile and may show up at the top of your listing depending on which search query you’re showing up for. For example, if a consumer is searching a salon that takes walk-in clients and a local salon has a walk-in question in their Q&A section, that salon will be more likely to show up in the search results. So, make sure your Q&A section is current.

A solid online presence is critical to business success. Ensuring your Google My Business profile is optimized will help increase your visibility and get you in front of more relevant searchers.

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Back-to-school budget-friendly tips…

It’s back-to-school season, and that typically means buying a lot of stuff to prepare kids for the start of a new academic year. While 2020 may look a bit differently (some schools may enact online learning and/or hybrid models), kids will still need a few essentials—from backpacks to electronics. Here are a few tips to keep your back-to-school shopping within your budget.

• Take advantage of early-bird sales— Stay on top of back-to-school sales. Instead of stocking up for the first few months only, try to buy items for the entire school year. Plan for the long-term to make the most of early-bird deals.
  
  
• Make a plan before shopping— Be prepared before you hit onsite or online stores. It’s dangerous to shop without a well-thought-out list, because it often leads to impulse purchases. Ask your child’s school or teacher for a list of required items to help you build your list and take the guess work out of what your child needs.
  
  
• Look for “used” items—You can get great deals when you shop for “used” items online. For example, Amazon offers the option to buy used, which typically means an item has been returned and simply re-boxed. Many times, you can get a brand new, re-packaged item at a big discount.
  
• Search your home first—Remember to look at home for items before spending money on new goods. Many supplies, like notebooks, pens, backpacks or basic electronics, will often be sitting, forgotten and unused, in closets and desk drawers.

Back-to-school time can be hectic and expensive. Planning ahead will help you save more and stress less!

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Upping data security for virtual workspaces…

For many businesses, COVID-19 forced them into a remote office model. Months into the pandemic and having had a successful experience, a lot of business owners have decided to maintain virtual workspaces. For those adopting this new normal, upping security must be a priority to keep data safe.

Here are a few security essentials to keep in mind:

• Secure devices—Ensure that staff who access business applications and data only do so using an authorized device, including computers, tablets and phones. For all business-related devices, implement a screen-locking policy to lock devices that are idle after a set length of time—for example, more than five minutes. Also adopt multi- or two-factor authentication, which requires users to verify their identity by entering a security code that is sent to their phone or email account.
  
  
• Secure internet connections—To better secure virtual workplace connections, start by implementing an updated password policy. For example, mandate use of longer passwords/passphrases or a password manager (e.g., Keeper, LastPass). Passphrases consist of at least three nonsensical words (e.g., dinnercatpen), are unique for each login, and cannot be reused for other applications. Also, develop and implement home internet connection guidelines to further bolster security. For example, connecting a computer directly to internet routers with an ethernet cable and using a VPN represents the more secure home connection scenario (Wi-FI represents a weak security scenario).
  
  
• Close the human-error gap—One of the best ways to keep your business data secure is to maintain a trained and educated staff. Set aside time to train your entire team on best practices for remote workplace security. And, perhaps, put a mandatory annual training course in place to keep your team updated on current cybersecurity scams.

Virtual workspaces will likely continue to grow in popularity. Just make sure that you are putting data security at the forefront if you make the transition to virtual a permanent one.

Stay safe and secure!

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The extended individual tax deadline is approaching fast…

It’s hard to believe that we are already into July. Even with the deadline for filing your return and making a payment (if you owe) being extended to July 15, 2020, it still seemed like it came upon us fast. With only a few weeks left, be sure to get any final documents to us and answer any outstanding communications immediately.

Here are a few basic tax season reminders:

• If you are getting a refund, the fastest way to receive your money is to file electronically and choose direct deposit.
  
  
• For self-employed individuals and others who pay quarterly estimates, the first and second quarter federal estimates tax payment are due on July 15.
  
  
• If possible, submit all documents to our team electronically.

As we continue to adjust to the new normal, we want to remind everyone to continue to be safe this summer. And here’s to a very happy July 4th!

Please reach out to us if you have any questions or concerns regarding your tax return.

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Get your indoor herb gardening on!

New gardeners have come out of the woodwork this year, looking to create a sustainable food supply in their own backyards. Of course, not everyone has the space or the time to create a full-on outdoor garden. So, why not start small…and indoors?

Growing herbs indoors allows you to enjoy homegrown produce that adds a zip of fresh flavor to meals with a quick clip of a few fresh sprigs. For gardening newbies, it also serves as a low-stakes entry into more substantial edible gardening—and all you need is a sunny window. Start your own indoor herb garden this year by following a few helpful tips:

Pick the plants that are right for you.
Think through what herbs you use most while also considering those that are easy to grow. For example, choose a few no-fuss plants that tend to thrive indoors such as basil, chives, mint, oregano, parsley, rosemary and thyme.

Start from seeds or cuttings.
You can start your herb garden with seeds or by cutting sprigs from an existing plant. If you have a family member or neighbor who is an avid gardener, you may want to ask for a few cuttings. Otherwise, simply purchase seeds from a local garden store or online.

Collect the right containers.
You’ll need to use containers that allow for proper drainage, so be sure to purchase pots designated for herbs. Your pots also need something to protect your indoor surface, such as a saucer or round plastic protector. You can use any size container, provided the plant fits. Just realize that the smaller the vessel, the sooner you'll have to repot.

Show them the light.
The majority of herbs need a lot of sunlight—at least six hours a day. To maximize exposure, place plants as close as possible to your brightest window. The bright light of a south-facing window is best.

Water with care.
Don’t get overzealous with watering. It actually takes very little water to sustain a small herb garden. To make sure your plants prosper, keep the soil consistently moist, but not waterlogged. If leaves begin to wilt or turn yellow, scale back the watering.

Harvest little by little.
Harvest a few sprigs at a time with kitchen shears or by pinching leaves off with your fingers. You’ll want to avoid cutting more than a quarter of the plant at a time because this can cause distress and even kill them.

Whether you have a green thumb or not, following the above tips will help you be victorious in growing your own indoor herb garden. Here’s to getting your gardening on!

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5 tactics to spending less this year

It’s safe to say that most people are laser focused on money right now—specifically on how to make it last longer. To help you do just that, we compiled the following list of tips for spending less in 2020:

1. Rank expenses by priority.
   This will help you create a monthly budget. First, differentiate between discretionary and fixed costs. For example, fixed costs may include rent, car payment and utilities…while discretionary expenses may include entertainment, cable TV and new clothing. Second, rank all of your fixed costs in order of importance, starting with those you can’t live without. For most, this will include rent, car, utilities and food. Then, rank your discretionary items; this will help you identify some expenses that you can cut out for a while.
   
   
2. Question every expense.
   Go over your list on a regular basis—even daily—to identify items you can cut completely or those you can negotiate a discounted rate on. This includes reviewing all of your subscription services (e.g., gym, radio/music, etc.)—and remember, if you don’t use it, lose it.
   
   
3. Continue to cut out discretionary expenses.
   Once you’ve streamlined your budget, continue to eighty-six as much non-essential spending as possible, even if only on a temporary basis. For example, cut out the fancy coffee every morning or suspend getting takeout food for a while.
   
   
4. Get a grip on impulse purchases.
   Impulse and pleasure purchases can be the biggest budget buster. Try to refrain from getting online and browsing, because this often leads to impulse purchases. The more you can rein in your impulse spending, the longer your money will last each month.
   
   
5. Switch out your credit cards for a debit card.
   It’s always easier to pull out a credit card for purchases…thinking, “I’ll just pay for this later.” But “later” always comes quickly. Try tucking all your credit cards away in a drawer and using only a debit card. When you know the money will immediately be withdrawn from your account, it makes you think twice about what items you really need.

For many, keeping careful watch over household cash flow is a necessity right now. Try following a few or all of the tips above to make your hard-earned money last longer.

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5 tips to getting your healthy on this summer!

With more of us likely staying close to home this summer, why not plan to either start a healthy and regular workout schedule or enhance your current routine? It’s never too late in the year to get your healthy on, so we’ve compiled a short list of tips to get you moving.

1. Start with a plan—The more organized you are, the more likely you will stay on track. Start by creating a short workout plan, which could include specific days of the week you will work out  (Monday, Wednesday and Friday, for example). It can also include the type of workout per day—Monday: weight training, Wednesday: biking, and Friday: 5k walk. Block out time on your calendar for working out as well.
   
   
2. Start out slow—Don’t burn yourself out by jumping into an intense workout regimen. This can often lead to quitting altogether. Commit to working out two days a week at first, and then work your way up to five or even six per week! Also make sure to select workouts that support your level of wellness. As you exercise more and more, you will gain the strength and endurance required to elevate the level of workout difficulty.
   
   
3. Get good sleep—When you give your body a chance to recover with at least 6 to 8 hours of good sleep, you’ll find that working out is much more enjoyable and less strenuous.
   
   
4. Adjust your nutrition plan—Stock your kitchen with healthy fruits and veggies, and start to move away from processed packaged foods. The more whole, plant-based foods in your diet, the better, lighter and more energetic you will feel! And whenever possible, choose water over sodas or juices (avoid the sugar).
   
   
5. Find a workout buddy—Many find it difficult to get motivated when working out alone. If this sounds like you, find a dedicated workout partner. When someone else is depending on you to show up, your accountability tends to skyrocket. And if you can’t physically work out together, agree to check in regularly and hold each other accountable.

Any time is a good time to improve your health and well-being. Applying just a few of these tips can help you significantly increase wellness for the long haul.

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Is this the year for a staycation? How to kick back, relax and vacation at home

Summer is typically the time people start planning vacations—Disney World…cruises…the beach. This year, however, travel may not be in the cards. But that doesn’t mean you have to sacrifice down time and fun with the family. Make this the year you plan a fantastic staycation! Here are some tips to make sure you can kick back, relax and have a memorable time with a vacation at home.

• Unplug completely from work—You’ll never feel like you are on vacation if you are sneaking away to answer emails and Slack messages. Put your staycation on the calendar so your colleagues know that you are incommunicado for the duration of your vacation. Set an out-of-office message for email and other communication platforms…and don’t answer work calls.
  
  
• Take a break from news (and maybe even put mail delivery on hold)—Again, the point is to create the feeling of being on vacation, so lose the news and hold the mail. Both can be a source of stress, so eliminate them for the duration of your “getaway.”
  
  
• Plan destination dinners—If you can’t make it to the beach this year, for example, at least eat like you are living coastal. Before your staycation begins, stock up on meats, perishables and pantry items required to create meals from some of your favorite destinations.
  
  
• Relax outside by candlelight or a bonfire—Getting outside is often a big part of most vacations. Just because you are at home doesn't mean you have to stay inside. In the evenings, plan time around a bonfire or firepit (make s’mores and other favorite by-the-fire treats), play some relaxing music, and just talk and catch up. If a bonfire or firepit is not possible, create a cozy area with candles to sit and chill.
  
  
• Plan day and evening events with the family—If you have kids, plan outdoor games like scavenger hunts or glow-in-the-dark hide-and-seek (which only requires a few glow sticks…and humans, of course). If you have a pool, plan to spend time soaking up the sun and playing pool games. For indoor fun, go “old-school” and play board games or teach the kids a few fun card games.
  
  
• Make a vacation playlist—Whether inside or out, playing music always adds a fun element, and can help create the illusion of being at a desired destination. For example, if you love the Caribbean, make a playlist of tropical, island-style tunes. Make one or more playlists that everyone will enjoy listening to.

Stay-at-home vacations can be very relaxing and fun…not to mention easy on the wallet. If you plan to stay home this year, apply a few of our tips so you can truly kick back and enjoy a vacation in the comfort of your home.

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Work-from-home best practices

The fact is that many of us are now working from home…and we’re not sure just how long this will be a necessity. With this in mind, we compiled a list of best practices to support a successful and secure work-from-home operation.

• Ensure a good internet connection (and have back up)—Ensure that you have the best internet provider supporting your home operation. In cases of internet downtime, have a portable backup ready, like Verizon’s Jetpack or Sprint’s MiFi. If you use your phone as a hotspot, make sure you have enough data to cover you for at least a full workday.
  
  
• Map out dedicated office space—There can be numerous distractions when you work from home. Don’t settle for setting up your “office” at the kitchen counter. Try to create a private, dedicated workspace away from the noise. If possible, a room with a door (that you can close when needed) is best.
  
  
• Establish a “get-started” routine—Creating a familiar routine to launch your workday is a great way to make the transition to a home office. For example, get a cup of coffee (or tea) first thing, write out your daily to-do list (on paper or electronically), and then move on to reviewing internal communications. Whatever your routine, structure and familiarity can be very comforting and help keep you on track.
  
  
• Get used to video—You will feel far less isolated when working from home if you have the ability to connect with clients and colleagues via video meetings. Using video chat applications like Zoom is a great way to stay connected and keep projects and deliverables moving forward efficiently.
  
  
• Communicate securely—While we are on the topic of video conferencing, you’ll want to carefully review the security features offered in your solution of choice. For example, Zoom allows you to lock meetings so that no one can join who isn’t supposed to be there. You can also host larger meetings or webinars that require a password/PIN.
  
  
• Select technologies that offer top-notch security—Be sure that you are using the most advanced cloud-based solutions to keep your data secure. Choose technologies that support two-factor or multi-factor authentication.

The necessity to work from home is the current reality for many. So, be sure that you are set up to work efficiently and effectively. And as always, we are here to help. Until we return to the office, stay safe and healthy!

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How to minimize distractions while working from home

Working from home has increased in popularity over the past several years. But today, amidst the COVID-19 crisis, it’s not only popular, but required for many. Moving from a hustle-and-bustle professional workspace to a home office can be a major transition for many. To help you make the move successfully, here are a few tips to reduce distractions while working from home:

• Pipe in background music—Listening to relaxing, lyric-free music, like Mozart or classical piano, is not only calming for the soul, but offers white noise to kill the distraction of silence and help with focus.
  
  
• Keep a to-do list—Whether on a notepad or electronically, just mapping out your day via a to-do list will help keep you motivated and on track.
  
  
• Use other visual tools to stay organized—Put up a small dry erase board and make notes or sketch out processes as you brainstorm ideas in solitude.
  
  
• Get up and get out—Don’t sit at a desk all day. Taking short breaks throughout the day will keep you energized and reduce burnout. Take a short walk outside or even tackle a few small in-home tasks that may be distracting you.
  
  
• Create a true office setting—Don’t just set up shop at the dining room table. Create an actual workspace, complete with a desk, comfy chair, photos, candy jar—whatever you need to feel like you have a dedicated office or workspace.
  
  
• Stay off of social media—This can be a major distraction no matter where you are working, so try to keep social sites out of your browser tabs. And maybe even move social apps off of your phone’s home screen for a while.
  
  
• Close your door—If you have a dedicated office, reduce focus-killing noises from other rooms by simply closing your door. The more you feel like you are at the office, the better.

These are just a few proven tips to reduce home-office distractions. We hope you find them helpful!

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Why file your tax return early? Lots of good reasons...

If April 15 always seems to sneak up on you, get out in front of this year’s tax deadline and file early. Here are a few top reasons why you should…

1. Reduce your stress. When you wait until the last minute, it can spike stress levels. The dread of the impending tax deadline, the worry of compliance—it all adds up to tax season anxiety. Make this the year you file early and cut back on the stress of the season.
   
   
2. Reduce the risk of identity theft. Once your return is filed with the IRS, personal information (such as SSNs) is locked and cannot be used again by anyone. Filing your taxes early really can help reduce or eliminate the risk of identity theft.
   
   
3. Expedite your refund. If you believe you are due a refund this year, the sooner you file the sooner you’ll receive your refund. And who doesn’t want that?!
   
   
4. Additional time to identify other potential tax savings. When you supply our team with all your documentation early, it offers extra time to prepare your return and identify any additional savings. Filing earlier also affords you more time to gather your documentation and search for any additional paperwork needed.
   
   
5. More time to pay your tax bill. If you owe the IRS money, filing early gives you more time to save in order to pay your tax bill by the individual tax return deadline.

Questions? Reach out to us soon. We want to ensure you receive all the value of filing your return early!

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What you need to know about changes to retirement and 529 plans

The new budget bill passed by Congress on December 20, 2019 impacted both retirement and college savings plans. While many are still waiting for further guidance from the IRS on several details of the bill, we compiled a short list of the major changes that may affect you.

Retirement plan changes:

• The rule that restricted deposits to an IRA after the age of 70 and ½ has been repealed. Under the new bill, starting in 2020, any person of any age can make a deposit to an IRA with earned income (e.g., wages or self-employment).
  
  
• The mandatory age to begin distributions has changed from 70 and ½ to 72.
  
  
• Recipients of stipends and fellowships can now use these funds to make IRA contributions.
  
  
• Up to $5,000 can be withdrawn without penalty for the birth or legal adoption of a child up to one year after birth or adoption. Withdrawals are taxable; however, if redeposited within 60 days, funds will not be taxed.
  
  
• If an IRA is inherited from someone who passed in 2020 (other than a spouse and a few other exceptions), funds must now be distributed within 10 years.
  
  
• Long-term part-time workers will be able to join their company’s 401k plan. Except in the case of collectively bargained plans, the law now requires employers maintaining a 401k plan to offer one to any employee who worked more than 1,000 hours in one year or 500 hours over 3 consecutive years.
  
  
• Small business owners can receive a tax credit for starting a retirement plan—up to $5,000.

College saving (529) plan changes:

• Withdrawals of up to $10,000 during one’s lifetime can be used to repay student loans of an account beneficiary (or their siblings) without tax or penalty, making it a qualified expense.
  
  
• Withdrawals can be made to pay for an apprenticeship program once approved.
  
  
• The tuition and fees deduction has been retroactively restored from 2018-2020.
  
  
• Children with higher interest, dividends or capital gain income are retroactively taxed at their parent’s tax rates rather than the potentially higher trust tax rates.

If you have any questions, please reach out to our firm. We are here to help!

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Smart tax tips for 2020

It’s that time of year when everyone can agree on one thing: Paying taxes is a drag. As we progress into a new tax season, follow these tips to help avoid a heavy tax burden this year:

• Adjust your withholdings as needed—The 2018 tax code overhaul lowered most individual tax brackets, which in turn put more money in many workers’ pockets. If you noticed a bump in your paycheck after the tax code changes went into effect, be sure that your withholdings have been adjusted appropriately to avoid any unwanted surprises come April.
  
  
• Maintain organized records—Be sure to keep all your business-related expense documents organized and current. Deducting qualified expenses is a benefit of being self-employed. Maintaining solid records helps ensure you don’t miss out on eligible deductions as well as helps you avoid claiming the wrong deductions.
  
  
• Keep up with your estimated payments—If you have side work that augments your income, make sure you are paying in throughout the year. You are responsible for making sure the IRS gets its fair share of your side hustle income.
  
  
• Take advantage of pre-tax saving options—If you don’t contribute to a traditional IRA, 401(k) or HSA (health savings account), you are missing out. These tax-advantaged savings plans allow you to contribute pre-tax dollars, which can save you quite a bit during the year and lower your tax burden.
  
  
• Work with a professional—Unraveling the tax code can be overwhelming. If you are not already, be sure to work with a tax professional who will ensure you receive the proper deductions, work to mitigate your tax obligation and ensure compliance.

If you have any questions, please reach out to our firm. We are here to help!

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5 tips for hosting magical meetings

Okay, so maybe not magical…but there are things you can do to rev up engagement in your meetings. After all, it’s likely that you spend at least 25 percent of your professional time in meetings, so why not put a little work into making them more appealing for all those involved. To get you started, give the following five tips a try:

1. Know your audience—Pay attention to every attendee as they walk through the door. Measure moods so you can adjust your approach. For example, if someone was stuck in traffic and appears irritated, give them a little space to decompress and then offer them coffee before starting. Little gestures can go a long way.
   
   
2. Remove distractions—It can be hard enough to keep people’s attention, especially in longer meetings. Host your meetings (as often as you can) in a room set apart from high-traffic areas or where customers are visible. Also, ask everyone to silence their phones. Finally, provide a short agenda so people know what’s in store and have an idea of when they can get back to work. This can sometimes quell the urge to get back to it and allow employees to focus on the topic being discussed.
   
   
3. Be prepared—There’s nothing more frustrating than sitting in a meeting where the host is completely unprepared—which can drag things out longer than need be. Come into your meeting armed with a structured agenda and stick to it.
   
   
4. Open with a question—This sets the tone that everyone’s voice is important. By posing a question to the group, you jumpstart participation and support a more collaborative culture. Don’t be the only one to talk…that can get old very quickly.
   
   
5. Put some focus on the big picture—Getting everyone passionate about individual projects and the business overall can be difficult. While you may be pitching a new product in a particular meeting, take some time to share a few reasons why employees should care about the project. Discuss revenue goals, product relevance or how customer pain points will be solved. A little big picture talk can quickly get everyone engaged and excited.

You don’t have to love them…but you can’t leave them either. Meetings are a part of the workday, so do what you can to improve the experience for everyone.

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Set your career goals for 2020

There’s no better time to talk about goals than the start of a new year. And what better topic than your career? The following are a few tips to help you set reasonable and achievable goals this year:

• Get out of your comfort zone—The theme here is pushing yourself to make bigger things happen. Apply for aspirational jobs (even if you might not meet all the criteria); tackle projects that you haven’t before and that may feel outside of your experience realm; or if you’ve never done so, sign up to present a topic of significance to your team.
  
  
• Work on a single skill—Making yourself an important asset is the idea here. Focus on improving a key skill this year that will help you grow as a professional and a person. To do this, you can take a course, read a book on a given subject or ask to be mentored by a respected colleague.
  
  
• Take mental breaks and just think—Taking time to clear your mind is key to staying focused. Set the goal to take at least two or three 15-minute breaks during the workday to simply be still. This will help reboot your brain and make way for new, innovative ideas.
  
  
• Seek out the right leader—Leadership is key in career growth. Do you have a boss that has your back when you make mistakes and challenges you with new tasks to help expand your experience and knowledge? If not, it might be time to assess a departmental move or even a company switch.
  
  
• Give back—Volunteering for a worthy cause offers you the opportunity to mentor others, which is great experience for future leaders. Being of service expands one’s ability to connect and be part of a meaningful community—all great attributes!

It’s a new year. Take some time to set some career goals, and then go get’em!

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Financial resolutions for 2020…Get on a healthy track as the New Year kicks off

The New Year is the best time to take stock of your finances. So, as you begin the season of self-reflection and goal-making, take the time to review your spending and start making plans for a financially healthy 2020! Here are a few tips to get you started:

• Start with your goals—Record what you want to achieve. Is it paying off credit card debt? Buying a home? Saving more for retirement or your child’s college fund? To achieve goals, you must first get specific and then plan your attack.
  
  
• Make a budget—Creating a budget allows you to identify where you might be overspending. Take some time to review year-end credit card reports, for example, to help pinpoint spending leaks.
  
  
• Check in on your credit rating—If you’ve ignored your credit score for some time, it’s probably time to check in. Request a free credit report and review it for potential issues. It’s better to find them now and work to correct mistakes before they turn into something big down the road.
  
  
• Identify cut-backs—Don’t go crazy and deprive yourself, which is the fastest way to fall off the wagon. Instead, identify easier, more digestible cut-backs. For example, plan one stay-cation this year where you and your family spend quality time at home. Or, instead of joining an expensive gym, create an exercise plan that you can execute on your own or with friends. You can also cut out small purchases, like that daily latte from an expensive café chain.
  
  
• Cut the cable cord—While this could be listed under “Identify cut-backs,” we thought it deserved a little spotlighting. Cable services can be very expensive. And with all the cost-effective streaming services available today, do you really need it? Consider dumping your cable and replacing it with Netflix, Amazon Prime, Hulu or even a digital antenna.
  
  
• Bulk up your HSA—Adding a little extra to your Health Savings Account is a tax-savvy way to save for future medical expenses. Check with us for current HSA contribution limits.
  
  
• Educate yourself—There are a lot of outstanding finance-based podcasts out there. Do some research to identify a few and then subscribe. Education is the key to smart financial action.

Start 2020 out right and get on track for a financially healthy year. Let us know if we can help you with your planning.

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A healthy twist on holiday dessert favorites

The holidays are all about spreading cheer…not calories and cavities. So, why not try a few dessert recipes that put a healthier spin on some holiday treat favorites. We offer a few tested (and delicious) recipe ideas for you here:

• Sugar cookies—Now, here’s a lead favorite among holiday treats! Who doesn’t love a butter-rich, sugar-topped cookie? If sugar cookies are a traditional holiday treat in your house, try going gluten-free this year by using almond or coconut flour. FitFoodieFinds.com has a great recipe! Try it; you just might like it.
  
  
• Gingerbread cookies—You can’t get more classic than your friendly faced gingerbread cookie. If you’re a gingerbread junkie, try the Ultimate Healthy Gingerbread Cookie recipe at AmysHealthyBaking.com. This guilt-free recipe eliminates butter and refined flour and sugar…and comes in at just 52 calories per cookie!
  
  
• Shortbread cookies—The dense, buttery deliciousness of shortbread is often a fan favorite around the holidays. CookingLight.com offers a healthier whole-wheat version that doesn’t skimp on the beloved buttery flavor. Give this Salted Chocolate-Topped Shortbread recipe a try.
  
  
• No-bake peanut butter cup bars—Peanut butter and chocolate is a classic and delicious combo. This healthy recipe from Detoxinista.com offers a Paleo- and vegan-friendly recipe.
  
  
• Cheesecake—Who doesn’t love cheesecake? It’s dense, decadent and delicious! Offer a lighter version this year by trying Foodnetwork.com’s Chocolate Truffle Cheesecake recipe that replaces most of the cream cheese with cottage cheese.

These are just a few healthy dessert ideas that you can try this holiday season. Visit any of the websites noted above to discover others. Here’s hoping your holidays are happy and healthy!

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Hosting an employee holiday party that is festive, frugal and free of stress

Hosting a holiday party for your staff is one of the best ways to show them you care—while also creating some meaningful, team-driven memories. Follow our tips below for hosting a memorable soiree that doesn’t push your stress or your budget past your limit.

• Make a list—Organization is a natural stress deterrent, so live by a list this holiday party season. Keeping a list will help you plan, stay on budget and identify where you can delegate work.
  
  
• Include your staff—Simply ask employees if they would like to be part of the planning process. This can promote a stronger feeling of being part of the team…while also providing some stress-reducing support. Those who love to plan parties will likely step forward.
  
  
• Stock up ahead of time—Start stocking up on needed items months ahead of time to take advantage of sales. Also consider purchasing several staple items in bulk, like plates, napkins, cups, nuts, chips and other non-perishables. By the time the party rolls around, you’ll be surprised at how many things you can have checked off your list and how much you’ve saved by not waiting until the last minute.
  
  
• Deck the halls—Don’t forget the festive part of throwing a holiday party. Decorations and music are key. Stocking up on decorations ahead of time can save you money. You can also use items you have at home. Consider simple but elegant table center pieces made from colorful ornaments stacked in a glass bowl. It’s also likely that you have a few crafty and creative employees who can help with innovative (and budget-friendly) decorations.
  
  And don’t forget the music! Simply pipe in a holiday station over a free service like Spotify or Pandora. If someone has an ad-free music subscription, ask them if they would be willing to log in and play music from their account. Selecting instrumental holiday playlists will add to the festive feeling without distracting lyrics that can detract from conversations.
  
• Create a feeling of comfort—If a formally catered meal is not in your budget, opt for a more casual buffet stocked with holiday comfort foods. Purchasing food for a buffet is often cheaper than catering a formal meal. You can also float out the idea of a potluck, so everyone can contribute and show off their favorite dishes.

The holidays should be fun and relaxing. Follow our tips to host a memorable holiday party for your staff, while staying on budget and keeping it fun and festive.

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Massachusetts HIRD Reporting Requirements

The Health Insurance Responsibility Disclosure(HIRD) is a state reporting requirement in Massachusetts, which launched in 2018. The HIRD form collects employer-level information about your employer-sponsored insurance (ESI) offerings. The HIRD reporting is administered by MassHealth and the Department of Revenue (DOR) through the MassTaxConnect web portal. The HIRD form will assist MassHealth in identifying its members with access to qualifying ESI who may be eligible for the MassHealth Premium Assistance Program.

Who is required to complete the HIRD form?

State law requires every employer in Massachusetts with six or more employees to annually submit a
HIRD form. If you are an employer who currently has (or had) six or more employees in Massachusetts in any month during the past 12 months preceding the due date of this form (December 15th of the reporting year), you are required to complete the HIRD form. An individual is considered to be your employee if you as the employer included such individual in your quarterly wage report to the Department of Unemployment Assistance (DUA) during the past 12 months. You are required to complete the HIRD form if you reported six or more employees (includes all employment categories) in any DUA
wage report during the past 12 months. If you are an employer that is not required to file a quarterly wage report to the DUA, an individual is considered to be your employee if they are hired for a wage or salary in Massachusetts to perform work, regardless of full-time or part-time status.

How do I submit the HIRD form?

The HIRD reporting is administered by the DOR through the MassTaxConnect (MTC) web portal.
The MTC is where employer-taxpayers register to file returns, forms, and make tax payments. To file
your HIRD form, login to your MTC withholding account and select the “File health insurance
responsibility disclosure” hyperlink under the "I Want To" section. If you do not have an MTC account, or if you forgot your password or username, you may follow the instructions provided on the MTC web page (https://mtc.dor.state.ma.us/mtc/_/#1) or contact the DOR at 617-466-3940.

When do I submit the HIRD form?

The HIRD reporting is required annually. The HIRD reporting period will be available starting November 15 of the filing year, and must be completed by December 15 of the filing year. 

For more information on the HIRD requirements or other services, please contact our firm. We are happy to discuss how we can help you . We look forward to hearing from you.

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Thinking about retiring? Here’s an easy 5-step calculation to see where you stand.

If you have retirement on your mind, the big question is this: Are you in a financial position to do so? While nothing replaces the advice of a seasoned advisor, you can take your first step to answering this question by applying a simple 5-step calculation.

In just five minutes, you can get to a simple Yes or No on whether you will have enough income and savings to cover your retirement expenses. Answer each question below in sequence:

1. What are your total annual contributions to retirement savings?
   
   
2. Multiply that number by the number of years left until retirement (the "when you want to retire" part).
   
   
3. Add your current retirement savings to that number.
   
   
4. Divide by the number of years you expect to live in retirement.
   
   
5. Add that to other guaranteed sources of income.

When you’ve completed your calculation, compare the answer to your current annual expenses to see if the amount you projected is enough to cover your normal living expenses.

While offering a highly simplified model, this exercise will get you thinking about what you need to do in order to retire.

Be aware that this model does not take into account such things as growth rate of investments or inflation. So, if you have questions about retirement, please feel free to reach out to our firm for guidance.

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Enjoy the deals without the Black Friday rush this year

If you’re not a fan of Black Friday chaos—you know…the crowds, the rush, the relentless search for a parking space—then ditch the onsite shopping this year while still enjoying the sweet deals.

Here are a few ideas to get in on the savings…without stepping foot in the mall:

Take advantage of Cyber Monday
Why even get in the car when you can find just about anything online? Cyber Monday is a great way to get in on some excellent online deals. Once the ads start rolling out, cross-reference your gift list with Cyber Monday advertisements. Make note of what company is offering the best deals on the gifts you need to purchase. Then, on Cyber Monday, be one of the first to visit vendor websites and purchase items at a discount.   
Beware of over-browsing, however. Don’t fall into the trap of buying items that are not on your gift list…just because there’s a good deal.

Shop local and negotiate
If you don’t want to do all your shopping online, shop local! Search out unique boutiques and consignment stores to find custom gifts at Black Friday prices. Sometimes, you can negotiate prices for even more savings.

Remember, gift giving should be fun. Use these tips to avoid the stress of Black Friday shopping if it’s just not your cup of tea.

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What you need to know about the new overtime rule

The Department of Labor (DOL) announced a final rule that allows a much larger pool of employees to earn overtime if they work more than 40 hours per week. Specifically, the DOL raised the salary level for employees who are counted as “exempt” (or unable to earn overtime pay).

According to the DOL (dol.gov) the final rule:

• Increases the minimum salary requirement from $455 to $684 per week ($35,568 per year) for the administrative, professional (including the salaried computer professional) and executive exemptions.
  
  
• Permits employers to use nondiscretionary bonuses, incentive payments and commissions (that are paid at least annually) to satisfy up to 10 percent of the minimum salary requirement for administrative, professional and executive exemptions.
  
  
• Increases the total annual compensation requirement for the “highly compensated employee” exemption from $100,000 to $107,432 per year (at least $684 must be paid on a weekly salary basis).

The new overtime rule is effective January 1, 2020. Please contact our firm if you have any questions. We are here to help!

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Launching another business? Be sure to cover a few business basics…

If you’re starting a second business, then you know everything that’s involved with a business launch. However, there are a few business basics that every entrepreneur should revisit before diving into another enterprise. Consider these business basics and then put them into a well-thought-out business plan:

• Determine the proper legal structure—Will you set up an LLC (limited liability corporation) or form a partnership? It’s important to determine the best option for your new venture, especially when it comes to reducing liability and keeping your personal assets protected.
  
  
• Develop a marketing strategy—How will you attract new customers? Who is your audience? What is your messaging? What communication delivery tools will you use to get your message out, and does your plan include social media? Expect to spend significant time figuring out how to market your new product or service, and be sure to work up a budget for your marketing program.
  
  
• Work through the financing—Will you need a business loan? Will you enlist the help of investors? Will you create a crowdfunding campaign? Think through all of your financing options before you move forward with your launch.

There are other aspects of a business plan that should be considered as well, such as your organizational structure, revenue drivers and staffing needs. So, if you have any questions, please reach out to our firm. We are here to advise you.

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3 cybersecurity tips to protect your small business

The 2019 small and midsized business (SMB) Cyberthreat Study from Keeper Security reported that nearly two out of three SMB owners do not feel threatened by or are not concerned about cyber attacks. Yet, in the previous year’s study, two out of three business owners reported falling victim to some level of data breach.

This should give business owners pause. And it is certainly grounds for offering a few sound cybersecurity tips to help keep your business safe from cybercriminals. Apply the following tips in your business to help fortify your defenses against cyber scams:

1. Develop a password policy (and stick to it)—Primarily, this policy will require regularly changing passwords. For those who have been using the same passwords for years, it’s highly likely that those credentials are out on the dark web somewhere…waiting to be purchased. Require all staff (and this includes owners) to change their passwords, for example, every 90 days. This helps prevent hackers from purchasing old login information that can be used to break into your organization’s network. There are password manager solutions out there that automate this task for you.
   
   
2. Implement two-factor authentication—This offers another gatekeeper for keeping your data safe. Two-factor authentication requires an additional form of identity validation beyond a password. This second layer can be a code or PIN number, commonly sent via SMS.
   
   
3. Get serious about education and training—No matter what security measures you implement, human error will always be the weakest link in your organization’s cybersecurity chain. Phishing scams continue to escalate, and it only takes one employee clicking the wrong link to put your entire database in jeopardy. Be sure to implement regular training on safe cyber behavior, including “testing” employees with “fake” emails, and then following up with education when tests are failed.

Hackers know all too well that some SMBs aren’t implementing even basic cybersecurity procedures. The tips in this article will help protect your business from falling victim to rising scams. Stay safe out there!

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Massachusetts Paid Family & Medical Leave Starts October 1, 2019

Overview of the Paid Family and Medical Leave

Starting in 2021, Massachusetts will offer paid family and medical leave benefits to eligible workers. The Massachusetts Paid Family and Medical Leave (PFML) program will be funded by contributions paid by workers and certain employers through payroll deductions, beginning on October 1, 2019. Depending on the makeup of the your workforce, you may be responsible for remitting contributions for both Massachusetts W-2 employees (full-time, part-time, seasonal) and Massachusetts’ 1099-MISC contractors.

Counting Covered Individuals

The average size and configuration of your workforce (Massachusetts W-2 employees and Massachusetts 1099-MISC contractors) for the previous calendar year will determine whether 1099- MISC contractors are covered for the current year. If you need clarification and guidance about counting covered individuals, go to the MA PFML website

 If you have fewer than 25 W-2 employees/1099-MISC contractors, you are exempt from paying the employer share of the premiums. However, you’re still required to submit employee contributions to the Department of Family and Medical Leave and to report all the required information.

 Effective October 1, 2019, Atlantic Payroll will support the payroll deductions, employer contribution, payments, and reporting of the MA PFML.

MA PFML Rates

The rate combined will be 0.75 percent of gross wages per employee up to the OASDI (social security) wage base ($132,900 in 2019) starting in fourth quarter 2019. Annually, not later than October 1, the agency will set the contribution rate for the upcoming calendar year. 

The rate is split into two parts, Family Leave and Medical Leave. The Family Leave portion is paid 100 percent by the employee. The Medical Leave is split between the employee and the employer with 40 percent paid by employee, 60 percent paid by the employer (where applicable). The employer can elect to cover some or all the employee portion of both the family and medical contributions.

If You Already Offer Family and Medical Leave Benefits

If you are already offering family and medical leave benefits to your employees, you will be able to apply for annual exemptions from making contributions for both medical leave and family leave if you offer a private plan option that is at least as generous as what is required under the PFML law. If your business receives this exemption your employees will not be covered by the state PFML plan.

Exemption applications are available on MassTaxConnect.

Workplace Poster

All Massachusetts employers must display the Paid Family and Medical Leave mandatory workplace poster prepared or approved by the Department of Family and Medical Leave (DFML) that explains the benefits available to their workforce under the PFML law. They must post this poster at their workplace in a location where it can be easily read.

The poster must be available in English and each language that is the primary language of five or more individuals in their workforce if such translations are made available from the Department of Family and Medical Leave (DFML).

Written Notice Requirements

On or before September 30, 2019, Employers and Covered Business Entities are required to provide written notice to their current workforce of PFML benefits, contribution rates, and other provisions as outlined in M.G.L. c. 175M sec. 4.

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De-stress your workday!

We can all get caught up in the day…meetings, calls, texts, emails and the myriad of other workday demands that pile up quickly and can create unwanted stress.

Take the time to review our tips for de-stressing your day. Here’s to making a happier you!

• Get a head start—Leave home at least 30 minutes earlier than normal. Studies show that the less rushed you feel in the morning, the less stressed you’ll be for the rest of the day.
  
  
• Eat—Fueling your brain with nutritious foods is a good way to reduce hunger and ward of the “hangries!” Healthy nonperishable snacks are always a good bet for satisfying late-afternoon hunger pangs without making you feel too full. Keep protein bars, dried fruit, and nuts or pretzels in your desk for those times you just need to quell the crave.
  
  
• Give yourself props—Take the time to give yourself proper praise now and again. For those times when you complete a big goal or pass a milestone, give a quick cheer for YOU.
  
  
• Take 10—Taking just 10 minutes during your busy workday to close your door and enjoy the silence can make all the difference in your mood. Also consider 10 minutes of meditation (there are lots of meditation apps available) or a walk outside in the sun (hello, vitamin D!).
  
  
• Manage communications—Incoming communications can be overwhelming on their own—considering all the emails, texts, IMs and meeting requests a person gets in a day. Cut back time spent responding to digital messages. For example, don’t waste a message simply acknowledging receipt of an email or pick up the phone if confusing topics can be handled swiftly with a quick chat.
  
  
• Enjoy your own personal 7th-inning stretch—This is especially important if you have a sedentary job. Get up and walk around your office or take a few minutes to lift your legs up and stretch them for 30 seconds at a time. Stretch your arms while you are at it by extending them above your head and pulling each wrist to its opposite side. Stretch for as long as it takes to reset your body and your brain.
  
  
• Socialize—That’s right…take time to be social! All work and no play makes anyone a dull (and stressful) individual. Just take a few minutes to socialize and talk about anything but work—such as upcoming vacations, kids’ events or outside adventures.

Just a few minutes a day can help you de-stress and enjoy life before, during and after work!

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About to get grillin' for Labor Day? Mind a few of our safety tips first.

Labor Day is upon us—a popular holiday that is dedicated to the millions of women and men who keep this country going strong. For many, it also means that it’s time to break out the grill for that big end-of-summer celebration. And because most of us aren’t Grill Masters, this is a good time for a refresh on some basic grilling safety tips to keep everyone safe and the party going.

Inspect wire brushes—Wire grill brushes need to be checked regularly for loose wires and cleanliness. Many hospital visits have been due to individual wires breaking off and being embedded in food, which can cause serious injury to the digestive system. Also, be sure to clean brushes regularly to kill bacteria.

Tend to the grill at all times—Never leave a hot grill unattended. This increases the risk of a fire—if stray embers escape, it could ignite nearby materials. Also consider that children can be seriously injured if they touch or overturn an unattended grill.

Mind the 10-ft rule—Whether you use a gas or charcoal grill, allow for a minimum of 10 feet clearance from your home or any other structure. It’s also smart to remove any overhanging branches or debris that could ignite from a stray ember.

Check meat temperatures—Always check the temperature of your grilled meat to ensure it's fully cooked. Consuming undercooked meat is a serious hazard that places everyone at risk for a food-borne illness like Salmonella.

Keep a fire extinguisher nearby—If a fire breaks out, you should have a fire extinguisher readily accessible. Don't assume that water alone is enough to put out a blaze.

Here’s to a festive and safe Labor Day for all! Now, go get your grillin’ on.

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Back to school on a budget: 4 solid tips to save you money

Let’s face it. Kids aren’t cheap, so you have to save money where you can. Back-to-school shopping is a good place to start because costs can add up quickly—especially if you have more than one child. Consider these tips for sending your kids back to school without breaking the bank.

1. Plan before you shop—Be prepared before you hit the stores. There’s nothing more dangerous than shopping without a structured list, because it often leads to impulse buys. Ask your child’s school or teacher for a shopping list of required items. This will take the guess work out of shopping and keep you to a defined list.
   
   
2. Stock up early—Take advantage of back-to-school sales. Instead of stocking up for only a few months, try to buy items for the entire school year. Plan for the long-term to make the most of early deals.
   
   
3. Buy used when you can—Kids might like new shiny things, but it makes sense to buy used for certain items. For example, items that your child may only need for the current school year—like an expensive calculator for calculus class. Instead of buying new, look for a cheaper, gently used option online. This is also a great tip for college-bound students—buy used text books!
   
   
4. Shop in your own home first—Remember to search your home first before you spend money on new items. Many supplies, like notebooks and pens, will often be sitting, forgotten and unused, in closets and desk drawers. Make use of what you already have. You can also reuse and repurpose items from the previous school year, like backpacks and binders.

Back-to-school time can be both frantic and expensive. Planning ahead will help you save more and stress less!

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$700 million is what Equifax will pay out as a result of its data breach. Make sure you get your share.

The 2017 Equifax data breach was the largest in history…with 147 million Americans affected. If you were one of them, you may be entitled to compensation.

The Federal Trade Commission ruled Monday, July 29, that Equifax will have to pay up to $700 million in individual compensation and civil penalties because of the hack.

According to the commission's online claims process, those whose personal information was exposed can opt for 10 years of free credit monitoring, which breaks down as follows: Four years via the three major credit bureaus (Equifax, Experian and TransUnion) and six years specifically through Equifax.

However, if you already have credit monitoring, you can choose to receive $125. For those who had to spend time and money as a result of the breach, Equifax can provide larger sums—up to $20,000. Losses can include unauthorized charges on your accounts, attorney or accountant fees, the cost of freezing or unfreezing your credit report, or the cost of credit monitoring.

You can file a claim through Equifax's data breach settlement page. Equifax has a website where you can quickly check if your personal information was exposed.

The deadline to file a claim is January 22, 2020 (this is the last day to file online and the postmark deadline for mailed claims).

Source: CNN.com

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Deducting kid’s summer camp and daycare costs under the Child and Dependent Care Credit

With all the tax law changes this year, be sure that you are getting your just deductions in the coming tax season. That is, qualifying deductions that fall under the Child and Dependent Care Credit. According to tax giant and trusted resource Intuit, here’s the skinny…

If you paid a daycare center, babysitter, summer camp or other provider to care for a qualifying child under age 13 or a disabled dependent of any age, you may qualify for a tax credit of up to 35 percent of qualifying expenses—up to $3,000 for one child or dependent or up to $6,000 for two or more children or dependents.

Qualifying criteria…

The Child and Dependent Care Credit is designed to assist working parents and guardians with some of the expenses involved in raising a child or caring for a disabled dependent. To qualify, you must meet several criteria, including the following:

• You (and your spouse, if you are married filing jointly) must have earned income for the tax year.
  
  
• You must be the custodial parent or main caretaker of the child or dependent.
  
  
• The child or dependent care service must have been used so that you could work or look for employment.
  
  
• Your filing status must be single, head of household, qualifying widow or widower with a qualifying child, or married filing jointly.
  
  
• Your child or dependent must be under the age of 13 or must be disabled and physically or mentally incapable of caring for themselves.
  
  
• The childcare provider cannot be your spouse or dependent or the child's parent.

Qualifying expenses for the Child and Dependent Care Credit

Most know that daycare fees qualify for the Child and Dependent Care Credit. However, qualifying expenses often overlooked include childcare provided by a babysitter or licensed dependent care center…as well as the cost of a cook, housekeeper, maid or cleaning person who provides care for the child or dependent.

Other qualifying expenses include day camp or summer camp fees. Even camps centered around a sport or activity qualify if the camp was selected to provide care while the parent or parents were at work. Please note that overnight camps do NOT qualify.

Additional qualifying expenses include costs related to before- and after-school care for children under the age of 13 and expenses related to a nurse, home care provider or other care provider for a disabled dependent. Keep in mind that expenses related to schooling or tutoring are not qualifying expenses.

Because every family is different, be sure to check with your advisor on IRS exceptions. Here’s hoping your summer is fun and festive so far!

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Traveling safe: Tips to keep you secure while on the road

These days, we seem to have endless articles on IT security while traveling, but far fewer on physical safety. Because summer can be big travel months for many businesses, we put together the following list of tips to help keep you safe while away from home.

• Prepare before leaving home—Leave expensive jewelry and accessories at home. Instead, replace these items with professional-looking substitutes that won’t draw unwanted attention.
  
  
• Share your itinerary with friends and family—This ensures others have a general idea of where you’ll be, as well as your arrival and departure times.
  
  
• Update your phone with your In Case of Emergency (ICE) contact—Identify one or more people to be your ICE contact and then update these contacts with “ICE” after their names in your phone.
  
  
• Take photos of your travel documents—Store backup photos on your cloud drive just in case you lose your documents and your phone while traveling. You can also send copies to a friend or a family member for safekeeping.
  
  
• Familiarize yourself with your rental car—Know how to use the lights, wipers, locks and alarm system before taking off.
  
  
• Bring a portable door lock—This offers added safety at a hotel. Even if you feel safe without this added security, always use the deadbolt and bar lock.
  
  
• Explore your host city during the day—Don’t wait until nightfall to check out local sites. Also, stick to well-populated areas and carry valuables close to your body. If going out after dark, go with a group.

These are just a few tips to help keep you safe and secure while traveling this summer. We hope you found them helpful. Safe travels to everyone!

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Get up, get out and have some cost-effective fun this summer!

As your trusted advisor, we are always looking for ways to improve your financial health—and that doesn’t stop at business activity. We also want to support you with tips to help you save money in your personal life as well.

Summer is here! And with it comes vacations, outings, and lots of other activities with family and friends—activities that can be costly and add up quickly. To help you save some money this summer, we put together a list of cost-effective summer fun ideas. Read on…and enjoy the season!

• Head to the library—Before you roll past this suggestion, keep an open mind. A lot of libraries offer summer programs and activities you can enjoy with kids. Many libraries host activities that include outdoor fun with music, arts and crafts and ice cream socials, as well as indoor fun that can include author readings, magic shows and book clubs.
  
  
• Visit playgrounds—It’s hard to find a child that says they hate the playground. Going to a local park gets the family outside to run, climb and enjoy picnic-style treats. Take some time to research other playgrounds in your area that you’ve never visited. You might be surprised at how much fun you can have.
  
  
• Host a sleepover—For parents looking for ways to entertain youngsters, a sleepover is an easy and cost-effective option. Short of supplying snacks and drinks, this is a fairly cheap activity. But why should kids have all the fun? Host an adult sleepover for friends and family, complete with games, a viewing of fun family movies, a bonfire (with s’mores) and good conversation.
  
  
• Research nature parks—Parks and greenbelts are great options for exploring…and usually for free. You can take the family or a pack of friends and hike all day. Some parks also offer low-cost tours where a guide will educate you on geological history and local flora and fauna. Who says you can’t have fun and learn, too?!
  
  
• Start a neighborhood wine and dessert crawl—This can be as easy as sending out a text to your favorite neighbors and asking if they want to participate in a fun house-to-house wine- and dessert-tasting activity. The rules are easy. The crawl starts at your house with your selected wine and dessert, and one-by-one you walk to each home on the crawl to sample a selection of wines and tasty delights.

Have fun this summer…without breaking the bank!

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June is National Safety Month! Tips for augmenting your marketing efforts.

June is national safety month, and it never hurts to remind your clients and community that safety always comes first. Our goal with this blog is to help you augment your marketing initiatives with a few ideas around safety. While we can’t cover every industry in a single post, we hope that you find the tips below useful and that they spark some innovative new marketing ideas!

“Safety first!” is the mantra of the month. So, run with it as you brainstorm for new summer marketing ideas. Encourage people to stay safe in general and also address industry-specific situations where applicable. Here are a few ideas to chew on:

General safety—Promote common safety information to your clientele by providing a list of top 5 summer safety tips. Consider a few common summer safety topics such as: keeping kids safe around water, prevention of heat stroke, safety around graduation celebrations, the importance of staying hydrated and more.

Industry-specific safety—Here are few examples:

• Bike manufacturers and shop owners, promote helmet safety by offering articles on such topics as helmet buying tips for kids or top 10 things to watch out for when biking on the open road.
• Healthcare professionals, promote skin cancer prevention by offering free sunscreen samples in your office or encouraging preventative exams.
• Dental professionals, promote healthy oral care by advocating for more water this summer and less soda. You can tie in the theme of staying hydrated during hot summer months as well.
• Travel industry experts, promote top safety tips when traveling this summer. This topic can also serve as a general safety campaign.

These are just a few marketing ideas to use during National Safety Month. We hope they get your creative juices flowing!

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Tapping into a 529 plan for the first time? Tips for parents of college-bound grads…

It’s graduation season, and for many parents that means it’s almost time to start shelling out for college tuition. For those well-prepared parents with established 529 plans in place, the time has come to tap into that money pool. Of course, when it comes to tax-advantaged savings, trust that the IRS is keeping close watch, so it’s important to avoid making any rookie mistakes. It’s also important to keep saving as you move forward.

Consider the following tips:

• Withdraw only for qualified education expenses—Be very careful that you only make withdrawals for eligible expenses, including tuition, books and supplies, certain room and board expenses, and special equipment required by the school (e.g., an easel for an art student). When in doubt, err on the side of caution and check current 529 guidelines on the IRS website.
  
  
• Have your college student collect receipts and billing statements. Saving all source documents now may save you a few headaches later. All relevant documentation offers proof that 529 funds were used for qualified expenses. As the owner of the 529, you are responsible for any tax reporting, so you’ll need all supporting paperwork.
  
  
• Continue to make contributions and monitor investments. Just because you begin withdrawing from a 529 college savings plan, it doesn't mean you should stop contributing. It also doesn’t mean you should stop monitoring your investment allocations. It’s likely that now that your child is older, investments have become more conservative—but if not, you may want to review and make changes as needed.

If you are a first-time 529’er, these tips should help you avoid potential costly mistakes. Please reach out to our firm if you have any questions. Here’s to a fantastic graduation season!

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Tips for building a company culture that supports remote workers

Having a remote workforce can be challenging, especially if you are trying to build a positive, collaborative work environment. So, how do you create a sense of comradery when you have staff in remote locations? These tips can help:

• Design your culture to support remote workers. When you commit to having remote staff, you need to also commit to designing a culture that supports their success. Design employee experiences with remote workers as a priority, not as an afterthought.
  
  
• Include remote workers in company-wide events. If you have award presentations, quarterly all-staff meetings or issue weekly updates, for example, make sure you stream events so remote employees can watch or view on demand. If you host onsite employee events, such as a Friday Happy Hour or Bring Your Pet to Work Day, be sure to post photos on social media or within your internal staff communication solution. 
  
  
• Communicate important information in writing. It is easy to take for granted all of the communication that takes place verbally within a centralized office. Be cognizant of this and make sure that key information is shared with off-site team members.
  
  
• Talk face-to-face whenever possible. Face-to-face time is critical for building teams.  Use one of the many video chat technologies to meet face-to-face with everyone on your staff. In addition, make a point of seeing people in person when you can by scheduling regular visits and company gatherings.
  
  
• Mentor and coach remote employees with intention. Consider assigning your leaders to mentor specific remote employees, empowering them to discuss their career path and how it relates to overall company goals.
  
  
• Reiterate your shared vision and goals often. Communicating a shared vision to all staff is key when you are all working in different locations. Your progress should be tracked and discussed at all-employee meetings and in written company updates.

These are just a few ideas to help you keep your remote employees in the loop and feeling like they are part of your team. Fostering a strong, positive culture is key in any business, so make sure your remote workforce is part of that equation.

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Tax refund on the way? Use it to fortify your financial future.

If you are expecting a refund this year, you may be tempted to splurge on something not-so-practical. Before you do, take some time to think about ways to use your refund to bolster your financial health. We’ve put together a few ideas for you to consider:

• Start or increase your emergency fund: If you don’t already have at least six months of savings stashed away in case of an unforeseen financial emergency, use your tax refund to help build up your savings account.
  
• Eliminate or pay down high-interest debt: Paying off high-interest debt such as credit card balances, payday loans and debt consolidation loans with your refund is a smart move.
  
  
• Contribute to tax-sheltered accounts: Use your tax refund to top-up (or start) a Roth IRA or 529 college savings plan. You’ll compound dollars and interest for your future retirement or college tuition needs while scoring a tax deduction as well.
  
  
• Create a legacy: If you have always wanted to create your own foundation for giving back, use your tax deduction to get it started. You may even be able to use your new non-profit status to mitigate your tax bill for next year while doing good for others.
  
  
• Invest in yourself or your business: If you’ve taken care of savings and debts, consider enriching yourself by taking a class or purchasing a needed piece of equipment for your business.

These are just a few ways that you can fortify your financial future with your tax refund. Make a plan for using your money wisely this year.

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Take advantage of these Tax Day deals

Once your taxes have been filed, first, take a moment to breathe a big sigh of relief…and then enjoy some Tax Day (April 15, 2019) discounts. There’s nothing like a good deal to take the sting out of tax obligations. Below, we’ve compiled a short list of best food and drink deals, taken from offer.com.

• Applebee’s: Enjoy a Strawberry Dollarita for $1.
  
  
• Bruegger’s Bagels: April 10 to 15 get the Big Bagel Bundle (13 New York-style bagels with two tubs of cream cheese) for only $10.40.
  
  
• Firehouse Subs: Purchase a full-price medium or large sub, chips and a drink and get a free medium sub.
  
  
• Great American Cookies: Receive a free Original Chocolate Chip Cookie.
  
  
• Kona Ice: Spot a Kona truck and score free shaved ice on April 15.
  
  
• Menchie’s: Download their app by April 15 to get a free $5 frozen yogurt.
  
  
• Schlotzky’s Deli: Get a free small Original sandwich with the purchase of a medium drink and chips on April 15.

If you are looking to score some non-edible deals, Kohls, Macy’s, Holiday Inn Express and other companies are also offering discounts for taxpayers. Be sure to check out the Offer.com site and your local retailers to make sure you don’t miss anything.

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It’s spring! Reboot your enthusiasm with these tips…

The long stretch from the end of the winter holiday season until the next break in your routine can feel like eternity. If you feel the need to reboot your enthusiasm as the spring season arrives, try these tips:

Change your diet. Making just one step toward eating better can reboot your whole mindset toward how you feed your body. Consider adding one fruit or vegetable to each meal in place of one dessert or snack item. You’ll feel more energetic in just a few days.

Refresh your look. If you have been sticking to wintry colors, now is the time to break out some lighter hued clothing. Digging far back in your closet to find something brighter? You might want to tackle a closet clean out while you are at it.

Declutter. If you do tackle a closet clean out, why not another room? There’s nothing like a good room declutter to make you feel lighter and more in control. An obvious place to start is your office. Once you clean things out there, you’ll likely be more productive.

Indulge in a retreat. Taking even just a few days off can help you regain your perspective and feel more energetic. You don’t have to go far, either. Staying at home and having some “me” time can be just as productive as going on an exotic retreat.

Reboot your sleep routine. If you are consistently exhausted, consider establishing a regular sleep routine. Go to bed at the same time and get up at the same time during every 24-hour cycle. Stop eating 12 hours before you want to wake up, and avoid screen time starting a few hours before bedtime.

Cutback your calendar. Having too many commitments leads to stress and feeling overwhelmed. Make a plan to scratch anything from your schedule that doesn’t energize you, and then add things that are important to you so they don’t get pushed to the back burner.

Freshen up your finances. If your finances are stressing you out, consider talking to a professional who can help you get back in control of your money. Also, identify small changes you can make to slash expenses. From eating out less to nixing digital subscriptions, you’ll be amazed how much you can save.

Spring is just around the corner—the perfect time to apply a few of these tips to recapture your enthusiasm and fuel your energy!

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5 tips to dial down distractions

Our most precious commodity is time—and our attention is a close second. That’s why everyone can use some help on how to tune out daily distractions. We compiled the following helpful tips from copyblogger.com to get you started on dialing down distractions:

1. Go grayscale on your phone. Bright colors and fun graphics are the eye-candy that web and app developers use to keep us addicted to—and distracted by—our smartphones. Changing the visual display setting on your device to grayscale (at least on days where your time and attention are needed elsewhere) eliminates these visual rewards and reduces the distraction caused by your phone.
   
   
2. Keep your content clean. Be intentional about what you read online, selecting only content that adds value. In addition to being choosy about content worthy of your attention, you should also take steps to remove distractions during your reading time by using an ad blocker.
   
   
3. Have an unplugged place to explore and record your ideas. Stay focused by allotting some quality quiet time to brainstorm and write down your ideas. Consider carving out 15 minutes a week to close your office door and write down your goals, priorities and wishes.
   
   
4. Streamline your physical environment to reduce mental clutter. Quiet, organized spaces are great for detail-oriented thinking, while ambient noise-rich venues like coffee shops tend to be better for big-picture thinking. Consider these facts the next time you are struggling to stay focused. A quick switch of locations or spending 10 minutes to declutter your office may be highly beneficial in dialing back distractions.
   
   
5. Stay fresh with adequate sleep. It’s difficult if not impossible to stay focused for very long if you are exhausted. Experts agree that sleep deprivation (even at a moderate level) will adversely affect cognitive performance by impairing attention, decision-making, working memory and long-term memory. So, aim for at least seven to nine hours of sleep a night. If you must, you can get by on six hours—but not less!

Try implementing any or all of these tips to help preserve your time, attention and focus. When you do, you can reap the rewards of dialing down distractions on a daily basis.

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4 reasons to file your return early

The April 15 filing deadline is rapidly approaching, so we encourage you to send us your tax documentation as soon as possible to expedite the filing process. Here are four important reasons why you should file your return sooner rather than later:

1. Identity theft prevention. Once your return is filed with the IRS, personal information (such as your Social Security Number) is locked and cannot be used again by anyone else. So, filing your taxes early does help protect you against identity theft.
   
   
2. Faster returns. If you believe you are due a tax refund this year, the sooner you file the sooner you’ll receive your refund. Despite the recent government shutdown, the IRS is reviewing tax returns on a regular schedule.
   
   
3. More time to review for potential tax savings. Filing early provides our team with added time to prepare your return and ensure that all possible deductions are identified. Filing earlier also affords you more time to gather your paperwork and search for any additional documentation needed.
   
   
4. Additional time to save for a tax bill. If you owe the IRS money, filing early gives you more time to save in order to pay your tax bill by April 15.

If you have any questions, please contact us as soon as possible. We look forward to supporting you this tax season!

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A few key tax reform provisions every business owner should know about

This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community:

• New deduction for qualified business income of pass-through entities. This new provision, also known as Section 199A, allows a deduction of up to 20% of qualified business income for owners of some businesses. Limits apply based on income and type of business.
  
  
• Limits on deduction for meals and entertainment expenses. The TCJA generally eliminated the deduction for any expenses related to activities considered entertainment, amusement or recreation. However, under the new law, taxpayers can continue to deduct 50% of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant.
  
  Meals may be provided to a current or potential business customer, client, consultant or similar business contact. If provided during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment. Or, the cost of the food or beverages must be stated separately from the cost of the entertainment on one or more bills, invoices or receipts. Notice 2018-76 provides additional information on these changes.
  
  
• New limits on deduction for business interest expenses. The change limits deductions for business interest incurred by certain businesses. Generally, for businesses with 25 million or more in average annual gross receipts, business interest expense is limited to business interest income plus 30% of the business’s adjusted taxable income and floor-plan financing interest. There are some exceptions to the limit, and some businesses can elect out of this limit. Disallowed interest above the limit may be carried forward indefinitely with special rules for partnerships.

Of course, there are many other provisions to be aware of. And given the magnitude of some changes under the TCJA, you may want to contact our firm for further guidance.

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Ways to skinny down Super Bowl Sunday

According to Forbes.com, Super Bowl viewers traditionally load up on millions of pounds of less-than-healthy foods during the big game—including ribs, pulled pork, tortilla chips, nuts, popcorn and bacon—all washed down with beer (the Super Bowl beverage of choice). If you are trying to stick to your New Year’s resolution to eat better, consider a few healthy substitutes for the traditional Super Bowl eats:

• Serve fresh over fried. Substitute deep-fried for a tray of fresh vegetables. Then be creative with a few tasty lower-calorie dips. Part of maintaining a healthy diet is making smart trade-offs.
  
  
• Customize your chip pick. Cut the fat by buying baked tortilla chips. If you are feeling extra creative, you can also make your own sweet potato fries or beet chips—both delicious alternatives!
  
  
• Trade ribs for skinless chicken wings and drumsticks. Everyone loves ribs, but if you want something healthier, baking skinless poultry on the bone is a good alternative. Baste with some barbeque sauce for a delicious treat.
  
  
• Sneak fat-free into your bean dip. Simply use fat-free black beans in your bean dip instead of traditional refried beans. You likely won’t be able to tell the difference.
  
  
• Be picky with pizza. There’s no rule that says you have to order greasy, meat-laden pizza. If your household is jonesing for pizza, order at least one pie with less cheese and more veggies—and keep the crust thin.
  
  
• Sub in soda for alcohol. Having one or two beers won’t derail your diet. However, if you tend to over imbibe, sticking to club soda, diet soda or just plain water will save you calories and leave you feeling better the next day.

The average football fan can easily consume 5,000-plus calories on Super Bowl Sunday. And with all that couch sitting, it’s likely that not many of those calories will be burned off. Consider incorporating some healthier snack choices and start a new Super Bowl tradition that celebrates the flavor of lighter fare with the excitement of the big game.

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7 Ways to Empower Your Team to Grow

Your young staff are at the beginning of their career, and despite coming into your business with education under their belts, they aren’t expecting their learning to stop.

Their ideal workplace not only makes opportunities for learning available, but actively encourages and pushes staff to develop. They expect the majority of their learning to happen as they work, and they’re not wrong—some studies say as much as 90% of learning happens on the job. 

For your business, the benefits of your staff continually improving are clear. The most successful teams are built on outstanding staff members, but they don’t become outstanding without hard work and education.

It’s more important than ever that you provide learning opportunities to your staff. Here are seven ways you can empower them to grow and develop while they are on the job. 

Let them off the leash

If you’re watching your staff too closely, you can’t expect them to develop their own style. Clarify the overall objective of a task but then let go and show you trust them to complete it in their own way. They might not accomplish everything exactly as you would, but they will get the job done with their own flair. And most importantly, they will learn along the way.

Throw them in the deep end

Some people thrive when trusted with added responsibility. They gain confidence and find themselves using skills they didn’t even know they had. Identify which of your staff will benefit from this and put them in charge. You might ask them to lead a staff meeting, act as project manager for a particular job, or be the Change Champion when you introduce a new system into the team.

Look beyond your industry

There are many essential skills that need to be learned that are specific to the profession you're in. But just as numerous are the non-technical skills that are needed. For these, seek inspiration from other industries. Skills such as presenting, customer service or up-selling are common throughout the professional world. Bring people in from other industries to teach these non-technical skills to the team, and encourage individual staff to network with people in jobs that are a far cry from the industry they're familiar with.

Introduce mentoring

75% of millennials say they want to have mentors and think they are critical to their success. Give them this opportunity by introducing your own mentoring program, linking staff together within the four walls of your business. Not only will this give your team the one-on-one coaching they desire, but your team will also be strengthened as staff get to know those who they may not associate with otherwise. Watch this video to learn more about setting up a mentoring program in your business.

They learn about both professional life from someone they don’t work with and also have an opportunity to chat about anything they may like. It may not even be work related.Sam Rotberg, AS Partners
 

Provide a learning budget

Not everyone wants to learn the same thing or learn it in the same way. Give your staff the power to shape their own learning by allocating them their own learning budget. Each staff member can choose where they spend this money, providing it meets the criteria of relevant professional development. This ensures that your staff are learning what they want to learn, and also encourages them to put considerable thought into how they learn it.

Embrace small talk

An individual’s manager in the early stage of their career is one of the biggest influences they will have in the professional life. Don’t take this responsibility lightly. Get to know your staff on a personal level, keep your office door open wherever possible, and take the time for small talk. This will help them feel comfortable talking to you and confident that they can come to you with problems, questions and when seeking advice. 

Let them solve the problem themselves

Sometimes it’s important to step back and watch your staff fend for themselves, even if this leads to failure. Many of your staff will be naturally risk-averse, and if they work in an environment where they know their boss will correct them before they even have the chance to act, they will always look for approval. When it’s not going to be detrimental for your business, let them figure out on their own that they're wrong, and then let them find a better solution. This will help them put much more thought into their work rather than simply doing, and also create a more innovative mindset. 

You will find these strategies won’t require much effort to maintain. Instead, they will become organic and a culture of learning and self-development will flow throughout your team. Your staff will grow rapidly, producing results they are pleased with and that have a wider positive impact. Empowering your team should be a no-brainer for any business serious about growth and success.

Reprint from Karbon

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On your mark, get set…GO prepare for tax season

The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.

Also, consider going completely digital this year. Start by scanning in your paper receipts and other source documents and organizing them within a dedicated online folder. When the time comes, all you’ll need to do is upload your digital documents for our team.

The checklist below will help you start to compile the basics:

• Copy of last year's return (for first-year clients; include spouse’s return if applicable)
  
  
• Paperwork for dependents, including SSNs and DOBs
  
  
• All proof of income, including W-2s and 1099s
  
  
• List of deductions

Feel free to contact us with questions. We are here to help make tax season as stress-free as possible for you!

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Changes to the Massachusetts Minimum Wage

IMPORTANT CHANGES TO THE MASSACHUSETTS MINIMUM WAGE
 

An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday was signed into law on June 28, 2018 by Massachusetts Governor Charlie Baker. This bill raises the minimum wage to $15 per hour; service rate to $6.75/per hour; mandates paid family and medical leave for Massachusetts employees; phases out Sunday and holiday premium pay for retail employees and creates a permanent sales tax holiday weekend.

Employee Minimum Wage

 ●    Minimum Wage will incrementally  increase to $15/hr  on the following schedule 

Jan. 1, 2019 - $12

        Jan. 1, 2020 - $12.75

        Jan. 1, 2021 - $13.50

        Jan. 1, 2022 - $14.25

        Jan. 1, 2023 - $15.00

 Tipped Employee Minimum Wage

 ●    Minimum Wage will incrementally increase to $6.75/hr  on the following schedule

Jan. 1, 2019 - $4.35

        Jan. 1, 2020 - $4.95

        Jan. 1, 2021 - $5.55

        Jan. 1, 2022 - $6.15

        Jan. 1, 2023 - $6.75

●    Minimum Wage calculated per shift not per pay period starting in 2019

     
 
Repeal of OT pay for Sundays and Holidays

●    Phases out of retailer’s requirement to pay overtime for Sundays and Holidays

        January 1, 2019 OT/holiday rate is 1.4 times regular rate

        January 1, 2020 OT/holiday rate is 1.3 times regular rate

        January 1, 2021 OT/holiday rate is 1.2 times regular rate

        January 1, 2022 OT/holiday rate is 1.1 times regular rate

        January 1, 2023 OT/holiday rate is 1.0 times regular rate
 

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New Massachusetts HIRD Reporting Requirements

 The Health Insurance Responsibility Disclosure(HIRD) form is a new state reporting requirement in Massachusetts. The HIRD form collects employer- level information about your employer-sponsored insurance offerings. The HIRD form will assist MassHealth in identifying its members with access to qualifying employer-sponsored insurance offerings who may be eligible for MassHealth
Premium Assistance

Who is required to complete the HIRD form?

State law requires every employer in Massachusetts with six or more employees to annually submit a
HIRD form. If you are an employer who currently has (or had) six or more employees in any month
during the past 12 months preceding the due date of this form (November 30th of the reporting
year), you are required to complete the HIRD form. An individual is considered to be your employee
if you as the employer included such individual in your quarterly wage report to the Department of
Unemployment Assistance (DUA) during the past 12 months. You are required to complete the
HIRD form if you reported six or more employees (includes all employment categories) in any DUA
wage report during the past 12 months.

How do I submit the HIRD form?

The HIRD reporting is administered by the DOR through the MassTaxConnect (MTC) web portal.
The MTC is where employer-taxpayers register to file returns, forms, and make tax payments. To file
your HIRD form, login to your MTC withholding account and select the “File health insurance
responsibility disclosure”. If you do not have an MTC account, or if you forgot your password or
username, you may follow the instructions provided on the MTC web page (https://
mtc.dor.state.ma.us/mtc/_/#1) or contact the DOR at 617-466-3940.

When do I submit the HIRD form?

The HIRD reporting is required annually, beginning in filing year 2018. The HIRD reporting period
will be available starting November 1 of the filing year, and must be completed by November 30 of
the filing year. Thereafter, HIRD reporting will be due on November 30 of each subsequent year.

For more information on the HIRD requirements or other services, please contact our firm. We are happy to discuss how we can help you . We look forward to hearing from you.

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EMAC Supplement Tax - Action Required

Massachusetts EMAC Supplement Tax Overview

The Massachusetts (MA) Department of Unemployment Assistance (DUA) created a new Employer Medical Assistance Contribution (EMAC) Supplement. You may have received a notice from the MA DUA with additional information. The following are some frequently asked questions

To whom does this apply?

•  Employers with more than five employees in Massachusetts whose non-disabled employees obtain health insurance from either MassHealth or Massachusetts ConnectorCare program.

How much is the tax and how is it calculated?

• The contribution is 5% of annual wages for each non-disabled employee, up to the annual wage cap of $15,000, for a maximum of $750 per affected employee per year.

• The DUA calculates the supplemental tax after the quarterly wage statements have been submitted.

What we will do as your payroll provider:

First Quarter 2018

• We will assign the new EMAC Third-Party Administrator(TPA) roles to ourselves. This will allow us to view and pay the supplemental tax on your behalf.

• We will file the DUA Quarterly Wage report on or before April 1, 2018.

• We will monitor the DUA website for the EMAC Supplement Liability Determination and inform you as soon as possible of any balance due. According to the DUA, determinations should be available on or before April 19, 2018.

• Before the due date of April 30, 2018, we will access your DUA account and make the calculated payment in full as per the Liability Determination.  Payments will be withdrawn directly from your bank account on the next business day.

Massachusetts EMAC Supplement Tax

  HOW WE CAN HELP

As your payroll partner, we realized that this additional tax may cause a cash flow headache and have worked diligently to find a solution. With you in mind, we have modified our systems to calculate and collect the EMAC Supplemental tax each pay period. By paying the supplemental tax with each pay cycle, the balance due at the end of the quarter should be minimized or eliminated. We will be implementing this new system starting April 1, 2018 and ask for your cooperation in providing us with some necessary information.

All you need to do:

• Provide us with a list of employees who are enrolled in either MassHealth or the Massachusetts ConnectorCare program.

• With each new hire, inform us if the employee is enrolled in either MassHealth or the Massachusetts ConnectorCare program

• Review the Liability Determination Report (which we provide to you on a quarterly basis) and inform us of any changes in employee eligibility.

We will continue to:

• File the DUA Quarterly Wage report on a timely basis.

• Monitor the DUA website for the EMAC Supplement Liability Determination and inform you as soon as possible of any balance due or overpayments.

• Before the payment due date, we will access your DUA account and if applicable, make payment for any shortage.  Payments will be withdrawn directly from your bank account on the next business day; overpayments will be refunded to you, via check, on the next business day.

• We will provide you with a copy of the Liability Determination Report for review.

We are continuously striving to provide you with the best service possible. If you have any question, please feel free to contact us by phone or email. You can also email the DUA at EMACQuestions@MassMail.State.MA.US for further information.

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2018 Payroll Withholding Tables

According to a statement issued by the Internal Revenue Service (IRS), the agency is currently working on the new withholding tables to accompany the new tax rates that are part of the tax reform bill signed into law on December 22, 2017. They anticipate issuing the initial withholding guidance in January, and employers and payroll service providers can implement the changes in February.

Until the new rates are published, employers should continue to use the existing 2017 withholding tables and systems.

As for new W-4 forms, the IRS indicates that the new information will be designed to work with the existing Forms W-4 that employees have already filed, and employees will not be required to complete new Forms W-4. Many employees, however, will want to complete a new Form W-4 to have more money in their paycheck due to the reduction in federal payroll taxes with the new law.

ThnkHR 

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A Massachusetts Employer’s Obligations Related to the Employer Medical Assistance Contribution (“EMAC”)

A few months ago, “An Act Further Regulating Employer Contributions to Health Care,” was signed into law without associated regulations, leaving employers in the difficult spot of trying to interpret the vague and confusing language. Recently, the Massachusetts Department of Unemployment Assistance published draft regulations that help to clarify the law. Because the effective date is looming (1/1/18), it is important to examine the draft regulations for guidance and assume these regulations will be finalized as currently written. We will, of course, update you if there are any changes.

In 2018, employers will be responsible for two types of contributions related to healthcare:

The Employer Medical Assistance Contribution (“EMAC”) – requires that an employer with 6 or more employees provide a contribution, per employee, to support the Commonwealth Care Trust Fund.
The EMAC supplement, sometimes referred to as the penalty portion of the law, requires that an employer with 6 or more employees pay a contribution for each employee who receives health insurance coverage through the MassHealth Agency or ConnectorCare.

Which Employees are Covered?

The EMAC relies on the definition of “employee” set out in Massachusetts’ unemployment insurance laws. This means that any regular employee, regardless of full or part-time status, contributes to an employer’s count. Depending on the length of employment, temporary/seasonal workers may also need to be included. To be clear, an employee should be included in an employer’s count, and may subject the employer to an EMAC penalty, even where the employee is not qualified for employer-provided benefits under the Affordable Care Act.

An employee is considered to work in Massachusetts if he/she: a) performs work entirely in Massachusetts; b) performs work in and out of Massachusetts, but the work out of state is incidental to the work within the state.

Which Employers are Covered?

Any Massachusetts employer, including a not-for-profit employer, with 6 or more employees working in Massachusetts, is subject to the EMAC and the EMAC supplement.

The employee count is determined each quarter by calculating the average number of employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. For smaller employers, this means that you may be subject to the law in some quarters and exempt in other quarters. 

The EMAC Contribution Increase

The EMAC contribution itself is not new. Beginning 1/1/18 however, the amount employers must contribute will change:

• For an established business, the contribution will increase from .34% of wages to .51% of wages.
• For a new business:
  • Not required to provide EMAC contributions until 12 months after they have been provided an unemployment insurance contribution rate.  This means that an employer will generally not have to pay an EMAC contribution for years 1, 2, or 3 of business operations.
  • Responsible for .18% of wages the first year of contribution (4th year of business)
  • Responsible for .36% of wages the second year of contribution (5th year of business)
  • By the third year of contribution (6th year of business), the business follows the rules for established businesses.
    • “Wages” for the purposes of EMAC means the unemployment insurance taxable wage base.
    • Wages are capped at $15,000.  So, if an employee’s wages exceed $15,000, you multiply the contribution rate times $15,000, rather than the actual wages.  This means that, in 2018, an established business will pay a maximum of $77/employee/year (.0051 x 15000)

The EMAC Supplement/Penalty

A covered employer will pay a 5% penalty for each employee who receives health insurance through either the MassHealth agency (the Office of Medicaid) or ConnectorCare (available where the household income is less than 300% of the FPL) for fourteen or more consecutive days in the quarter.  Here, too, wages are capped at $15,000. This means that a business will pay a maximum of $750/employee/year (.05 x 15000).

However, the penalty does not apply for any employee who receives coverage through the MassHealth agency either: a) on the basis of permanent and total disability, or b) as a secondary payer where the employee is enrolled in the company-sponsored insurance. Premium assistance does not trigger the penalty.

Note, too, that most individuals who are otherwise eligible for MassHealth will be required to take their employer’s plan if the plan meets the basic coverage criteria and the employer pays at least 50% of the premium. Therefore, if your company pays at least 50% of premiums, you will generally not be subject to the fines.

How Does an Employer Calculate the EMAC and the EMAC Supplement?

The employer is not responsible for calculating either amount. All employers, including new businesses in the first three years, must submit a quarterly “Employment and Wage Detail Report” to the Department of Unemployment Assistance (DUA), which will be used as the basis for the DUA’s calculation.  The form can be submitted online.  Once submitted, the required EMAC and EMAC supplement payments will be automatically calculated. The DUA will also receive information from the MassHealth Agency and the Connector to aid in its determination of liability related to the EMAC supplement.

The quarterly employer reports are due at the end of April (Q1), July (Q2), October (Q3), and January (Q4). Payments are due by the end of the first month following the end of each quarter.

The report must include:

For each employee: name, social security number, wages paid, hours worked, total amount of taxes withheld, amount of wages upon which the withholding was based, the identification number assigned the employer by the DUI, the corresponding federal employer identification number, and the identification number the employer is required to include on a withholding tax return.
The report also should include the count of all employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. Because the state can estimate your employee count if the number is not provided, we suggest that all employers provide this data, even if they have fewer than six employees.

We hope this has answered some of the lingering questions since this bill passed.   Please reach out with any questions or for further information on the law.

Reprint of post on December 19, 2017 by Foley & Foley law

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Vacation Float: Managing ( and Recouping) Unearned Vacation Time

Vacation Float: Managing (and Recouping) Unearned Vacation Time

By Jennifer Rubin on July 26, 2017

Summertime is vacation time. And vacation time means headaches for employers who engage in vacation float. Vacation “float” is the practice of advancing vacation to employees before they actually accrue it under an employer’s vacation policy. So the question becomes, if you allow an employee to take vacation time the employee hasn’t actually earned, how do you get the value of that time back if the employee leaves before “repaying” it?

Today’s staggering rate of employee mobility creates compliance challenges for employers with generous paid time off programs. This problem is particularly vexing for employers in states like California and Massachusetts that classify accrued vacation as an earned wage. Like an employee’s paycheck, vacation time has an actual cash value, and once that cash is provided, it can’t be recouped – or can it?

Assume you hire a new employee and, for a variety of really good reasons (among them, a pre-planned, pre-purchased vacation booked before job offer and acceptance, typically involving extended travel or worse, extended travel with extended family), the employee must take vacation relatively early in the employee’s tenure – and before the employee has banked enough paid vacation. In this instance, the employer “advances” vacation time.

The employee takes and enjoys the vacation, returns from vacation and then resigns (or is fired), leaving a debt to the employer in the amount of salary paid, but not technically earned.

Some employers may operate under the assumption that the employer can simply withhold the employee’s final paycheck in the amount of the advanced but unearned vacation. But in California and Massachusetts (and many other states), this would be an illegal withholding of wages, subject to statutory punishment. So what is an employer to do in those states that treat vacation as earned wages?

The easiest approach would be for an employer to adopt a bright line approach and refuse to permit an employee to take paid vacation time until that vacation time is accrued. An alternative (but more complex) approach would be to adopt the unlimited paid time off approach that is becoming so common (in which case there is no liability for accrued vacation when an employee terminates, which is frankly a more material problem dollar-wise for employers than vacation float).

Another approach is for the employer to sue an employee to recover paid but unearned wages. But that approach is impractical and inefficient.

Another approach, which only works if the employee returns to work for a period of time before termination, would be to stop vacation accruals until the advanced vacation balance is repaid. This is perfectly legal, but requires administrative attention and really only works if the employee stays long enough to earn and then repay the advanced time.

Another method is the middle ground of permitting vacation but at a lower salary level. This might not be palatable to employees, particularly high-income earners with significant financial responsibilities.

An employer could also treat the advanced vacation time as a retention bonus – which is due and payable if the employee leaves employment prior to a designated date. That makes the voluntary repayment of the advanced sums more likely – but doesn’t solve the problem presented in California and other states that flatly prohibit employer self-help repayment schemes from final paychecks.

The moral of the story is this: vacation float will continue to happen as long as employers condition vacation time on employment tenure. But employers who still use paid time off schemes should carefully monitor vacation float and closely administer it to prevent abuse and attendant financial liability, particularly in jurisdictions that treat vacation time like a wage. Happy summer to all.

By Jennifer Rubin on July 26, 2017
POSTED IN CALIFORNIA, EMPLOYEE BENEFITS, EMPLOYEE COMPENSATION, EMPLOYEE MOBILITY, HUMAN RESOURCES, MASSACHUSETTS, PAID TIME OFF, SICK LEAVE, WAGE AND HOUR ISSUES

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Top Seven Questions About Health Coverage for Domestic Partners

The U.S. Supreme Court settled the issue of same-sex marriages several years ago. The marriages are legal throughout the country and all spouses, regardless of gender, are treated the same under federal and state laws affecting benefit plans. Less clear, however, is the issue of domestic partners, civil unions, and other unmarried relationships. Employers often have questions about whether they are required to extend health coverage to unmarried partners and how to administer their plans if coverage is extended.

Following are the top seven questions we receive from employers about domestic partner health coverage.

1. What are domestic partnerships and civil unions?

A domestic partnership or civil union generally refers to two adults, unrelated by blood and neither of whom is married, who are in a committed relationship and assume responsibility for each other’s financial and emotional needs. Although not recognized under federal law, some states have established definitions for “registered domestic partnerships,” “domestic partnerships,” and “civil unions” to extend specific rights and responsibilities under various state laws. There also are several municipalities and local jurisdictions that extend rights to unmarried couples that meet the criteria developed by the jurisdiction. Further, many employers have voluntarily adopted broad definitions of domestic partners to extend eligibility under their group health plans.

2. Do employers that offer group health coverage to spouses also must cover domestic partners?

Employers may choose to extend eligibility to domestic partners, but it is not required unless mandated by a state’s insurance law. Most states have no requirements while others, such as New Jersey, merely require group health carriers to offer the employer the option of including domestic partners as dependents. California, on the other hand, has the strictest requirement: any group policy that covers spouses must extend eligibility to “registered domestic partners (RDPs).” The California Family Code defines RDPs and the California Secretary of State provides a registration system.

Employers that purchase group health insurance receive specific information from the carrier about any applicable state insurance laws. Self-funded (uninsured) plans are not affected since they are exempt from state insurance mandates.

Note: Public-sector employers, such as cities, counties, and public schools and universities, and private-sector employers that contract with public agencies, may be subject to additional requirements under local laws. Specific information typically is provided to the parties by the government agency.

3. Is special tax reporting required for domestic partner health coverage?

Yes, in most cases. Although group health coverage provided to the employee, spouse, and children under age 27 (and some older children) is tax-free, the value of any employer-paid coverage for a domestic partner is taxable. The employer must report the fair market value of the coverage, minus any after-tax contributions paid by the employee, as imputed income on the employee’s Form W-2 for federal and state/local tax purposes. There are two exceptions:

Federal: Coverage is tax-free if the domestic partner meets the following conditions under § 152 of the Internal Revenue Code:

Shares the same principal residence as the employee;
Receives more than half of his or her support from the employee;
Is a citizen, national, or legal resident of the United States, or resident of Canada or Mexico; and
Is not a qualifying child of a taxpayer.
State/Local: The majority of state and local tax laws conform to federal law, so taxes do not apply if the domestic partner is the employee’s tax dependent under § 152. (Non-conforming states, however, may impose state and/or local taxes.) Alternatively, several states specifically exempt certain categories of domestic partners from state or local taxes, even though federal taxes apply. For instance, California does not tax the value of employer-paid coverage for registered domestic partners (RDPs) as defined by state law.

Employers that offer health coverage to domestic partners should refer to their payroll vendor for specific information about the state and local tax withholding and reporting rules in the locations where their employees live and work.

4. Can employees pay for domestic partner health coverage on a pretax basis?

Cafeteria plans allow employees to make pretax contributions for group health coverage, but only for employees and their tax dependents (i.e., spouse, children, and § 152 dependents). Most domestic partners do not meet the financial dependency criteria to qualify under § 152, so contributions for their coverage would have to be made on an after-tax basis. IRS regulations permit an accommodation, however, for the employer’s convenience in administering payroll. That is, the cafeteria plan may allow pretax contributions for the domestic partner’s health coverage, provided that the full market value of the coverage is reported as the employee’s imputed income. For instance, assume the market value of the partner’s coverage is $200, the employee contributes $50 on a pretax basis, and the employer contributes the remaining $150. In that case, the employee’s taxable income is reduced by $50, but $200 of imputed income is reported on the employee’s W-2.

5. Can employees make midyear enrollment changes to add or drop their domestic partner?

Special enrollment rules under the Health Insurance Portability and Accountability Act (HIPAA) allow employees to add coverage midyear for a new spouse, but not for a domestic partner (since no marriage has occurred). On the other hand, the HIPAA rule for a midyear enrollment in the event a dependent losing his or her coverage under another plan does apply to domestic partners (if eligible for the employer’s plan).

Cafeteria plans may allow midyear changes in accordance with IRS regulations for permitted election changes. Although not required, employers that extend health plan eligibility to domestic partners also often provide for midyear enrollment changes under their cafeteria plans.

Beware of discrepancies between the group health insurance policy and the cafeteria plan document. Carriers are required to include the mandatory HIPAA special enrollment rules in group policies, but they often omit the optional cafeteria plan provisions. Always check all documents and policies before allowing an employee to make a midyear change. Self-funded employers should ensure that any stop-loss insurance protection applies with respect to all persons who are eligible under the group plan.

6. Are domestic partners eligible for other health-related benefits, such as FSAs, HRAs, or HSAs?

In most cases, no. Reimbursements from health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs) are limited to eligible health care expenses for the employee and his or her tax dependents. Domestic partners are not tax dependents, unless the domestic partner qualifies under § 152, which usually is not the case.

7. Are domestic partners eligible for COBRA?

Federal law defines COBRA-qualified beneficiaries as the employee (or former employee), spouse, and children if covered under the group health plan at the time of the qualifying event. A domestic partner, therefore, is not a COBRA-qualified beneficiary in his or her own right. The employee, however, may elect COBRA for his or her domestic partner, if the group health plan extends eligibility to domestic partners, since COBRA beneficiaries have the same enrollment options as active employees.

Separately, many states have enacted coverage continuation provisions under their state insurance laws. These often are referred to as “mini-COBRA” laws. Certain states that provide protections for domestic partnerships or civil unions may also extend their mini-COBRA provisions. California is one example; Cal-COBRA (the state’s mini-COBRA law) extends to registered domestic partners (RDPs) as defined by state law. Mini-COBRA provisions, if any, will be described in the carrier’s group policy.

In summary, employers that choose to extend group health plan eligibility to domestic partners, or who purchase group policies that include state-mandated domestic partner provisions, are encouraged to work with carriers, benefit advisors, and payroll vendors to develop and administer appropriate procedures. All plan materials should contain consistent definitions of eligibility, communications should encourage employees to consult their tax advisors regarding federal and state tax laws, and payroll vendors should ensure accurate W-2 reporting.

Source: ThinkHR

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Employers Must Use New Form I-9

The U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services (USCIS) implemented a new Form I-9, Employment Eligibility Verification, which employers are now required to use. The new form, dated November 14, 2016, was effective as of January 22, 2017 and will remain in effect until August 31, 2019.

The revised Form I-9 is easier to complete on a computer. Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over. When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers. In addition, the new form:

• Asks for “other last names used” rather than “other names used.”
• Includes prompts to ensure information is entered correctly.
• Includes a dedicated area for including additional information.
• Allows users to enter information about multiple preparers and translators and includes a supplemental page for the preparer/translator.

Below are some frequently asked questions about the Form I-9.

Frequently Asked Questions

What is the Form I-9?

Since November 7, 1986, U.S. employers have been required to verify the identity and work eligibility of every new hire, citizen and non-citizen. Form I-9 helps employers do this. The form is updated periodically and employers must ensure they provide new employees the complete and most up-to-date forms.

Who must complete Form I-9?

Both employers and employees are responsible for completing their respective portions of Form I-9. New employees must complete the form with accurate information and provide supporting documentation to the employer establishing their identity and their ability to work in the United States. Employers must ensure the form is properly completed, corrected (as necessary), and supporting documentation is provided. However, pursuant to § 7 of the Privacy Act (8 U.S.C.A. § 552a), providing a Social Security number on the Form I-9 is voluntary for all employees unless the employer participates in the E-Verify Program, which requires an employee’s Social Security number for employment eligibility verification. Both parties must sign the completed form either by hand or electronically.
When must the Form I-9 be completed?

Employees must complete Form I-9 any time between the time they accept an offer of employment and the end of the work day on their first day of work. An employer must complete its portion of the form no later than the close of business on the employee’s third day of work. If an employee is hired for less than three business days, then Sections 1 and 2 of the form must be fully completed at the time of the hire, when the employee begins work.

What type of supporting documentation is required?

Form I-9 provides very specific supporting documentation that may be used to establish identity and ability to work. Some documents alone satisfy both the identity and ability to work criteria. These are documents found in List A of the form. Documents in List B only establish an employee’s identity, while documents in List C only establish an employee’s eligibility for employment. Therefore, an employee must provide one document from each list (B and C) if he or she does not provide a document from List A.
Employers cannot specify which documents must be provided, except that employers who participate in the USCIS E-Verify program may only accept List B documents that have a photograph.

Employers must accept any unexpired document(s) (from the List of Acceptable Documents) presented by the individual, which reasonably appear on their face to be genuine and to relate to the person presenting them. Employers are not required to make copies of the documents; however, employers may attach photocopies of documentation to the employee’s Form I-9. Employers who make and attach photocopies must do so consistently for every employee without regard to citizenship or national origin.
Employers must also comply with specified document retention requirements for completed Form I-9 and detailed reverification procedures for current employees.

What if an employee fails to provide documentation?

Employers should terminate an employee who fails to produce the required documents for employment within three business days of the date employment begins.

An employee may present a receipt for a replacement document (in the case of lost, stolen, or destroyed documents) as a temporary solution. However, if an employee has presented a receipt for a replacement document, the employee must produce the actual document within 90 days of the start of employment. Employers must apply these practices uniformly to all employees.

Are there penalties for failure to comply?

Failure to comply with employment eligibility verification requirements can result in both civil and criminal penalties for an employer. For example:

• Employers who fail to properly complete, retain and/or make Form I-9’s available for inspection may incur civil penalties between $216 and $2,156 for each employee for which the form was incorrect.

• Employers who knowingly hire unauthorized aliens or continue to employ aliens who become unauthorized to work may be ordered to cease and desist and pay a penalty between $539 and $21,562 for each unauthorized alien, depending on the number of prior offenses.

• Employers engaging in a pattern or practice of knowingly employing unauthorized workers may face criminal penalties of up to $3,000 in fines and imprisonment of up to six months.

Civil and/or criminal penalties may also be imposed on employees in certain circumstances.

Summary

While this article highlights key areas of compliance, there other necessary requirements employers must follow for verifying and employee’s identity and eligibility for employment to remain compliant. Failure to comply can result in significant penalties. Employers are encouraged to ensure they are using the most up-to-date Form I-9 for all new hires and to review the form instructions and the U.S. Citizenship and Immigration Services Handbook for Employers. Employers should consistently review and audit their processes and work with counsel or other trusted advisors to ensure compliance.

Source: ThinkHR

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Furnishing Employees with Electronic Form W-2

Question: Is consent required prior to furnishing employees with an electronic Form W-2 rather than the standard paper W-2?

Answer: Yes, consent is required prior to furnishing employees with an electronic Form W-2. According to IRS Publication 15-A, employers may establish a system to furnish Form W-2 to employees electronically; however, each participating employee must first consent (either electronically or by paper document) to receive the Form W-2 electronically, and the employer must notify the employee of all hardware and software requirements to receive the form. Employers may not send a Form W-2 electronically to any employee who does not consent or who has revoked any previous consent. To furnish Forms W-2 electronically, employers must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to employees. In addition:

• The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically.
• The employee must be informed of the scope and duration of the consent
• The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent.
• The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2.
• The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment).
• The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2.
• The employer must notify the employee of any changes to the employer’s contact information.

Employers must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. For more information on furnishing Form W-2 to employees electronically, see 26 CFR 31.6051-1(j).

Source: ThinkHR Best Practices

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Tips to Defend Your Business from Cyber Attacks

You need only tune into the news to see that cybercrimes are a very real threat. From viruses to malware, everyday computer use and online browsing can leave you vulnerable to hackers who want your valuable information. If you have a small business, your risk of a cyberattack is likely even higher, especially if you do not have the resources or know-how to enact effective security policies. In addition to engaging an IT professional to help you identify and mitigate your cyber risks, consider using these tips from Entrepreneur.com to keep your business safe:

1. Analyze your email security to identify potential threats. If you’re not protecting your company emails and other electronic communications with encryption, you should. This will make it harder for hackers to succeed in accessing your data.
   
   
2. Do the obvious: Install malware, spyware and firewall programs. There are many good, cost-effective software programs you can use to protect your business from incoming cyberattacks such as those made by Malware Bytes, McAfee and Norton. Part of the protection plan for your business should be to install these programs on every work-related computer to help catch and eliminate threats.
   
   
3. Power up your password policies. Passwords are your first line of defense against cyber criminals, so make sure that you and your employees know how to use them effectively. While using longer, complex passwords and changing them frequently may be a bit of a hassle, it’s a crucial strategy for avoiding a devastating cyber attack.
   
   
4. Train your employees to recognize suspicious online activity. It’s definitely a good idea to school yourself on how to avoid being a victim of a cyber attack, but unless you’re a solopreneur, you need to make sure that your employees know how to protect themselves and your business, too. Be sure to provide formal computer and online security procedures and information that will help your staff spot and stop potential threats before they do damage to your business.

Protecting your company against cybercrimes is an absolute must in today’s business environment. Use the tips above to help you get started and be sure to reevaluate your cyber protection plan at regular intervals to defend your business against new and emerging threats.

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Increase in Massachusetts Minimum Wage

Effective January 1, 2017 the minimum wage in Massachusetts has increased again. The new minimum wage is $11 per hour and the new service rate is $3.75...for more information check out our Resource Center at http://stevenmellardcpa.com/resourc…/faq-ma-new-minimum-wage

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Break Barriers in 2017 with These Mind-Changing Mini Resolutions

There’s a reason why the regular New Year’s resolutions like losing weight, exercising more and sticking to a budget are popular—so many of us need to do them! There’s also a common reason why so many of us fail to meet our goals in these areas: we haven’t developed the mindset to support the changes that we want to make.

Instead of setting a big, audacious goal right now, consider making some of what Jacob Geers of the ThoughtCatalog.com terms “mini-resolutions.” They’re little changes that can have a big impact on your mindset, and which can ultimately allow you to break the barriers holding you back from reaching bigger goals, such as losing 25 pounds this year. Here are a few examples:

1. Get enough sleep. If you think sleep is a waste of time, consider that most people need between 7 and 8 hours a night to operate at peak performance. Getting less sleep can cause you to overeat, make poor choices when it comes to dealing with stressful situations, and just be plain cranky.
   
   
2. Just say “no.” If you’re always taking on one more thing to help other people out, you may be sabotaging your own health and happiness in the process. Being more mindful about how you spend your time will give you the opportunity to do things that will move you closer to your own goals.
   
   
3. Take a social media holiday. Research has shown that heavy use of social networks can actually cause feelings of negative self-worth, which is counterproductive in making good on self-improvement resolutions. Taking a break from social media will also free up your time to focus on your goals.
   
   
4. Give yourself space. It’s amazing how much calmer, in control, and focused you’ll feel if you simply give yourself a little time and space to connect with nature, or even just allow some extra breathing room between meetings and other obligations. This can have a positive impact in other areas of your life which may need some tweaking, too.

While these mini resolutions may seem too small to make a difference at first, once you try them, it’s likely you’ll find yourself feeling more ready and energized to break down the barriers that lie between you and achieving the bigger goals you have for this year.

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Keep the Holidays Merry with These Simple Stress Relievers

The holiday season can be wonderful, but they can also be one of the most stressful times of the year. Fortunately, the experts at Psychology Today also offer these simple stress relievers to put the joy back in this special time of year:

1. Take a time-out. Time-outs aren’t just for toddlers who have a tantrum. In fact, rather than being a punishment time-outs (a.k.a. quick relaxation breaks) can be a positive addition to calming adults with frenetic schedules. So, when you feel overwhelmed during the day, do one to five minutes of a relaxing activity to restore your sense of calm.
   
   
2. Opt for optimism. If you find yourself getting annoyed with friends or family over the holidays, try to shift your negative thoughts to positive ones. This can help you view the situation at hand with gratitude instead.
   
   
3. Fit in fitness. Even if you are tight on time, squeeze some exercise into your schedule. You will feel better and calmer if you get your body moving. Even just a 20 minute walk once a day will help you keep stress at bay.
   
   
4. Eat smart. Okay, easier said than done this time of year, but if you make a concerted effort to control your portions and balance your diet, you will avoid sugar crashes and the other negative effects of overdoing it on holiday treats. This will not only help to stabilize your mood, but it will keep your energy up, too.
   
   
5. Make a ‘to-do’ list—then cut it.  Writing down all that you have to do during the holidays can be overwhelming, but it can also help you realize how do-able your tasks are. Be realistic as to what you put on your lists. Then lighten your load by cutting items that are not absolutely necessary.
   
   

It’s easy to become overwhelmed by economic and social pressures to live up to unrealistic expectations for what you are supposed to do, give and feel during the holidays. Use the tips above to help you beat seasonal stress and truly enjoy this special time of year.

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Obama’s New Overtime Pay Rule is On Pause—What Does it Mean for Your Business?

Just days before it was scheduled to be implemented on December 1, a federal judge in Texas has blocked the implementation of the new Department of Labor (DOL) federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay. According to an NPR report, this extension of overtime eligibility would have affected 4 million Americans and required employers to pay time-and-a-half to their employees who worked more than 40 hours in a given week and earned less than $47,476 a year.

Lawsuits objecting to the overtime rule were filed by 21 states, the U.S. Chamber of Commerce, and other business groups concerned about the negative impacts of the legislation on businesses—including higher payroll costs and reduced staffing flexibility. The DOL plans to challenge the decision and argues that the new rule would have helped to offset income erosion due to inflation and that the rule would deliver fairer pay to lower-wage employees who are currently exempt from overtime pay. The DOL also stated that the salary level was set purposefully low to screen out obviously nonexempt employees such as executives and higher-level professionals.

Although the overtime extension rule will not take effect in December, it could still be implemented in the future. Employers should continue to follow the existing overtime regulations until a final decision is reached. For those employers who have already raised exempt employees’ salaries to meet the new threshold or who have reclassified employees who are still earning less to nonexempt status, the Society for Human Resources Management (SHRM) recommends leaving such decisions in place because they would be difficult to reverse. However, employers may want to postpone making any further moves until a final ruling is made.

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FLSA overtime rule blocked by court

By Daniel Wiessner and Robert Iafolla

A federal judge on Tuesday blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect, imperiling one of the outgoing president's signature achievements for boosting wages.

U.S. District Judge Amos Mazzant, in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction.

The rule, issued by the Labor Department, was to take effect Dec. 1 and would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay. The new threshold would have been the first significant change in four decades.

It was expected to touch nearly every sector of the U.S. economy and have the greatest impact on nonprofit groups, retail companies, hotels and restaurants, which have many management workers whose salaries are below the new threshold.

The states and business groups claimed in lawsuits filed in September, which were later consolidated, that the drastic increase in the salary threshold was arbitrary.

On Tuesday, Mazzant, who was appointed by President Barack Obama, ruled that the federal law governing overtime does not allow the Labor Department to decide which workers are eligible based on salary levels alone.

The Fair Labor Standards Act says that employees can be exempt from overtime if they perform executive, administrative or professional duties, but the rule “creates essentially a de facto salary-only test,” Mazzant wrote in the 20-page ruling.

The states and business groups that challenged the rule applauded the decision.

Nevada Attorney General Adam Paul Laxalt said in a statement that the ruling "reinforces the importance of the rule of law and constitutional government."

The Labor Department said it strongly disagrees with the decision. It remains confident that the entire rule is legal, and it is currently considering its options, department spokesman Jason Surbey said.

The Labor Department can appeal to the New Orleans, Louisiana-based 5th U.S. Circuit Court of Appeals, but that court has stymied the Obama administration before, blocking Obama’s executive actions on immigration in 2015.

In any case, the Labor Department could drop the appeal after Republican President-elect Donald Trump takes office in January.

In August, Trump told the website Circa that the overtime rule was an example of the type of burdensome business regulations he would seek to roll back as president, perhaps by exempting small businesses or delaying implementation.

Even if the rule survived the legal challenge, it could be upended by legislation passed by Congress or withdrawn by Trump's Department of Labor.

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U.S. Chamber of Commerce official Randy Johnson said in a statement that the rule would have been costly and disruptive to businesses.

But Ross Eisenbrey of the left-leaning Economic Policy Institute, which supported the rule, called the decision "extreme and unsupportable."

"It is also a disappointment to millions of workers who are forced to work long hours with no extra compensation, and is a blow to those Americans who care deeply about raising wages and lessening inequality," Eisenbrey said in a statement.

The case is Nevada v. U.S. Department of Labor, U.S. District Court for the Eastern District of Texas, No. 16-cv-731.

(Reporting by Daniel Wiessner and Robert Iafolla; Editing by Alexia Garamfalvi and Leslie Adler)

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Take Note of New Business Tax Deadlines in 2017

As a result of the highway funding extension bill signed into law by President Obama in 2015, there are important changes coming in 2017 to deadlines for business tax filings including:

1. W-2 and 1099 filings are due January 31 in 2017 instead of March 31. These forms are still due employees and contractors by January 31, so it’s important to prepare and file them early if possible.
   
   
2. S-corps, partnerships, LLPs and multi-member LLCs filing Form 1065 must file by March 15 or the 15th day of the third month following the end of the organization’s fiscal year. The previous deadline was April 15. Extensions are available for up to six months, filed no later than September 15, 2017.
   
   
3. C-corps filing Form 1120 must file by April 15 (previously March 15) or the 15th day of the fourth month following the end of the organization’s fiscal year. Extensions can be filed no later than September 15. After 2026, C corporation extensions will be available for up to six months after the initial due date.
   
   
4. Trust and Estate filing Form 1041 the extension due date has changed from September 15 to September 30.
   
   
5. Exempt organizations filing Form 990 now have only one extension until November 15.

If you have any questions about the above changes please do not hesitate to contact our office.

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Five Key Areas Every Business Owner Should Review Before Year End

We’re well in to the fourth quarter of the year, which means year end is fast approaching. Here are five important areas of your business to review before the calendar turns to 2017.

1. Tax planning opportunities. November and December are prime time for tax planning, which can pay big dividends when filing time arrives. Touch base with our firm now to reduce your business tax obligations as much as possible.
   
   
2. Payroll. Make sure you have all information updated, employees are properly classified, and that you are in compliance with all payroll regulations. Plus, you’ll want to ensure that all employee information is securely stored.
   
   
3. Cash flow. As you well know, cash flow is the lifeblood of your business, so if you’re having trouble controlling it, now is the time to analyze why and ask for assistance if needed.
   
   
4. Estimated tax payments. If you've paid estimated taxes throughout the year, review your totals so that you have the information on-hand for tax season and you can make up any shortfall before the end of the year.
   
   
5. Your overall progress. Take a step back and consider if you have met your annual projections for profitability and growth. If you’ve gotten off-track it’s time to make a plan to rectify the situation. If you’re satisfied with where you are, take time to lay out next year’s plan.

By reviewing these five areas now, you’ll be able to lower your taxes, reduce potential payroll-related penalties, and have a good handle on how to move your business forward in the coming year. If you need any help in the process, please contact our firm.

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Start Holiday Gift Giving for the Kids with an IRA Contribution

If you’re like many parents and grandparents, you may already be thinking about what kind of gift to get the children on your list this holiday season. For teens and young adults especially, it can be challenging to come up with truly unique and meaningful gifts. One idea with long-lasting impact is to make a contribution to either a traditional or Roth IRA on your children or grandchildren’s behalf.

IRS rules state that the maximum that can be contributed to an IRA each year is the lesser of the child’s earned income or $5,500 (the 2016 limit for an individual under age 50). So if your child or grandchild already has an IRA, you’ll need to know if they’ve already contributed to it this year.

If your child or grandchild does not have an IRA account already, you’ll need to decide on the type of IRA you would like to use for your gift (i.e. a traditional or Roth IRA). Traditional IRA contributions are tax deductible with taxes paid when the funds are withdrawn at retirement. Conversely, Roth IRA contributions are not tax deductible. However, the distributions, including earnings, are tax-free at retirement.

As long as your contribution to an IRA is below the annual $14,000 gifting exemption, it is not subject to any gift tax unless you give additional reportable gifts throughout the year. Keep in mind that such a contribution will not hold any benefits for you on your own income tax return.

If you have questions about an IRA holiday gift for your children or grandchildren, please contact our office.

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Don’t Let Year-End Cost-Cutting Derail Your Business Goals

Many businesses need to adjust their spending to meet the reality of their cash flow during the last few months of the year. While it can be tempting to just cut expenses across the board, this strategy may actually backfire if you cut in the wrong places. Here are four budget areas you should try to preserve to avoiding derailing your long-term business goals:

1. Marketing—It’s one of the easiest things to cut, but doing so will eliminate your ability to grow. The smarter strategy is to continue doing the marketing initiatives that bring you results so you don’t miss opportunities to gain new customers.

2. Training—Instead of eliminating employee education opportunities, look for cost-effective options such as online training or in-house peer-to-peer training to reinforce skills. Regular training is especially important for frontline employees who can make an immediate difference in maintaining and winning business.

3. Safety—Cutting your budget should not mean increasing the risk for workplace injuries or creating an unsafe work environment, which can expose your business to potential workers’ comp claims. Consider safety an “untouchable” area when it comes to budget cuts.

4. Quality—Another area where shortcuts should be avoided is your product and service quality. Reducing resources to the point that it affects your end product is not going to help drive more business—in fact, it may have a significant negative impact on sales.

If you keep these four key expense areas steady, how can you make up budget deficits? The best way is to look at all of your expenses, line by line, and identify unnecessary or hidden costs that can be eliminated. It’s also important to maintain an in-depth view of your financials throughout the year—not just when your budget is tight—so you can take proactive steps to avoid future cash crunches and keep to financial goals.

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Wondering About Tax Deductions for Political Contributions? Here’s the Lowdown

With election season in full swing, you may be wondering, “Are political contributions tax deductible?” Here’s the lowdown:

Whether it’s your county mayor or the future President of the United States, the rules on taking advantage of tax deductions for political contributions are the same: Donations are deductible if the organization you give to is a 501(c)(3) tax-exempt charity. This means that the organization you give to must have tax-exempt status, which is a special designation obtained from the IRS, in order for you to claim a tax deduction.

Many political organizations are automatically disqualified from this status. For example:

• Any donation to a political party, campaign, or action committee is non-deductible.
  
  
• Other non-deductible contributions are those to individual people, labor unions, business associations, for-profit schools, for-profit hospitals, foreign governments, and fees paid to associations or state or municipal governments.

Despite these rules, you can still reap the benefits of a tax deduction if you support 501(c)(3) tax-exempt political organizations that are non-partisan, in compliance with IRS guidelines on charitable contributions. Such organizations are allowed to communicate with politicians to ask them to make an issue a priority and educate them about why they should do so.

The bottom line: While you can’t make a tax-deductible donation directly to a candidate or campaign, you can make a tax-deductible donation to an organization that lobbies candidates about issues that are important to you. Just remember that in order to reap the benefits of a tax-deductible contribution, you’ll need to itemize the deductions on your tax return.

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Take Note! The Filing Deadline for W-2s and 1099s is January 31 in 2017

Consider this blog post as early notice that the date by which employers must file their W-2s and 1099s with the Social Security Administration (SSA) and IRS will change to January 31 in 2017.

Previously, W-2s and 1099s were not due to governmental agencies until March 31, so this new deadline will significantly reduce the window for making any necessary changes. These forms are still due to the recipient by January 31.

In order to meet the new deadline, it is important to keep your payroll and employee information as up to date as possible. Please keep in mind that if our firm will be filing your W-2 and 1099 forms, we will need your data in a timely manner in January. Additionally, if you are notified of any incorrect information contained on these forms, it will need to be corrected right away.

The new filing deadline for W-2s and 1099s represents a significant change and makes it imperative that payroll and employee information is accurate and up to date. If you have any questions about this information, please contact our office.

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The World is Chipping Away at Credit Card Fraud—But Individual Vigilance is Still Key

EMV chip technology, which is the first major upgrade for credit card fraud protection in many years, is slowly being rolled out by merchants around the world, including in the United States. While this technology has the potential to provide better security for your credit card data, it still has its limits and it is not completely hacker-proof or secure. As such it is still important to be vigilant about protecting your personal information and your credit card whenever you use it. A few key points to keep in mind:

• Double check the whereabouts of your credit card often. This may sound silly at first, but the instances of people forgetting their cards in credit card terminals and bank machines is actually increasing according to industry sources (partly because chip card processing takes a little longer), so try to remember to take your card back after leaving a store so that it doesn’t get stolen….and double check that your credit card is in your possession on a regular basis.
  
  
• Create account alerts. If someone does get unauthorized access to your credit card information, you’ll want to know asap. Most financial institutions and credit card companies have free text message and email notifications that can alert you to suspicious account activity so please, sign up!
  
  
• Take data breach notifications seriously. With so many stories in the news about retail data breaches, it’s easy to tune them out. However, according to AARP (American Association of Retired Persons) 1 in 5 data-breach victims suffered fraud in 2015, up from 1 in 7 in 2014. Clearly, this is a growing problem and you should take any news or notices of a breach where your card has been potentially compromised seriously and take the actions recommended by authorities to avoid losses.

Payment industry research shows that more than $16 billion was lost in worldwide credit card fraud in 2014 and 48 percent of the losses occurred here in the United States, making it more important than ever to keep tabs on your credit card and use the tips above to avoid having your credit card and other sensitive information compromised.

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IRS Warns of Robocalling Scammers

The Internal Revenue Service is seeing a big increase this summer in automated phone calls from con artists pretending to work for the IRS calling innocent taxpayers demanding overdue taxes.

The criminals leave urgent callback requests on voice mail telling taxpayers to call back to settle their “tax bill.” The bogus calls generally purport to be the last warning before the IRS takes legal action against unsuspecting taxpayers. When a victim calls back, the con artists threaten to arrest or deport the taxpayer or revoke their driver’s license if they don’t agree to pay up.

The scammers have increasingly been asking unsuspecting taxpayers to make the payment via iTunes gift cards and similar cards. The IRS pointed out that any request to settle a tax bill by using a gift card is a clear signal of a scam.

“It used to be that most of these bogus calls would come from a live-person,” said IRS Commissioner John Koskinen in a statement. “Scammers are evolving and using more and more automated calls in an effort to reach the largest number of victims possible. Taxpayers should remain alert for this summer surge of phone scams, and watch for clear warning signs as these scammers change tactics.”  

Reprinted from Accounting Today

by Michael Cohn

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Before the First School Bell Rings, It’s Time to Reset the Alarm Clock

It’s August and children and parents everywhere are facing a grim reality: back to school season is just around the corner. At this time of year, many parents struggle to get their kids back into a regular sleep routine. To help, we offer these tips to reset your family’s alarm clock before the first school bell rings:

1. Start tonight. While child health experts advocate keeping children on the same sleep schedule all year, the reality is that over the summer break many kids get up and go to bed later than usual. It generally takes three weeks to adjust to a new sleep routine, so start now.
   
   
2. Stay strong. Set regular waking and sleeping times, then stick to them. Most kids and teens need at least 10 hours of sleep a night, so take this into account as you establish your routine.
   
   
3. Eliminate evening electronics. While you may think that playing games on a phone or tablet is relaxing, it can actually stimulate children and disrupt bedtime routines. Establish a time when electronics must be put away each night and don’t allow them in bedrooms.
   
   
4. Set a good example. It’s harder for kids to stick to a routine if they see their parents doing otherwise. While you may not want to go to bed at 8 p.m., you can still set a good example by participating in a more low-key nighttime routine and not staying up until all hours.

Now is the time to start settling into a more school-friendly sleep routine. By making it a priority now, it’s more likely that everyone will be well-rested as the school year starts.

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Getting Married this Year? Here’s Your Tax Tip Sheet

While most couples go to great lengths to ensure that their wedding day is perfect, far fewer think about how their nuptials will impact their tax liability. The truth is, the moment you get married, no matter what time of the year it is, in the eyes of the government you are considered to have been married for the entire tax year. With this in mind, here are some tax tips to consider as you prepare to walk down the aisle:

• A prenuptial agreement may impact your filing status and complicate your tax filing, so you may wish to speak with a tax professional.
  
  
• Once you combine incomes, you and your spouse may be subject to a higher tax bracket. This may eliminate tax benefits for which you were previously eligible.
  
  
• If marriage involves a name change for either party, contact the Social Security Administration to advise them and to get your Social Security card and records updated. This helps avoid delays in the processing of your tax return or potential refund.
  
  
• Review your current withholding and estimated tax payments in light of your new marital status. This will help you avoid any unexpected tax bills next tax season.
  
  
• The Affordable Care Act (ACA) may complicate your tax filing if you and/or your new spouse purchased health insurance through the ACA marketplace because any premium tax credits you have received may be impacted.
  
  
• If your new spouse owes child support or back taxes to either the IRS or the state, they may become your obligation unless you complete the IRS’ injured spouse allocation form.

Don’t let tax stress put a damper on your big day. Take a few moments to talk about taxes with your partner before your wedding, or schedule some time to consult with one of our professionals after the honeymoon.

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Key Lessons from the Financial Fallout of the ‘Brexit’ Vote

It’s fair to say that the recent ‘Brexit’ vote by Britons to exit the European Union (EU) has shaken global financial markets to their core, at least in the short-term. Financial analysts say that it’s too early to tell what the long-term impact of this historic vote will be. But one thing is for certain, the Brexit offers several important lessons that individual investors and business owners can take to heart as they review their own situation at mid-year.

1. Prepare for the unexpected. One of the reasons why the Brexit vote has people and the financial markets so on edge is that it was unexpected. No one really thought that the ‘Leave’ camp would actually win the referendum. Well, they did…and no one is prepared to handle the situation. This is not a pattern that you want to repeat with your own finances. If you do nothing else, plan ahead for unexpected shifts such as job losses or your child not getting a full-ride scholarship for college.
   
   
2. Take a long-term view. Many experts agree that the Brexit is going to create some short-term financial pain. However, things are likely to stabilize and, hopefully, improve over time. This is an important tenet for any investor or business owner to follow for their own financial sanity and planning. Working with a financial professional who can offer guidance and an objective perspective based on their experience and market data can be invaluable in this regard.
   
   
3. Seek the support of allies. In the days immediately after the Brexit vote, Britain no doubt felt somewhat ostracized by the rest of the EU. However, once the initial shock wore off, it rallied the support of its usual allies to determine what the next steps would be in the process. The parallel for individuals and businesses: having a financial advisor in your corner can help you work through difficult decisions and challenging circumstances to find the best solutions.

It is likely to be years before we know how the Brexit will affect the financial strength of our domestic and world markets. This makes it more important than ever to keep the above tips in mind, and to consider doing some proactive mid-year planning to protect your own individual and business finances this year, and in the years to come. Need help with your mid-year planning? Contact our firm today, we look forward to assisting you.

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Smart Strategies to Handle the “Downfall” Problem 1 in 4 New Businesses Experience

One of the most (if not the most) important indicators of business health is its cash flow. Even if your business is profitable and growing, if you don't have a consistent stream of cash coming in, you'll run into financial trouble. Lack of cash flow is the primary reason that more than one quarter of new businesses fail—29 percent to be exact. Here are some smart strategies that can help ease the cash flow crunch.

1. Reduce your business overhead. While this may seem obvious, trimming fixed costs is something that many business owners overlook, getting stuck in a this-is-how-we've-always-done things rut. Take a fresh look at your operations with the goal of maximizing efficiency.
   
   
2. Be proactive about securing credit. If you wait until you're financially strapped before you line up credit sources, you may be in for an unpleasant surprise (e.g., you can't get the credit you thought you could or the credit you can get is too expensive). Know how you can secure funding before you need it.
   
   
3. Know your numbers. This is so important—you should have a dashboard of key performance indicators that you follow closely so that you can head-off any cash flow issues before they happen. You can use a DIY approach with business accounting software, or work with our firm to keep you on track.
   
   
4. Encourage quick payments. An essential key to cash flow management is to keep the cash coming in from customers. Aside from keeping your invoicing current, consider incentives such as early payment discounts on large invoices or discounts for cash payments when appropriate.

With the stakes so high in today’s economy, it's not surprising that many new businesses struggle with cash flow issues. However, by implementing the strategies above and working with our professional team, you'll have a better chance to keep the cash coming in and your business going strong.

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IRS Fights Scammers – Instructs Staff to Initiate All Future Audits by Mail; Never by Telephone

With a rise in IRS phone scams, the Agency changed its policy on contacting taxpayers whose tax records are subject to an audit. The new policy instructs IRS agents to contact affected taxpayers only by mail—never by phone (which used to be the IRS’ go-to method of contact). As such, we urge all of our clients to adhere to the following guidelines should you receive a call from someone claiming to be from the IRS and you’ve NOT received a contact letter prior:

• If you receive a phone call that you suspect to be a scam, hang up right away. If you receive multiple calls, try to record them and turn the recordings and any other related information that you have over to the IRS and local law enforcement.
  
  
• If you receive emails claiming that the sender is from the IRS, save the emails, do NOT click on any links or open files contained within the email, and forward these emails to the IRS at: phishing@irs.gov.
  
  
• Never share your personal information over the phone or by email with someone claiming to be from the IRS. The IRS will never e-mail or call you to ask for this type of information or to ask you to send money right away.
  
  
• Protect your personal information. Any type of documentation that contains your sensitive data is a treasure trove for tax thieves and identity scammers. Keep documents containing your Social Security Number, bank account numbers, and other sensitive information in a secure location. Electronic forms should be stored on a password-protected or encrypted external drive or disk.

If you have any questions about the risks related to tax and financial scams, please contact our office.

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No Time to Garden? Try These Time-Saving Tips

While many of us appreciate the glory of a beautiful garden, there’s no denying that having one is a time-consuming endeavor. That’s why we’ve compiled these tips to help you make the most of your yard in less time:

1. Start with a plan.
A well-thought-out plan for your garden that utilizes low-maintenance plants and flowers will save you time throughout the season. You can even map out what you are going to plant while you’re watching Netflix!

2. Take out weeds with ease.
When low-growing weeds grow into a mat, don’t spend time taking them out one at a time. Instead, use a sharp spade to slice beneath them and turn them over to bury the leaves, which will decompose, enriching your soil.

3. Water without wasting time.
Don’t spend time filling a watering can—use soaker hoses instead! Set the pressure on low to slowly irrigate sections of your garden while you do something else.

4. Garden-on-the-go.
Make every minute you are outside of your home count! Use the time when you let your dog out or your kids are waiting for the bus to pull a few weeds or dead-head flowers. This will cut what could be a long weeding and maintenance session on the weekend into more manageable mini-sessions throughout the week.

Whether you have a green thumb or not, use these tips and you’ll have more time to enjoy a beautiful yard—and the other things you like to do.

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Overtime Pay Eligibility Expanded – What Businesses Need to Know

President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the Labor Department to revise federal rules on overtime pay for salaried workers that log more than 40 hours a week. The long-awaited rule change will extend overtime pay to an estimated 4.2M workers.

Under current federal regulations, only salaried employees who make no more than $455 a week, or $23,660 a year, are guaranteed to receive overtime after working more than 40 hours a week. The new rules would raise that threshold to $913 a week, or $47,476 a year, giving salaried workers who are higher up the income scale the ability to work less or earn more for long hours.

The ruling also establishes a mechanism for automatically updating the salary and compensation levels every three years.

You can find detailed information on this new ruling on the United States Department of Labor website: https://www.dol.gov/whd/overtime/final2016/index.htm

Please feel free to contact our office if you have questions.

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Sleep on This! Think Quality Not Quantity When It Comes to Shut-Eye

We’ve likely all heard the news—Americans are incredibly sleep-deprived. However, according to recent research, achieving better quality sleep may be more important than actually increasing the number of hours of sleep. In fact, experts report that 6 hours of deep refreshing sleep is more beneficial than 8 hours of light interrupted sleep.

May is Better Sleep Month, so with that in mind, consider the following ways you can improve the quality of your sleep and reap the benefits of improved health and productivity:

• Establish a consistent sleep schedule by sleeping at the same time each day of the week (including weekends).
• Before bed, relax and limit any stimulating activities such as exercise and work.
• Avoid alcohol, nicotine and caffeine close to bed time, as they can disrupt sleep.
• Make the area where you sleep dark, well-ventilated, and at a comfortable temperature.
• Remove any distractions such as computers, mobile devices and televisions from your bedroom.

The key to better sleep is to create an environment that supports these habits. It may take a few weeks to do so, but the effort is worth it!

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We're Hiring!

Do you believe that accountants should be more than tax preparers? Do you want to build a partnership with business owners? Help them grow their businesses and attain their goals? We Do!

We are looking for an accountant who shares our vision and passion for helping businesses; an accountant who wants to work with a team who has been nationally recognized for their progressive approach to collaborating with business owners. 

If you’re that person, we have a full time, year round position for you!

Responsibilities include the following:

 * Write up of entity's books through the trial balance

 * Preparation of corporate, partnership and individual tax returns.

 * Providing guidance and insight to business owners

 * Contribute and collaborate positively within our team.

Qualifications:

 * Minimum of 3 years of public accounting experience.

 * Solid communication and technical skills.

 * Strong computer skills and experience in QuickBooks and QuickBooks Online.

 * Experience in Thomson Reuters' suite of software a plus.

We offer an interesting and challenging work environment and the opportunity for personal and professional growth. We understand and promote the importance of balancing professional and personal lives.

We offer: competitive salary, great benefits and flexible scheduling opportunities.

Please submit the following for consideration to info@atlanticpayroll.com:

1. Resume

2. References

3. Salary requirements

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Be $1,000 Richer by Next Year with These Simple Savings Strategies

Wow! May is already here—and if you’re like many Americans your savings account balance is still stuck where it was at the beginning of the year. So what to do? You can’t make up for lost savings opportunities…or can you? We believe that you can with a little bit of discipline. For example, saving $125 a month can be as easy as:

• Renegotiating your mobile phone, cable and other subscriptions.
• Reducing the number of takeout meals you consume.
• Relying on yourself to clean your home or mow the lawn instead of paying for third-party services.

Try these and a few more simple tips for saving serious dollars over the course of the next eight months and you can easily save at least $1,000—which you can deposit directly into your savings account for a kick start to your 2017 financial goals.

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5 Actions to Reduce Cyber Liability Risks in Your Business Today

A quick glance at the news is all it takes to realize that the threat of cyber attacks is increasing for businesses. So how can your business beat the odds and avoid becoming another victim of cybercrime? Try putting the following five action items at the top of your priority list:

1. Encrypt your data. Whether it's bank routing digits, credit card accounts or employee social security numbers, company-held information is what hackers use to steal money, so make sure it is adequately encrypted.
   
   
2. Secure your hardware. Obviously, cyber criminals use the internet to steal information, but others may actually try to steal physical hardware as well. To prevent this, make sure your business has a security system and physically lock down your computers (to desks) and servers (behind controlled-access doors) to make it harder to remove them from your premises.
   
   
3. Secure your network. Unlocked Wi-Fi networks are like an open door to your company’s data. One solution is not to have Wi-Fi at all at your company. The more practical solution may be to disable the service set identifier (SSID) broadcasting function on the wireless router. This creates a cloaked or hidden network, invisible to casual Wi-Fi snoops and accessible only to users with the exact network name.
   
   
4. Install anti-malware and anti-virus protection. Email phishing and apps that access social media accounts are popping up with increasing regularity. Loading anti-malware and anti-virus protection on your computers and mobile devices can help protect your business. In addition, keeping programs and hardware updated is key.
   
   
5. Educate your employees. If just one computer on your network becomes compromised, your entire operation is at risk. Employees are your first line of defense, so make sure you educate them about what to look for and what to avoid (a formal internet policy can help) to keep your business secure.

The risk businesses face from cybercrimes is greater than ever. Implementing these tips will help you mitigate risk and ensure that your company avoids a potentially devastating data breach or other malicious acts, which can compromise both security and business viability.

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Don’t be Fooled; IRS Scams Continue to Pose Serious Threat

The Internal Revenue Service has some advice for taxpayers this April Fool’s Day that  may prevent them from being the victim of a tax scam: Don’t be fooled by scammers. Stay safe and be informed. Here are some of the most recent IRS-related scams to be on the lookout for:

Telephone Scams. Aggressive and threatening phone calls by criminals impersonating IRS agents remain an ongoing threat. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation, license revocation and more. These con artists often demand payment of back taxes on a prepaid debit card or by immediate wire transfer. Be alert to con artists impersonating IRS agents and demanding payment.

Note that the IRS will never:

• Call to demand immediate payment over the phone or call about taxes owed without first having mailed you a bill.
• Threaten to immediately bring in local police or other law enforcement groups to have you arrested for not paying.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit or debit card numbers over the phone or threaten to bring in local police or other law enforcement groups to have you arrested for not paying.

Scammers Change Tactics. The IRS is receiving new reports of scammers calling under the guise of verifying tax return information over the phone. The latest variation on this scam uses the current tax filing season as a hook. Scam artists call saying they are from the IRS and have received your tax return, and they just need to verify a few details to process it. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.

Tax Refund Scam Artists Posing as TAP. In this new email scam targeting taxpayers, people are receiving emails that appear to come from the Taxpayer Advocacy Panel, a volunteer board that advises the IRS on issues affecting taxpayers. They try to trick you into providing personal and financial information. Do not respond or click the links in these emails. If you receive an email that appears to be from TAP regarding your personal tax information, forward it tophishing@irs.gov.

E-mail, Phishing and Malware Schemes. The IRS has seen an approximate 400 percent surge in phishing and malware incidents so far in the 2016 tax season.

The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. Emails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

Variations of these scams can be seen via text messages, and the communications are being reported in every section of the country.

When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information, which could be used to help file false tax returns. The sites also may carry malware, which can infect your computer and allow criminals to access your files or track your keystrokes to gain information.

If you get a ‘phishing’ email, the IRS offers this advice:

• Don’t reply to the message.
• Don’t give out your personal or financial information.
• Forward the email to phishing@irs.gov. Then delete it.
• Don’t open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov.

Reprinted from IRS Tax Tip 2016-05

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Final Check – Did You Claim Every Eligible Tax Deduction?

Every year, American taxpayers leave millions of dollars on the table for Uncle Sam—in the form of unclaimed tax deductions. With Tax Day just around the corner, it’s time to do one final check to make sure that you are not missing out on three of the most common deductions:

• Retirement contribution deductions for single-income couples and the self-employed. It’s not too late to open an IRA account and make a contribution for a non-working spouse or yourself if you’re self-employed to gain an additional tax deduction—plus some additional retirement funding. Simply do it before the tax deadline and keep in mind the maximum annual contribution is $5,500 per person, or $6,500 for people 50 and older.
  
  
• Sales taxes on big ticket items. Tax law allows individuals to deduct the larger of the amount paid in either state income tax or sales tax. While you should check the specific rules for your state, it’s worth checking this potential deduction out, especially if you made a major purchase such as a new car, truck or boat in 2015.
  
  
• Deductions for charitable contributions. Many people contribute to charities throughout the year and incur out-of-pocket expenses. This includes clothing donated to a local shelter or miles driven (14 cents per mile deduction) while volunteering for a charity. Just remember you need a receipt for any contribution over $250.

If you have yet to file your taxes, consider asking your tax professional if you qualify for any of these deductions and take that hard-earned money off the table so you can put it back in your pocket!

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Five Snacks to Spring Clean your Body and Mind

Spring is here and the season for new beginnings. This is a good time to re-think "spring cleaning" and choose snacks that can cleanse our bodies from the inside out.

These five snacks are guaranteed to feed your mind, detoxify your body, and satisfy your palate!

1. Guacamole - High in fiber and “fat” but don’t worry, it’s good fat! Spread it on toast or eat it with veggies. This fruit is not only delicious but contains a ton of antioxidants and glutathione, a nutrient that can block up to 30 carcinogens and detoxify your liver.

2. Kale chips - Kale is king. It’s loaded with antioxidants, vitamins, and minerals and boosts metabolism while providing cancer fighting compounds. Baked Kale chips satisfy the “crunch” we all crave and taste delicious.

3. Raw almonds - Almonds are the perfect grab–and-go snack. Almonds are rich in vitamins and minerals such as magnesium, which helps break down glucose into energy.

4. Greek yogurt - Greek yogurt has fewer carbohydrates and sugar while boasting more protein than other yogurt. It’s a great source of vitamin B12 and potassium, which helps to decrease blood pressure and muscle cramps while increasing energy. Try plain yogurt and add your own fruit or a drizzle of honey.

5. Dark chocolate - Sometimes chocolate is the only thing that will satisfy your craving, so you might as well give in. Dark chocolate is one of the best sources of antioxidants on the planet, plus it has half the sugar and four times the fiber of milk chocolate. Choose 70 percent cocoa content or higher for optimal antioxidant benefits.

Whichever of these snacks you choose, planning ahead is the key to success. Make time to pack your snacks in portion-controlled containers and bring them with you so that when hunger strikes, you aren’t left having a face-off with the vending machine.

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Make Your Spring Break Worry-Free with These Home Security Tips

If you’re packing your bags for a spring break getaway, take a little time before you leave to implement the tips below—they’ll help keep your home safer while you’re gone, and free your mind of worry so that you can truly enjoy your trip.

1. Tell your neighbors that you will be away. Inform your neighbors and friends of the dates that you will be gone and ask them to keep an eye out for any suspicious activity around your home.
   
   
2. Clean up the kitchen. Dispose of any food that will spoil and take out the garbage and recycling. Any food left in the trash or even the sink can rot and may even attract unwanted, four-legged animal or insect scavengers into your home.
   
   
3. Turn off the water. If you live in an area of the country where your pipes might freeze, or if you’re concerned about a plumbing leak occurring while you’re gone, it’s a good idea to turn off the water while you are away so you can avoid a potential indoor flood.
   
   
4. Invest in simple security measures. These easy and inexpensive security tips can make your home more secure: install a light switch timer that can turn your house lights on and off on a schedule; park a car in your driveway to make it look like you’re home; make sure all windows and doors are locked before you go; and just to be safe, put valuables away out of plain sight.

Spring break should be a time to get away and relax, not to be worrying about your home. With these tips, you’ll be able to reduce your risk of theft or damage occurring at your residence, and have peace of mind as you travel.

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Tax Season is Scam Season... Keep Your Information Safe!

The IRS has joined with industry and states on a public awareness campaign to provide taxpayers with easy tips to better protect themselves. For some quick tips, you can watch an informative video here.

Tax-related identity theft occurs when someone uses your stolen Social Security Number to file a tax return claiming a fraudulent refund. To prevent becoming another victim of identity theft, the IRS has compiled the following tips to help keep you safe:

1. Don't carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
2. Don't give a business your SSN or ITIN just because someone asks. Give it only when required.
3. Monitor your financial information regularly, including your credit report. You can get a free report yearly at annualcreditreport.com, and several financial services now offer free monitoring at any time.
4. Review your Social Security Administration earnings statement annually.
5. Secure any personal information kept in your home.
6. Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
7. Don't give personal information over the phone, through the mail, or via the Internet unless you have initiated the contact or you know who you are dealing with.

If you have any questions about the security of your tax information, please contact our firm.

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Identity Protection PIN Letters List Incorrect Tax Year

According to a recent IRS notice, due to an error, taxpayers are receiving Identity Protection (IP) PIN letters with an incorrect year listed. If you received the CP01A Notice dated January 4, 2016, be aware that the PIN contained in it is valid for use on all individual tax returns filed in 2016.

The IRS notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return.

If you have any questions, please contact our office.

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IRS Warns of Massive Telephone Fraud Scam

The Treasury Inspector General for Tax Administration is urging taxpayers and practitioners to be on “high alert” about a massive telephone fraud scam being committed by criminals impersonating Internal Revenue Service employees

TIGTA also announced additional outreach efforts to prevent taxpayers from falling victim to criminals who pretend to be IRS and Treasury employees this filing season.

“The phone fraud scam has become an epidemic, robbing taxpayers of millions of dollars of their money,” said TIGTA Inspector General J. Russell George in a statement. “We are making progress in our investigation of this scam, resulting in the successful prosecution of some individuals associated with it over the past year.”

He noted that over the summer, a ringleader in the scam was sentenced to more than 14 years in federal prison. “However, this is still a matter of high investigative priority,” said George.

TIGTA said it continues to receive reports of thousands of contacts every month in which individuals fraudulently claiming to be IRS officials make unsolicited calls and “robocalls” to taxpayers and demanding that they send them cash, he said.

“As the tax filing season begins, it is critical that all taxpayers continue to be wary of unsolicited telephone calls and e-mails from individuals claiming to be IRS and Treasury employees,” said George. “This scam has proven to be the largest of its kind that we have ever seen. The callers are aggressive and relentless. Once they have your attention, they will say anything to con you out of your hard-earned cash. We will be very aggressive in pursuing those perpetrating this fraud. In the meantime, we need to do even more to warn taxpayers not to fall for it.”

TIGTA’s expanded outreach initiative includes video Public Service Announcements in English and in Spanish that warn taxpayers about the scam. In addition, TIGTA is working with its partners in the public and private sector to help get the word out, both through traditional law enforcement channels and through direct outreach to associations, nongovernmental organizations, and the media.

TIGTA said it has received reports of roughly 896,000 contacts since October 2013 and has become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam, in which criminals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they send them cash via prepaid debit cards, money orders or wire transfers from their banks.

"The number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is growing at an alarming rate," said George. "At all times, especially around the time of the tax filing season, we want to make sure that taxpayers are alerted to this scam so they are not harmed by these criminals. Do not become a victim. This is a crime of opportunity, so the best thing you can do to protect yourself is to take away the opportunity. If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you do not pay immediately, that is a sign that it is not the IRS calling, and your cue to hang up. Again, do not engage with these callers. If they call you, hang up the telephone.”

George said the scam has hit taxpayers in every state. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card, money order or a wire transfer. The scammers threaten those who refuse to pay with being charged for a criminal violation, a grand jury indictment, immediate arrest, deportation or loss of a business or driver’s license.

The IRS generally first contacts people by mail, not by phone, about unpaid taxes, TIGTA pointed out. The IRS will not ask for payment using a prepaid debit card, a money order or wire a transfer. The IRS also will not ask for a credit card number over the phone.

The callers who commit this fraud often utilize an automated robocall machine. They frequently use common names and fake IRS badge numbers. The scammers may know the last four digits of the victim’s Social Security Number. They often make caller ID information appear as if the IRS is calling; aggressively demand immediate payment to avoid being criminally charged or arrested.

Scammers may threaten taxpayers that hanging up the telephone will cause the immediate issuance of an arrest warrant for unpaid taxes. They may send bogus IRS e-mails to support their scam. They may also call a second or third time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.

If taxpayers get a call from someone claiming to be with the IRS asking for a payment, here’s what to do. If they owe federal taxes, or think they might owe taxes, they should hang up and call the IRS at 800-829-1040. IRS workers can help answer payment questions.

If they do not owe taxes, they should fill out the “IRS Impersonation scam” form on TIGTA’s website,https://www.treasury.gov/tigta/, or call TIGTA at (800) 366-4484.

They can also file a complaint with the Federal Trade Commission at www.FTC.gov.  Add “IRS Telephone Scam" to the comments in the complaint.

TIGTA is encouraging taxpayers to be alert to phone and e-mail scams that use the IRS name. It stressed that the IRS will never request personal or financial information by e-mail, text, or any social media. They should forward scam e-mails to phishing@irs.gov.  But they should not open any attachments or click on any links in those e-mails.

Reprinted from Accounting Today

By Michael Cohn

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Getting Over It… Quick Tips for Beating the Post-Holiday Slump

It’s a stark reality that millions of us face once the holiday season is over: the post-holiday slump. Even just a few days off can make coming back to the office seem excruciating—there’s all that work to do, the anticipation and cheer of the holidays are gone, and for many people the next vacation day is a long way off. Yes, being a working adult is tough, but getting over the post-holiday slump doesn’t have to be with these tips:

Keep the special treats coming. There’s no reason to go cold-turkey on self-kindness just because the holidays are over. Why not savor a festive mug of hot cocoa instead of coffee at your desk? Or bring that nice hand cream you received as a gift to the office and use it when you need a little pampering during the workday.

Flex your schedule, if possible. You know when you’re most productive and energized at work… so try not to fight your natural rhythm. If you’re not as perky first thing in the morning, see if you can start your workday a little later and rejuvenate with some extra sleep. If you like to get things going early, take advantage of this energy and get a head start, then leave a little earlier if you can.

Lighten your load a bit. The start of the new year often means a renewed sense of urgency to get things done. To avoid feeling completely overwhelmed and cranky, try to pace your schedule so that you have time to breathe and get things done as opposed to running from one meeting to the next.

Get on with your goals. If you find it hard to resume the regular routine after the holidays, try to respect your feelings while avoiding getting mired down in self pity. You may find that reevaluating your professional goals can be quite energizing. Break down your objectives into manageable tasks and, “Just do it!” Sometimes getting started is difficult, but once you have momentum you’ll recapture your pre-holiday mojo.

Transitioning back to post-holiday can be tough, but as we all know, all good things must come to an end. So be kind to yourself—and your co-workers—ease back into your regular workdays and tackle the goals that will make 2016 one to remember!

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Customer Service Goes Social—Is Your Business Prepared?

If your business engages in social media, you may have noticed an uptick in the number of customers who are posting questions on your Facebook page, tweeting comments or engaging with your company on other social platforms looking for customer service support. It’s a trend that is affecting just about every type of business—and using social media as a customer service channel will continue to grow in the future. So prepare your company to handle social customer service effectively with these tips:

1. The number one way to preserve your company’s reputation in the social sphere (and beyond) is to continually monitor your social media channels so that you can respond swiftly to questions and comments—especially the negative ones.
   
   
2. Create a Frequently Asked Questions (FAQ) section on your company’s website and link to it in your social media profiles (i.e. the “About” area that is available on many social platforms). This will provide an easy way to for customers to “self serve” and for you and your staff to refer customers to “standard” information when needed.
   
   
3. When it comes to negative comments (and you are likely to receive them no matter how great your business is), no matter how you feel about the complaint, you need to respond publicly, professionally, and immediately. Your objective should be to try to diffuse the situation by acknowledging the customer’s feelings and then to encourage a resolution in private by asking the customer to direct message or email you. Don’t engage in a debate on social media…that will only hurt your business.

Just like in other customer service scenarios, consistency and professionalism are key when you're using social media for customer service. Keep this in mind as you prepare yourself and your team to implement the tips above and master social customer service!

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IMPORTANT CHANGES TO THE MASSACHUSETTS MINIMUM WAGE

IMPORTANT CHANGES TO THE MASSACHUSETTS MINIMUM WAGE
In accordance with An Act Restoring the Minimum Wage and Providing Unemployment Insurance Reforms Chapter 144 of the Acts of 2014

Effective January 1, 2016:

• Minimum Wage shall be $10.00 per hour

The minimum wage law applies to all employees except those being rehabilitated or trained in charitable, educational, or religious institutions; members of religious orders; agricultural, floricultural, and horticultural workers; those in professional service; and outside salespersons not reporting to or visiting their office daily. See M.G.L. chapter 151, §§1 and 2. For further information regarding the Massachusetts state minimum wage, contact the Massachusetts Department of Labor Standards at (617) 626-6952 or visit www.mass.gov/dols.

In no case shall the Massachusetts minimum wage rate be less than $0.50 higher than the effective federal minimum rate.

• Service Rate shall be $3.35 per hour

Wait staff, service employees and service bartenders may be paid the service rate if they regularly receive tips of more than $20 a month, and if their average hourly tips, when added to the service rate, are equal to or exceed the basic minimum wage($10.00 per hour). See M.G.L. chapter 151, §7.

Effective January 1, 2017:

• Minimum Wage shall be $11.00 per hour
• Service Rate shall be $3.75 per hour (provided service employee receives tips of more than $20 per month and if his/her average hourly tips, when added to the service rate, equals $11.00 per hour).

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Christmas and New Year Schedules

Re: Christmas and New Year Schedules

Due to banking regulations and the upcoming holidays, we are unable to process your payroll checks in our normal timeframe.

As a result of these banking regulations and in order to process your payroll in the timeframe provided, we will need your payroll information by 3:00 on Monday December 21, 2015 and as well as on Monday, December 28, 2015.

We will be unable to process any direct deposits or ensure on-time paycheck deliveries, if your payroll is received after the cut-off time. We are sorry for any inconvenience this causes.

For other arrangements, please contact our office at (508) 896-3377.

The office will be closing at noon on Thursday, December 24th, and all day Friday, December 25th. We will also be closed on Friday, January 1, 2015.

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IRS Simplifies Filing and Recordkeeping for Small Business – Hooray!

In an ongoing effort to keep you informed of IRS changes, we have a new and important one to report. And this time, the change eases your filing burden.

Within the last month, the IRS significantly simplified the paperwork and recordkeeping requirements for small business by raising the safe harbor threshold for deducting certain capital items from $500 to $2,500. This applies to money spent to acquire, produce, or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.

For more detail on this new change, please read the full IRS article here.

And, as always, contact our firm if you have questions. We are here to help!

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MassTaxConnect is now live

Yesterday, the DOR officially launched its newest online portal for filing and paying business taxes in the Commonwealth: MassTaxConnect. MassTaxConnect has replaced WebFile for Business, offering all the benefits the old system offered, along with a host of new functionalities that will make paying and filing taxes in Massachusetts easier, simpler, and more efficient than ever before.

Users can access MassTaxConnect at the following URL:
mass.gov/masstaxconnect

Same username and password!
As someone who has filed or paid taxes online with us in the past, you’ll be able to immediately log-in to MassTaxConnect using your WebFile for Business username and password.

Identity verification!
The first time you log on to MassTaxConnect from a new computer, you will be asked for an authentication code as an additional security measure. Request the code in the pop-up window and enter it on the login page. Be sure to click “trust this computer,” and you’ll only have to do this once for any given computer.

MassTaxConnect Resources!
To help make the transition to the new system as smooth and seamless as possible, we’ve redesigned our MassTaxConnect informational page with an arsenal of resources at your disposal. This includes tutorials, FAQs, and DOR contact information if the site does not adequately answer your questions.

Video Tutorials!
Perhaps most importantly, DOR has put together a series of mini-video tutorials that show you step-by-step how to complete the following tasks in MassTaxConnect:
Log-in as an existing WfB user
Log-in as a new user (non-WfB users)
Add, access, and manage your accounts
File a return
Pay a bill
View and file and amended return
Authorize a 3rd party to manage your account
Request 3rd party access to an account
Send an e-message, including with an attachment
Update my address or my contact information?
File a dispute of audit or penalty (abatement request)
Access DOR letters and notices
Get on a payment plan for money I owe

Account ID
Once you’re in the system, you’ll notice that you have a new alphanumeric account identification number. This will replace federal employer identification numbers and other personally identifiable information. Doing so will enhance the security of our system and protect your identity from fraudsters. Take note: You’ll also soon be receiving a letter in the mail with your new account ID.

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Thanksgiving Holiday Hours

Our office will  close at noon on Wednesday November 25th  for the Thanksgiving Holiday and will re-open on Monday November 30, 2015 at 9:00 am.

We wish you a happy and safe thanksgiving!

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The Key to Scoring on Black Friday? Create a Pre-Game Plan

The countdown is on to the what retailers hype as the best shopping day of the year—the day after Thanksgiving dubbed by Americans as ‘Black Friday’—represents the kick-off to the holiday shopping season. However, given the explosion of retail competition and the Internet in the past several years, Black Friday is really not what it used to be. And if you’re not careful, you can end up spending more than what you planned on poor quality merchandise.

The key to scoring real deals is to go into the holiday shopping season with a pre-game plan. Retail analysts offer this advice: Do the homework by researching deals and create a game plan in advance. In addition to the copious number of direct mail and email offers you’re likely receiving now, don’t forget to checkout social media for exclusive deals as well. Then make a list of the absolute best deals on the items that you need to check off your holiday gift, décor, and entertaining lists.

The bottom line is that while you can certainly find some great deals on Black Friday, you need to be aware that much of the advertising is just hype—so don’t let it overtake your logic when it comes to your spending. Set a Black Friday budget prior to heading out to the stores or to your favorite retail websites, stick to your list, and take a moment to think through your purchases before making them—but by all means, take the opportunity to score some big savings if given the opportunity!

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It’s Tax Planning Time—Here Are Some Money-Saving Tips for Individuals and Businesses

With just a few short weeks to go before the end of the year, it’s important to take a look at your tax situation and consider ways to decrease your tax obligations. In other words, it’s time for tax planning. We put together the following tips for you to support smart tax decisions:

1. Stay apprised of potential tax provision extensions. Congress still has time to extend some popular tax provisions before the end of 2015, so keep an eye out for news on provisions including (but not limited to): taxpayers 70.5 years and up can make tax-free charitable contributions, businesses can deduct half of eligible equipment placed in service, and more!
   
   
2. Track the time you spend on business activities. Business owners may be exempt from the 3.8 percent Medicare tax on business income if you are active enough in the business to avoid being a “passive investor.”
   
   
3. Keep on top of information reporting. Make sure you complete your mandatory reporting on time this year to avoid potentially large penalties.
   
   
4. Make good on your state and local tax obligations. Remember that State and local governments impose their own filing and payment responsibilities with income, sales, and property taxes to avoid added penalties.
   
   
5. Accelerate deductions and defer income. When it comes to taxes, you want to accelerate deductions and defer income. How? Consider deferring bonuses, consulting or self-employment income; also consider accelerating state and local income taxes, interest payments, and real estate taxes.
   
   
6. Do you anticipate a tax shortfall? Take care of it with increased withholding. Check your withholding and estimated tax payments now while you still have time to fix the issue. If you face an underpayment penalty, you can eliminate the shortfall by increasing withholding on your salary or bonuses.

Our firm can help you take an in-depth look at your current tax position, explain how changes to the tax code will affect you and your business, and help you implement strategies to reduce your tax bill. Contact us today so you can benefit from advance planning this coming tax season.

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Inspector General Warns of Continuing IRS Impersonation Scam

The Treasury Inspector General for Tax Administration issued a warning,  that taxpayers should continue to beware of  fraudulent phone calls by individuals misrepresenting themselves as Internal Revenue Service employees.

TIGTA noted that it continues to receive reports of thousands of contacts every month in which individuals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they send them cash via prepaid debit cards, he said.

“Even after the tax filing season has ended, it is critical that all taxpayers continue to be wary of unsolicited telephone calls from individuals claiming to be IRS employees,” J. Russell George said. "This scam has proven to be the largest of its kind that we have ever seen. The callers are aggressive, they are relentless and they are ruthless. Once they have your attention, they will say anything to con you out of your hard-earned cash.”

TIGTA has received reports of approximately 736,000 contacts since October 2013 and has become aware of approximately 4,550 victims who have collectively paid over $23 million as a result of the scam, in which criminals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they send them cash via prepaid debit cards.

“The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming,” said George. “At all times, and even after the tax filing season, we want to make sure that innocent taxpayers are alerted to this scam so they are not harmed by these criminals,” he said, adding, “Do not become a victim.”

“This is a crime of opportunity, so the best thing you can do to protect yourself is to take away the opportunity,” he added. “If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you do not pay immediately, that is a sign that it is not the IRS calling, and your cue to hang up. Again, do not engage with these callers. If they call you, hang up the telephone.”

George noted that the scam has hit taxpayers in every state in the country. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. The scammers threaten those who refuse to pay with being charged for a criminal violation, immediate arrest, deportation or loss of a business or driver’s license.

TIGTA is taking steps to raise consumer awareness to this harmful scam, partnering with the Federal Trade Commission, the Veteran’s Administration and private sector companies to distribute messages that warn people about the scam with a series of “Alerts.”

TIGTA pointed out that the IRS generally first contacts people by mail—not by phone—about unpaid taxes and the IRS will not ask for payment using a prepaid debit card or wire transfer. The IRS also will not ask for a credit card number over the phone.

The callers who commit this fraud often:
•    Employ an automated robocall machine.
•    Use common names and fake IRS badge numbers.
•    May know the last four digits of the victim’s Social Security Number.
•    Make caller ID information appear as if the IRS is calling.
•    Send bogus IRS e-mails to support their scam.
•    Call a second or third time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.

If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do: If you owe federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.

•    If you do not owe taxes, fill out the “IRS Impersonation scam” form on TIGTA’s website, www.treasury.gov/tigta, or call TIGTA at 800-366-4484.

•    You can also file a complaint with the Federal Trade Commission at www.FTC.gov. Add “IRS Telephone Scam" to the comments in your complaint.

TIGTA encourages taxpayers to be alert for phone and e-mail scams that use the IRS name.  The IRS will never request personal or financial information by e-mail, text, or any social media.  You should forward scam e-mails tophishing@irs.gov.  Do not open any attachments or click on any links in those e-mails.

Taxpayers should also be aware that there are other unrelated scams (such as a lottery sweepstakes winner) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.

Reprinted from Accounting Today, By Michael Cohn

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4 Steps to Finding the Sweet Spot for Success

Ah, the sweet smell of success! Achieving goals and bringing our vision to fruition is the end-game for most of us, especially in our business lives. Unfortunately, success can sometimes elude us to the point where we have to start looking at what, exactly, is going wrong. Perhaps, though, the question we ought to be asking is this: What is going right? By honing in on what is bringing you or your company the results you want, instead of focusing on the things that are taking you further from where you want to be, you can discover your sweet spot—the place where you can find true success.

So how do you find your sweet spot? We’ll get to that in a minute, but first, let’s define what we mean by sweet spot. The sweet spot (for an individual or a business) is the intersection of the things that you are good at and come (relatively) easily to you or your team, and the things that the market (or an employer) is willing to pay for.

Finding your sweet spot as an individual professional and as a business owner is important because it allows you to operate with efficiency, strength and, usually, profitability. Surprisingly, many people and even entire companies continue to struggle without ever finding or leveraging their sweet spot. If you haven’t found your sweet spot yet, then now is the perfect time to start looking by following these four steps:

1. Cultivate your core competencies
Finding your sweet spot is really an inside job. It’s not about trying to add to what you have, it’s about leveraging your existing core competencies. You (or your business) made it this far, so you must have some valuable competencies that you can leverage into a viable career, company, or new product or service.

2. Seize on your strengths
Making a list of what you love to do (or what your company does well and profitably) is a great way to hone in on your strengths and identify your sweet spot. Maybe you love to design websites, create winning proposals, sell, write, do financial analysis, or sew cushions—whatever it is, it’s likely something that can lead you to your sweet spot. The other important thing to keep in mind is that you need to match up your strongest skills and talents with market demand. For example, while you may love to crochet potholders, the market may not support building an entire empire on that one activity alone.

3. Listen to your fans
Do people always tell you that you have an aptitude for art? Or do your customers rave about the unique flavors of cupcakes that your bakery only offers periodically? Make notes about what people praise you or your business for—and chances are, the exceptional things that others notice likely reside at the center of your sweet spot.

4. Start seeing your sweet spot
Now that you’ve identified your core competencies, your strengths, and the things that you are objectively good at (according to your fans), put them all together and start seeing where your sweet spot lies. Once you do this, consider if there are things that you are innately good at that can be monetized (i.e. people have a need for what it is you provide and will pay decent money for it). Once you have these figured out, create a plan to bring them to market. (Or, if you’re an individual, highlight them on your resume.)

If you’re seeking success and it seems to be eluding you, consider working toward identifying your sweet spot…the place where the things that you (or your team) are good at and the things that the market (or an employer) is willing to pay for come together in sweet harmony. While it may take a little bit of work on your part, the dividends of doing something you truly love and are well-suited for will be well worth the effort.

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Columbus Day Holiday

Our office will be closed for Columbus Day on Monday October 12, 2015

Regular office hours will resume on Tuesday October 13, 2015.

Have a safe and happy Columbus Day

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Ease Aches, Pains and Worker’s Comp Claims with These Ergonomics Tips

The Human Factors and Ergonomics Society has designated each October as National Ergonomics Month (NEM). Ergonomics is an applied science that incorporates principles of usability into the design process with the goal of making finished products more effective and safe for people to use.

In the workplace, proper ergonomic practices can play an important role in reducing pain, injuries, loss of productivity and the resulting Worker’s Comp claims. One of the most common ailments involved in Worker’s Comp cases, according to the Bureau of Labor Statistics are musculoskeletal disorders (MSDs) such as low back injuries, carpal tunnel syndrome, and soft tissue damage, which can increase the risks of accidents and repetitive strain injuries. With October almost here, it’s the perfect time to consider the following tips for reducing MSDs from the Occupational Health & Safety Administration to make your workplace safer and more productive:

• Provide Management Support - A strong commitment by management is critical to the overall success of an ergonomic process. Management should define clear goals and objectives for the ergonomic process, discuss them with their workers, assign responsibilities to designated staff members, and communicate clearly with the workforce.
• Involve Workers - A participatory ergonomic approach, where workers are directly involved in worksite assessments, solution development, and implementation is the essence of a successful ergonomic process. Workers can:
  • Identify and provide important information about hazards in their workplaces.
  • Assist in the ergonomic process by voicing their concerns and suggestions for reducing exposure to risk factors and by evaluating the changes made as a result of an ergonomic assessment.
• Provide Training - Training is an important element in the ergonomic process. It ensures that workers are aware of ergonomics and its benefits, become informed about ergonomics related concerns in the workplace, and understand the importance of reporting early symptoms of MSDs.
• Identify Problems - An important step in the ergonomic process is to identify and assess ergonomic problems in the workplace before they result in MSDs.
• Encourage Early Reporting of MSD Symptoms - Early reporting can accelerate the job assessment and improvement process, helping to prevent or reduce the progression of symptoms, the development of serious injuries, and subsequent lost-time claims.
• Implement Solutions to Control Hazards - There are many possible solutions that can be implemented to reduce, control, or eliminate workplace MSDs.
• Evaluate Progress - Established evaluation and corrective action procedures need to be in place to periodically assess the effectiveness of the ergonomic process and to ensure its continuous improvement and long-term success. As an ergonomic process is first developing, assessments should include determining whether goals set for the ergonomic process have been met and determining the success of the implemented ergonomic solutions.

Ergonomics tools and practices can help to keep workers healthy, reduce the costs of Worker’s Comp claims, and increase productivity, quality, and employee morale. Implementation may take some time and effort, but the benefits are well worth it.

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Make the Switch to New Payments Technology

By SBA Administrator Maria Contreras-Sweet and Square CEO Jack Dorsey  

This October, America will take a major step to mitigate fraud and improve our financial security by migrating away from outdated credit and debit cards that transmit sensitive customer data using magnetic stripes. In 2015, it should not surprise us that a system using essentially the same technology as cassette tapes is especially vulnerable. That is why major credit card companies, lenders, and businesses are now embracing new, more secure, authenticated payment technologies.

Many consumers already have credit cards embedded with microchips in their wallets, and many more will be receiving these cards in the coming months. This technology – also known as EMV (Europay, Mastercard, Visa) – is a safer form of payment for buyers and sellers alike, as the cards are nearly impossible to counterfeit.

EMV is not the only payment shift on the horizon. Because reading chip cards takes more time than reading magstripe cards, we expect increased adoption of faster, contactless options, such as Apple Pay and Android Pay. This technology allows a consumer to pay with a smartphone by using a phone linked to their credit card. It is fast, safe, and convenient.

The shift to new technologies and authenticated payments is important because we have a sizeable fraud problem in the United States. According to data from The Nilson Report and BI Intelligence, the U.S lost seven billion dollars to credit card fraud in 2013. That is more than the fraud loss sustained by the rest of the world combined.

Credit card fraud losses in the U.S. are disproportionately high because chip cards are already the norm in most nations. Roughly 90 percent of credit card terminals in Europe are now chip-enabled. The United Kingdom has seen nearly a 70 percent decline in counterfeit card transactions since making the transition, according to Barclays. 

U.S. credit card companies have set October 1 as the date for the national adoption of chip cards here at home. On this date, there will a “liability shift.” Businesses that have not acquired the technology to process chip cards will become financially responsible for certain fraudulent transactions previously covered by the cardholder’s issuing bank.

We need to make sure that small businesses are not left in the dark or on the hook. The U.S. Small Business Administration (SBA) and Square are working to help small businesses get educated and prepared for the transition to come. We are tapping into our millions-strong combined network of business owners to get the payment security message out at events across the country and online (more information is available at http://www.sba.gov/emv).

The majority of small businesses will need to upgrade their payment systems, as only about 20 percent of payment terminals are currently equipped to accept chip cards, and most of these are at larger retailers. Accepting contactless payments also requires new technology for most businesses; a recent report shows that 87 percent of small businesses do not currently accept mobile payments.

Advances in technology play a critical role in driving and shaping global commerce -- but the true value can only be realized if everyone has equal opportunity to take advantage. Too often these changes are easily adopted by large companies with deep pockets, but are out of reach for America’s small businesses.

This should not scare anyone – it represents an opportunity. This shift is a chance for small businesses to lead the industry forward, benefiting from the latest enhancements in payment technology while also meeting the needs of customers who want to best protect themselves from fraud.

Many new EMV-enabled and contactless systems are just hitting the market. There are many affordable hardware solutions that will not break the bank of our small businesses. In fact, accessories to complement existing payment terminals are already available, with more coming online every day.

Adopting secure payment technologies is not only an important way for small businesses to distinguish themselves with their customers – it is also critical to our nation’s economy. When we invest in making sure small businesses have access to and use new technology, we all benefit.

To learn more, sign up for the upcoming webinar presentation hosted by SBA and Square,EMV 101: What Small Businesses Need to Know About The Switch to Chip Card Technology, scheduled for October 14th at 2pm ET. Click here to register.

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Spending Less Cash on Gas? Use Your Savings to Rev-Up Your Finances

If you did any road trips over the summer—or you commute to work—you’ve likely noticed that filling up your vehicle doesn’t necessarily empty your wallet anymore. Thanks to lower gas prices, the average American is on track to save approximately $750 on gas this year.

While it’s not life-changing, $750 can make a difference to your personal finances if you use it wisely. Here are some smart ideas for taking the money you save on gas for the remainder of this year (or as long as gas prices continue to stay low) and revving-up your financial situation.

1. Pay down credit card debt. Credit cards have some of the highest interest rates, so reducing any balance you have on your credit card will save you additional money in the long run.
   
   
2. Make an extra payment on a lower-interest loan. Although interest rates on mortgages, car loans and student loans are typically much lower than on credit card debt, you can still save money by reducing the principal on a lower-interest loan with a lump sum payment or by making an extra payment, if your creditor allows you to do so.
   
   
3. Pump up your holiday savings. Thanksgiving and the winter holiday season are just a few short months away—why not take the money you save every time you fill up your car and put it in a special savings account to use to buffer your holiday budget?
   
   
4. Put money away for a rainy day (or for a future gas price increase). What goes down, will likely go up again, especially when it’s something like gas prices that are impacted by market forces. To ease the pain of facing higher fuel prices in the future, put the financial differential of your current fuel costs compared to what you used to pay for gas into a rainy day account so you can access it when you need it.

It’s unlikely that gas prices will remain low forever, so instead of frittering away the money you’re saving on fuel now, make a conscious effort to use it to accelerate your personal financial goals with one of the tips above.

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3RD QUARTER ESTIMATED TAX PAYMENTS DUE SEPTEMBER 15, 2015

Your third quarter 2015 federal and state estimated tax payments are due on September 15, 2015.

Your estimate vouchers are located in the Client Action Required folder in your client portal.

Accurate 2015 estimated payments are neccessary to avoid future interest and penalties, so please keep us informed of any significant changes in your financial affairs or of any correspondence received from taxing authorities.

If you have any questions or if we can be of assistance in any way, please do not hesitate to call us at 508 896-3377.

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New Tax Law More Than Doubles Fines for Failure to File Information Returns and Failure to Provide Payee Statements

The Trade Preferences Extension Act of 2015 was recently signed into law. Part of this new law includes a provision that more than doubles the cap on penalties from $1.5 million to $3 million for 1) failure to file correct tax information returns and 2) failure to provide payee statements. In both cases, fines have been increased from $100 to $250.

These changes are effective for returns and statements required to be filed after December 31, 2015.

The impact of these increased penalties is likely to be significant given that the penalties apply to a wide range of information returns and statements, including W-2s, 1099s, and Forms 1042 and 1042-S (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons). In addition, the IRS has formed special units to address information reporting issues both within the Large Business and International (LB&I) Division and within the Office of Associate Chief Counsel (International). These actions may suggest heightened IRS interest in information reporting audits that could lead to adjustments to which the increased penalties would apply.

In light of these changes, it is critical that businesses be vigilant about filing information returns and providing payee statements to all applicable parties. If you have any questions about these requirements related to your business or your personal situation, please contact our firm.

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Client Appreciation Cookout - Friday September 4, 2015 12:00-3:pm

We hope you had a fabulous summer season. Come celebrate Labor Day with us on Friday, September 4th, from noon until 3pm. Please stop by for some burgers, hot dogs, drinks and desserts with our staff.

Relax and start the weekend off right!

We look forward to seeing you at our office 2759 Main Street in Brewster.

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Highway Funding Bill Ushers in New Tax Return Due Dates and Other Important Changes

As reported by The Journal of Accountancy on July 31, the short-term highway funding extension passed by the Senate—and signed by President Obama—at the end of July contains several important tax provisions (H.R. 3236). The bill was passed by the House of Representatives, 385–34. The bill modifies the due dates for several common tax returns, overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries. Here is a summary of the changes:

Due date modifications for business and other tax returns

• The act sets new due dates for partnership and C corporation returns, as well as FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), and several other IRS information returns.
• For partnership returns, the new due date is March 15 (for calendar-year partnerships) and the 15th day of the third month following the close of the fiscal year (for fiscal-year partnerships). (Currently, these returns are due on April 15 for calendar-year partnerships.) The act directs the IRS to allow a maximum extension of six months for Forms 1065, U.S. Return of Partnership Income.
• For C corporations, the new due date is the 15th day of the fourth month following the close of the corporation’s year. (Currently, these returns are due on the 15th day of the third month following the close of the corporation’s year.)
• Corporations will be allowed a six-month extension, except that calendar-year corporations would get a five-month extension until 2026 and corporations with a June 30 year end would get a seven-month extension until 2026.
• The new due dates will apply to returns for tax years beginning after Dec. 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after Dec. 31, 2025.
• The due date for FinCEN Form 114 is changed from June 30 to April 15, and for the first time taxpayers will be allowed a six-month extension.
• The due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers with a maximum six-month extension.

Additional information is now required on returns relating to mortgage interest

The bill also amended Sec. 6050H requiring new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns and statements due after Dec. 31, 2016.

Consistent basis reporting between estate and beneficiaries

The act also amends Sec. 1014 to mandate that anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes. It also creates a new Sec. 6035, which requires executors of estates that are required to file an estate tax return to furnish information returns to the IRS and payee statements to any person acquiring an interest in property from the estate.

These statements will identify the value of each interest in property acquired from the estate as reported on the estate tax return. The new basis reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment.

Our firm will keep you informed on these and other changes that affect your tax planning and reporting. If you have any questions about the changes outlined here, please contact us.

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2015 Massachusetts' Sales Tax Holiday Set for August 15-16th.

Last Week Governor Baker signed into law a sales tax holiday for the weekend of  August 15-16th.

Here is a summary of the act. If you have any questions, please contact us.

TIR 15-7: The 2015 Massachusetts Sales Tax Holiday Weekend
 

I.  Introduction

A recently enacted statute provides for a Massachusetts “sales tax holiday weekend,” i.e., two consecutive days during which most purchases made by individuals for personal use will not be subject to Massachusetts sales or use taxes.  St. 2015, c. XXX (“the Act”).  The Act provides that the sales tax holiday will occur on August 15 and 16, 2015 and on those days, non-business sales at retail of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes, subject to certain exclusions. The following do not qualify for the sales tax holiday exemption and remain subject to tax: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500.  The Act charges the Commissioner of Revenue with issuing instructions or forms and rules and regulations necessary to carry out the purposes of the Act.

II.  Purchases Qualifying for the Exemption

The exemption applies to sales of tangible personal property bought for personal use only.  Purchases by corporations or other businesses and purchases by individuals for business use remain taxable.  Purchases exempt from the sales tax under G.L. c. 64H are also exempt from use tax under G.L. c. 64I.  Therefore, eligible items of tangible personal property purchased on the Massachusetts sales tax holiday from out-of-state retailers for use in Massachusetts are exempt from the Massachusetts use tax.

III.  Specific Rules

The following rules are to be applied by retailers in administering the Massachusetts sales tax holiday exemption:

A.  Non-Exempt Sales.  All sales of motor vehicles,[1] motorboats,[2] meals,[3] telecommunications services,[4] gas,[5] steam, electricity, tobacco products[6] and of any single item whose price is in excess of $2,500, do not qualify for the sales tax holiday exemption and remain subject to tax.

B.  Threshold.  When the sales price of any single item is greater than $2,500, sales or use tax is due on the entire price charged for the item.  The sales price is not reduced by the threshold amount.  For example, if an item is sold for $3,000, the entire sales price of the item is taxable, not just the amount that exceeds $2,500.

Exception:  Under G.L. c. 64H, § 6(k) there is no sales tax on any article of clothing unless the sales price exceeds $175; in that case, only the increment over $175 is subject to tax.  If, on the sales tax holiday, the price of an article of clothing exceeds the threshold, the first $175 may be deducted from the amount subject to tax.  The $2,500 threshold amount is not increased by $175.

Examples:

A customer buys a suit on the sales tax holiday for $600. No tax is due.

A customer buys a wedding dress on the sales tax holiday for $2,550.  Tax is due on $2,375 ($2,550 - $175).

C.  Multiple Items on One Invoice.  Where a customer is purchasing multiple items on the sales tax holiday, separate invoices do not need to be prepared.  As long as each individual item is $2500 or less, there is no upper limit on the tax-free amount each customer may purchase.

Example:  A customer purchases a television, a stereo receiver, and a computer.  The three separate items costing $1,500, $1,200 and $2,000 can be rung up together, all tax free.

D.  Bundled Transactions.  When several items are offered for sale at a single price, the entire package is exempt if the sales price of the package is $2,500 or less.  For example, a computer package including a CPU, keyboard, monitor, mouse, and printer with a single sales price of $3,500 would not qualify for the sales tax holiday exemption because the single sales price of the package ($3,500) is more than the sales tax holiday threshold amount of $2,500.

Items that are priced separately and are to be sold as separate articles will qualify for the sales tax holiday exemption if the price of each article is $2,500 or less.  For example, a customer purchases a personal computer for $3,000, and a computer printer for $200, each of which is priced separately.  The purchase of the personal computer will not qualify for the exemption because the sales price ($3,000) is in excess of the sales tax holiday threshold amount of $2,500.  However, since the sales price of the computer printer ($200) is less than $2,500, the printer would be exempt from tax.

E.  Coupons and Discounts.  If a store coupon or discount provided by a retailer or manufacturer reduces the sales price of the property, the discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less.  If a store coupon or discount applies to the total amount paid by a purchaser rather than to the sales price of a particular item and the purchaser has purchased both eligible property and taxable property, the seller should allocate the discount on a pro rata basis to each article sold.

Example:  A furniture store customer has a coupon for 20% off her entire bill.  She purchases a dining room table for $1,800, and a sofa for $3,500.  The total discount available is $1,060 ($5,300 x .20), of which $360 is attributable to the table ($1,800 x .20), and $700 is attributable to the sofa ($3,500 x .20).  No tax is due on the sale of the table.  Tax of $175 is due on the sales price of the sofa, $2,800 ($3,500 - $700), as even its discounted price exceeds the $2,500 threshold.

F.  Exchanges.  Consistent with the Department’s usual practice, if a customer purchases an item of eligible property during the sales tax holiday, but later exchanges the item for an identical or similar eligible item, for the same price (“an even exchange”), no tax is due even if the exchange is made after the sales tax holiday, see LR 03-8.

G.  Layaway Sales.  A layaway sale is a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time and receives the property when the last payment is made. Layaway sales do not qualify for the sales tax holiday, even if the last required payment (or payments necessary to complete the transaction) is made on August 15 or 16, 2015.

H.  Special Order Items; Transfer of Possession after Sales Tax Holiday.  Special order items such as furniture are eligible for the sales tax holiday so long as they are ordered and paid in full on the sales tax holiday weekend, and the cost of each item is $2,500 or less, even if delivery is made at a later date.  Generally, a customer pays for an item when: (1) the seller receives cash, a check, or a money order; (2) the seller processes a credit card or debit card transaction; or (3) the buyer and seller enter into financing arrangements with a third party, including an affiliated entity (but excluding seller financing where the seller extends credit to the customer).  A prior special order purchase with a deposit paid before August 15, 2015 will not qualify for the holiday, even if the retail customer pays the entire remaining balance due on August 15 or 16, 2015.

I.  Rain checks.  When a customer receives a rain check because an item on sale was not available, property bought with the use of the rain check will qualify for the exemption regardless of when the rain check was issued if the rain check is used on the sales tax holiday weekend.  Issuance of a rain check during the sales tax holiday weekend will not qualify otherwise eligible property for the sales tax holiday exemption if the property is actually purchased after the sales tax holiday.

J.  Rentals.  Generally, rentals for thirty days or less of tangible personal property other than motor vehicles and motorboats are eligible for the sales tax holiday, even if the rental period covers days before or after the holiday, providing payment in full is made during the sales tax holiday weekend.  The sales tax holiday does not apply to rentals or leases of tangible personal property of any type if the term of the rental or lease contract is longer than thirty days.

K.  Rebates.  A rebate is a refund of an amount of money by the manufacturer of a product to the retail purchaser of the product.  If a vendor sells tangible personal property to a customer who applies a manufacturer's rebate to reduce the sales price at the time of the sale, the rebate is generally treated as a cash discount and is excluded from the sales price. The discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less.

If a vendor sells tangible personal property to a customer who will receive a rebate after the sale (e.g., by mailing a coupon to the manufacturer), the full purchase price of the property determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less, and tax must be charged on the full purchase price if it is over $2,500.

If a vendor offers a customer a cash discount upon the purchase of tangible personal property and the customer also receives a rebate from the manufacturer of the property after the sale, only the cash discount given by the retailer is excluded from the sales price for purposes of the sales tax holiday exemption.  The amount of the manufacturer's rebate is not deducted from the sales price.

L.  Internet Sales.  If a customer orders an item of eligible property over the Internet, the item is exempt if it is ordered and paid for on August 15 or 16, 2015 Eastern Daylight Time.  Generally, a customer pays for an item when the seller receives a credit card number, a debit authorization, a check, or a money order.  The actual delivery can occur after the holiday period.  For example: a customer orders a computer over the Internet with a sales price of $2,000 and charges the sale to his credit card at 1:00 p.m. (EDT) on August 15 or 16, 2015; the computer has a delivery date of September 20, 2015.  The sale is exempt since the computer was ordered and paid for during the sales tax holiday.

M.  Splitting of Items Normally Sold Together.  Articles normally sold as a single unit must continue to be sold in that manner.  Such articles cannot be priced separately and sold as individual items in order to obtain the sales tax holiday exemption.

N.  Returns.  Generally, sales tax may only be refunded to a retail customer on returns within 90 days of the sale.  G.L. c. 64H, § 1.  For the 90 day period following August 15 or 16, 2015, when a customer returns an item that could have qualified for the sales tax holiday exemption, the vendor may not credit or refund sales tax to the retail customer unless (1) the customer provides a receipt or invoice that shows the tax was paid or (2) the seller’s records show that tax was paid.  Sellers may set their own return policies.  This requirement is not intended to change or extend a seller’s return policy.

O.  Erroneously Collected Taxes.  Customers who were erroneously charged sales tax by a vendor for an exempt purchase should take their tax paid receipt to the vendor to obtain the refund.  If the vendor has previously remitted the erroneously collected tax to the Department, the vendor may file an application for abatement of the erroneously collected tax within 3 years upon satisfactory evidence that the vendor has credited or refunded the tax to the purchaser.

IV. Responsibilities of Retailers

A.  Participation.  All Massachusetts businesses normally making taxable sales of tangible personal property that are open on August 15 or 16, 2015 must participate in this sales tax holiday.

B.  Erroneous Collection.  Any sales or use tax erroneously or improperly collected by a retailer on August 15 or 16, 2015 must be remitted to the Department of Revenue. 

C.  Requirement of Nonbusiness Use by the Purchaser.  Normal business records showing the date of sale, item(s) purchased, and selling price must be kept by the retailer/ vendor.  The requirement that purchases under the sales tax holiday be for nonbusiness use is unchanged and purchasers paying for tangible personal property with business credit cards or checks must be charged tax on the items purchased.

D.  Out-of-State Retailers.  Out-of-state retailers registered to collect Massachusetts sales and use taxes must participate in this sales tax holiday.  Such retailers should not collect sales/use tax for items ordered and paid for on August 15 or 16, 2015 in accordance with the rules of this technical information release.  The retailers must keep records sufficient to verify the date of sale, item(s) purchased, and selling price.

E.  Penalties.  Retailers that back-date sales occurring after August 16, 2015 or that forward-date sales that occurred before August 15, 2015 in order to make them appear to qualify for the sales tax holiday or otherwise fail to follow the rules in the TIR in order to improperly avoid collecting and remitting sales or use tax may be subject to the tax evasion penalties of G.L. c. 62C, § 73, including a felony conviction, a fine of not more than $100,000 or $500,000 in the case of a corporation, or by imprisonment for not more than five years, or both, and may also be required to pay the costs of prosecution. A vendor may not void and rewrite a sale that has taken place before August 15, 2015 for the purpose of bringing the transaction under the sales tax holiday rules.

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Not Sure Which Metrics Are Right for Your Business? Help is Here!

As legendary business author Peter Drucker once said, "What's measured improves." If you've been in business any length of time, you know that creating meaningful measurements that tell you how your business is doing (a.k.a. Key Performance Indicators or KPIs) can be challenging. The good news is, you only need a few KPIs to really get a handle on the financial pulse of your business.

Rick Smith, Director of Business Analysis and Process Improvement at Yale University says the best place to start is by clarifying what should be included in the "critical few" measurements that business owners focus on. He suggests using a problem-solving perspective and asking three key questions:

1. How are you doing?
2. How do you know?
3. Where must you improve?

While this approach is simple, it does require you to dig deep and ask probing questions in order for it to be effective.

Smith also says that it's important to differentiate between KPIs and metrics. A KPI equals a metric, but a metric does not equal a KPI. A metric is simply a data point such as 300 calls per day. That doesn't tell you if it's good or bad. A KPI includes two points to measure: 1) where you are and 2) where you should be as defined by your business objectives, service level agreements, or company specifications.

Smith also points out that businesses often create both operational and customer experience metrics, and they can get out of sync. Operational metrics show everything is working fine, but the customer experience metrics tell a different story. This is usually caused by not measuring the right things or not measuring correctly. To counteract this problem, Smith developed an indicator called the FVI (FACE Value Index). A high FVI is a good indicator that your business practices are in harmony with established KPIs.

The FACE components include:

F = Fast (i.e. Are you being efficient?)

A = Accurate (i.e. What is your error ratio?)

C = Cost Effective (i.e. Are you meeting profitability goals?)

E = Easy (i.e. Can you maintain the process without excessive effort or resources?)

By using Smith's two-part process for establishing and measuring KPIs you can more easily determine metrics for your business processes, beginning with the three key questions above to narrow down the "critical few." Then use the FACE components to establish your metrics. Two to three metrics in each major area of your business to determine how you are doing should be sufficient.

Our financial experts have a wealth of experience in helping business owners measure and improve their KPIs. Please contact us if we can be of assistance in this regard.

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Top 10 Tips about Tax Breaks for the Military

Top 10 Tips about Tax Breaks for the Military

If you are in the U. S. Armed Forces, special tax breaks may apply to you. For example, some types of pay are not taxable. Certain rules apply to deductions or credits that you may be able to claim that can lower your tax. In some cases, you may get more time to file your tax return. You may also get more time to pay your income tax. Here are the top 10 IRS tax tips about these rules:

1. Deadline Extensions.  Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
2. Combat Pay Exclusion.  If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay is not part of the wages reported on your Form W-2, Wage and Tax Statement. If you serve in support of a combat zone, you may qualify for this exclusion.
3. Earned Income Tax Credit or EITC.  If you get nontaxable combat pay, you can include it to figure your EITC. Doing so may boost your credit. Even if you do, the combat pay stays nontaxable.
4. Moving Expense Deduction.  You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
5. Uniform Deduction.  You can deduct the costs of certain uniforms that you can’t wear while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
6. Signing Joint Returns.  Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
7. Reservists’ Travel Deduction.  If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
8. ROTC Allowances.  Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.
9. Civilian Life.  If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
10. Tax Help.  Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.

For more, refer to Publication 3, Armed Forces’ Tax Guide. It is available onIRS.gov/forms at any time.

IRS Summertime Tax Tip 2015-06

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Plan in Advance to Help Aging Parents Manage Their Money

For many adult children, it’s hard to contemplate the fact that their once seemingly invincible parents may now—or at some point down the road—become dependent on them to take care of their everyday needs. If you don’t feel prepared to take on these tasks, this scenario can be very stressful—especially when part of your duties involves taking care of your parents’ finances. Even if you're not at this point with your parents yet, it is important to engage in some basic planning and start preparing in case you do have to take control of their financial affairs later. Follow these tips to help you prepare:

Be proactive—talk to your parents now. If your parents are still mentally and physically fit, now is the time to have a conversation about what they would like to see happen if they eventually need you step in and manage their finances. A critical part of this kind of preparation is to encourage your mom and dad to assemble a document that details the location of their financial accounts and safe-deposit boxes, as well as the names of their financial professionals. They may not be comfortable with you knowing how much money they have, but you need to have access to account numbers, contact information, and names of financial institutions so that you have them in case of an emergency. If you don’t need it right now, make sure this information is kept somewhere secure.

Find out what their financial obligations are. Knowing where your parents stand with bank accounts, their relationships with financial institutions, and their overall assets is only half the story when it comes to being proactive about helping your parents manage their finances. You also need to know what their financial obligations are. Have your parents create a list of all their expenses, so you’ll know what bills need to be paid on a regular basis in case you have to make payments on their behalf. Writing down the specific names of utilities, credit card companies, and the like on this list may seem like a pain, but you’ll be glad you have them if you have to start paying your parents’ bills suddenly—especially if you live far away and aren’t familiar with your parents’ local service providers.

Learn who your parents’ trusted advisors are. In addition to being familiar with the actual transactions of your parents’ financial affairs you should also know which financial professionals they have relationships with. If your parents are still capable of actively managing their finances, but are open to you at least meeting their CPA, investment advisor, and attorney, it may be worthwhile taking advantage of the opportunity to meet them and introduce yourself, in case you need to step in. If your parents aren’t open to the idea of making these introductions, make sure you at least have the information you need to contact your parents’ advisors in the event that you need to act on their behalf.

Having a parent who becomes dependent on you can be a burden that takes its toll on you in many ways. However, with a little bit of advance planning, you should be able to prepare the information you need to manage your parents’ finances effectively, and reducing your stress when it comes to handling the financial piece of their affairs.

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July 4th Holiday

We wish all of our clients and friends a very happy and safe 4th of July!

In observance of Independence Day, we will be closed on Friday  July 3rd. We will reopen on Monday, July 6th at 9:00 am.

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Massachusetts’ Earned Sick Time is now the law

On July 1st, 2015, the new Massachusetts’ Earned Sick Time Law will take effect. All employers, regardless of employer size, will be required to provide earned sick time to all employees (full time, part time, seasonal, temporary, interns). Employers with 11 or more employees must provide paid sick leave. Employers with less than 11 employees must provide unpaid sick leave.

The final regulations issued by the Commonwealth of Massachusetts on June 23, 2015 contain significant changes. An employer is considered to have 11 or more employees if the employer maintained an average of 11 or more employees during the previous benefit year. The average number of employees during a benefit year will be determined by counting the number of all employees (full time, part time, seasonal, temporary, interns) on the payroll during each pay period and dividing by the number of pay periods.

Beginning on July 1st, 2015, you must:

• Track the accrual and use of earned sick time for all employees

• Post the Earned Sick Time Notice of Employee Rights in a conspicuous location accessible to all employees

• Provide a hard copy or electronic copy of the Earned Sick Time Notice of Employee Rights to all employees or include the employer’s policy on earned sick time or the employer’s allowable substitute paid leave policy in any manual or handbook

For more information on the Massachusetts’ Earned Sick Time Law, please refer to our FAQ at https://www.atlanticpayroll.com/resources/faq-mass-sick-time-law or contact us!

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Four Ways Mid-Year Financial Planning Can Pay Off

Tax season is over and one of the biggest American celebrations—the Fourth of July—is just around the corner.  Maybe you’re looking forward to a little downtime this summer, so perhaps working on your financial plan has slipped to the bottom of your to-do list. It’s understandable, but putting your finances on cruise control at mid-year is not an ideal strategy. Here are four reasons why you should put a mid-year financial review at the top of your priority list…

1. Looking at your finances mid-year means you still have time to meet your goals

Mid-year is an ideal time to do a financial review because a) you’re not under the gun trying to get your taxes done and b) there are some important planning opportunities that you can benefit from now that won’t be available if you wait until the end of the year. For example:

• Are there any life-changing events occurring soon such as marriage, the birth of a child, retirement, or a career change?
• Will your income or expenses substantially increase or decrease this year?
• Are you on track with your savings goals?
• Are you comfortable with the amount of debt that you have?
• How is your investment portfolio doing?

These are all areas to review at mid-year to ensure you can reach your goals and not end up with costly surprises once it is too late to take corrective action.

2. You may be able to reduce your taxes now—and pay less next April

Sure, you may have digitally filed your tax return away for the year, but taxes are not meant to be a once-a-year task. Having an ongoing tax plan is the best way to reduce your tax burden—and relieve the pain of tax season.

Your tax professional can help you do a mid-year estimate of your tax liability, which may reveal tax planning opportunities. Using last year’s tax return as a basis, you can make adjustments to your income and deductions that will pay off next tax season. In addition, you can check to make sure that you are withholding the correct amount of tax on your income—especially if you owed a lot of money or received a big refund this past April.

3. You’ll really be ready for retirement

Do you look at your investment account statements when you receive them, or do you put them in a drawer unopened? Are you in a set-it-and-forget-it investment mindset? If either of these scenarios sound familiar to you, then make this summer the time to take a good look at how your investments are doing and make any necessary adjustments to your investment strategy.

If you are an active investor and you received a pay increase this year, consider increasing your retirement plan contributions by asking your employer to set aside a higher percentage of your salary. In 2015, you can usually contribute up to $18,000 to your workplace retirement plan ($24,000 if you’re age 50 or older).

Already retired? Then a mid-year review is equally important for you to ensure you have the income you need and that your current investments and distribution strategy are ideal for your situation.

4. Enjoy the summer with financial peace of mind

One of the most important things that a mid-year financial review can do for you is provide peace of mind. By taking a little bit of proactive action now and working with our team to make sure you are on track with your financial goals, you’ll be able to really relax and enjoy all the summer season has to offer—knowing that you’ll be in great shape when year-end and next tax season come around again.

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Summer Break for Your Kids Could Mean a Tax Break for Your Business

School’s out for many kids, and if you run your own business, you may be able to turn your child’s summer break into a tax advantage—and some extra help—for you.

Hiring your offspring as an employee to do legitimate work in your business provides several tax benefits:

• You can deduct the salary you pay your child from your business income as a business expense.
• You can shift part of your business income from your own tax bracket to your child’s bracket, which often creates substantial tax savings.
• Your child only pays tax on the money they earn in excess of the standard deduction amount for the year.
• If your child is a minor, in most cases (see the exceptions below) you don’t have to withhold or pay any FICA (Social Security or Medicare) tax on the salary due to the federal employment tax exemption for under-age-18 employees.

Sounds great…doesn’t it? Keep your kids busy all summer, get additional assistance at your business, and reap the tax savings. However, the IRS does keep close tabs on parents who employ their children to ensure that the situation is legitimate and in keeping with these three rules:

Rule 1: Your child must be a bona fide employee
The work your child does must be common and necessary for your business and their pay must be for services actually performed. Their services don’t have to be indispensable, but they do need to be appropriate for your business. Any real work for your business can qualify, but personal services such as babysitting or lawn mowing at your residence do not.

How young can a child be to qualify as an actual employee? According to recent reports, the IRS accepts children seven and older as being able to perform useful work for a business. You should keep track of the work and hours your children perform by having them fill out timesheets with the date, the services performed, and the time spent performing the services.

Rule 2: Keep compensation reasonable
Your child’s total compensation (salary plus fringe benefits) must be reasonable. This is determined by comparing the amount paid with the market value of the services performed. In order to keep track of what you pay your child, use checks (not cash) once or twice a month just like you would for any other employee. The funds should be deposited in a bank account in your child’s name.

Rule 3: Legal requirements for employers still apply
Even if you are hiring your child, you must comply with the same legal requirements as you do when you hire any other employee. This includes completing IRS Form W-4 and U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You must also record your child’s Social Security Number and complete and file IRS Form W-2 showing how much you paid your child.

An important note: The federal employment tax exemption for minors employed by their parents mentioned above, is only available when the parent’s business (the employer) is conducted as: (1) a sole proprietorship, (2) a single-member LLC (SMLLC) that’s treated as a sole proprietorship for tax purposes, (3) a husband-wife partnership, or (4) a husband-wife LLC that’s treated as a husband-wife partnership for tax purposes.

If your business is a corporation, the federal employment tax exemption is unavailable for wages paid to your child, but hiring them can still be a tax advantage because your child’s standard deduction will provide an income tax shelter and your business can deduct the wages and the employer’s share of employment taxes.

If you’re a business owner with a child capable of doing meaningful work, this summer may be the perfect time to introduce them to the concept of earning their keep—and helping mom or dad in the process!

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The IRS Confirms Hacking of Taxpayer Accounts—What You Need to Know

Last week, the Internal Revenue Service (IRS) announced that a "brute force" hacking attempt compromised approximately 104,000 taxpayer accounts through the utilization of the “Get Transcript” tool located on IRS.gov. In the attack, hackers utilized information gleaned from black market sources to answer identity verification questions and receive confidential information from the IRS system. 

The IRS reports that the system has been used 23 million times to provide taxpayers important information about their tax accounts as well as wage and earnings information. Although this hacking attempt is significant, as one industry source reports, less than one half of one percent of successful requests to the Get Transcript system were fraudulent—the hackers already had access to Social Security numbers, birthdates, and identity verification information like former addresses and phone numbers. They did not steal this information from Get Transcript.

Taxpayers whose accounts were compromised will be notified by the Internal Revenue Service. Individuals who believe their identities have been compromised in this, or any other attempt, should review the IRS “Taxpayer Guide to Identity Theft,” which advises the following course of action:

1. File a police report.
2. File a complaint with the Federal Trade Commission.
3. Contact one or more trade bureau and request a “fraud alert.”
4. Close any financial accounts opened without your permission.
5. Respond immediately to any IRS notice.
6. Complete IRS Form 14039, Identity Theft Affidavit.
7. Continue to file your tax return, even if by paper.

Source: CPA Tax & Compliance Advisor email published by CPA Practice Advisor.

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Massachusetts' Sick Time Law Seminar

Sick Time Law starts July 1, 2015 !.....Are you ready?

All employers in Massachusetts will be required to provide earned sick time starting July 1, 2015.

Join us on June 25, 2015 at 5:30 at the Orleans Firehouse Gallery, 44 Main Street, Orleans, MA, 02653. Learn how this new law will impact your business and the steps necessary to implement it.

Register for this seminar at https://events.r20.constantcontact.com/register/eventReg?oeidk=a07eb2mbxa1c1aec289&oseq=&c=&ch=

We have added a FAQ in our Resource Center that summarizes the requirements of the law.

For more information, please contact us!

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Take Time to Really Live Offline

It’s no secret that the majority of Americans are spending a lot of time online. While some of the time we spend on the Internet is productive, there’s a lot of it that’s not—and it’s crowding out some of our higher value offline activities, according to research from the National Bureau of Economic Research (NBER).

In a recent NBER study, each minute of online leisure time is correlated with 0.29 fewer minutes on all other types of leisure—with about half of that coming from time spent watching TV and video, 0.05 minutes from (offline) socializing, 0.04 minutes from relaxing and thinking, and the balance from time spent at parties, attending cultural events, and listening to the radio. While these may seem like really small increments of time, they do add up over the course of weeks and months. As such, you may want to consider replacing some of your offline time to do the things that really make life worth living. Here are a few ideas to get you started:

• Talk to people face-to-face. Even in today’s connected world, digital communication is no substitute for in-person interaction. It’s simply not the same as in-person interactions with all of the emotion and body language cues.
• Take care of yourself. No time to exercise or to eat a healthy meal? No time to take a relaxing bath or to read a good book? If you spend time surfing the web or using social media, it’s likely that you have at least half an hour a day of leisure time that could be used to do these things or something else that’s good for you.
• Spend time in nature. Let’s face it; when we’re surfing the web or navigating social media, we’re generally being sedentary and unengaged with the world around us. Instead of spending your usual time on Facebook or Pinterest, why not take a walk outside, appreciating the beauty of the natural world around you—even better take a friend with you so you can really connect.
• Reconnect with relatives. Life is short, so taking every opportunity we have to enjoy time (offline) with our families should be a priority. Instead of exchanging messages on Facebook or through email, invite your relatives over for some real bonding time, including board games, a real meal cooked together at home, or just an afternoon of relaxation and recounting family stories.
• Do nothing. Part of the allure of the Web is that we can feel productive simply by surfing it. However, there’s nothing wrong with doing nothing—and it might actually do you a lot of good in terms of enhancing your problem-solving and creative abilities. So disconnect, unplug, and learn to be still with life on a regular basis.

There’s no doubt that the Internet has transformed our lives and, for the most part, it’s been for the better. However, like most things, balance is the key. Take time daily—or at least weekly—to do some of the activities suggested above or to incorporate some of your own favorite offline pursuits. Chances are, you’ll find that doing so will improve the overall quality of your life.

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Memorial Day Holiday

In observance of Memorial Day, we will be closing the office at 3:00 on Friday May 22,2015.

Our office will be closed for Memorial Day on Monday, May 25, 2015.

Regular office hours will resume on Tuesday, May 26, 2015.

Have a safe and happy Memorial Day!

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Want to Improve the Efficiency of Your Business? Toss the To-Do List

When it comes to running a business, building as much efficiency as possible into your operations is the key to keeping things running smoothly and freeing up your own time to focus on the big picture. While employing the right team and the right technology are integral to boosting efficiency, so is having the right mindset when it comes to how you approach day-to-day tasks.

You may be surprised to learn that the traditional to-do list can actually hamper your ability to improve the efficiency of your business—and your own productivity. So what is the alternative for those of us who “Live by the list?” According to entrepreneurial efficiency and business experts, the key is to make sure that your to-do list is not just a vehicle for checking off mundane items, but instead that it remains a tool for helping you do the things that will have the greatest benefit to your business first.

Think in terms of priorities, not tasks.
Entrepreneur and author Mike Michalowicz writes, “The problem with a to-do list is that every entry has the same value.” Instead, he suggests business owners should use a priority list that has the following three symbols (you can substitute alternative symbols if you like), to help prioritize activities: The dollar sign ($), which is assigned to any task that generates revenue in the next 60 days; a smiley face, which is assigned to any task that pleases a current client; and a ∞ symbol for any task that creates a system—something that can run itself thereafter ∞.

The key to this type of priority list is that you can assign more than one value to each activity—or you can assign nothing to an activity, which means you may want to consider dropping it completely from your list. When you use your priority list the items with the most symbols should be addressed first. Those tasks without symbols are your lowest priority.

Another way to make a priority list is to divide your tasks into the following four categories based on Stephen Covey’s iconic Important/Urgent grid: Important and urgent, Not urgent but important, Not important but urgent, Not important or urgent. Using this convention, you would prioritize tasks falling in the “important and urgent” category first and perhaps reduce or eliminate tasks in the “Not important or urgent” category.

Use your list to organize action, not delay it.
Many business owners do find that lists are an essential way to track the numerous things they need to accomplish on a daily basis. Whether you toss your traditional to-do list for one of the alternatives mentioned here, or keep it, be sure that the process you are using to create lists actually enhances your ability to take action efficiently—rather than being an end in and of itself.

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Top 10 Tips to Know if You Get a Letter from the IRS

Top 10 Tips to Know if You Get a Letter from the IRS

The IRS mails millions of notices and letters to taxpayers each year. There are a variety of reasons why we might send you a notice. Here are the top 10 tips to know in case you get one.

1.    Don’t panic. You often can take care of a notice simply by responding to it.

2.    An IRS notice typically will be about your federal tax return or tax account. It will be about a specific issue, such as changes to your account. It may ask you for more information. It could also explain that you owe tax and that you need to pay the amount that is due.

3.    Each notice has specific instructions, so read it carefully. It will tell you what you need to do.

4.    You may get a notice that states the IRS has made a change or correction to your tax return. If you do, review the information and compare it with your original return.

5.    If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment.

6.    If you do not agree with the notice, it’s important for you to respond. You should write a letter to explain why you disagree. Include any information and documents you want the IRS to consider. Mail your reply with the bottom tear-off portion of the notice. Send it to the address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

7.    You won’t need to call the IRS or visit an IRS office for most notices. If you do have questions, call the phone number in the upper right-hand corner of the notice. Have a copy of your tax return and the notice with you when you call. This will help the IRS answer your questions.

8.    Always keep copies of any notices you receive with your other tax records.

9.    Be alert for tax scams. The IRS sends letters and notices by mail. The IRS does not contact people by email or social media to ask for personal or financial information.

10.    For more on this topic visit IRS.gov. Click on the link ‘Responding to a Notice’ at the bottom left of the home page. Also, see Publication 594, The IRS Collection Process. You can get it on IRS.gov/forms at any time.

Tax Topic 651 – Notices – What to Do
Tax Topic 653 – IRS Notices and Bills, Penalties and Interest Charges
Understanding Your CP2000 Notice

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Tax Day 2015 is Gone. Time to Ask These Three Questions.

Yes, Tax Day has come and gone for this year, but the memory of your tax return is likely still fresh. So before you move on, consider the following three questions that may point you toward areas you want to work on before next April 15 rolls around.

Do I need to start my tax filing earlier?
Ideally, you should engage in tax planning year-round. As your trusted advisors, we can help you identify tax savings strategies throughout the year, so set up an appointment to talk to us about how we can help you mitigate tax obligations and make sure that you are taking full advantage of the tax savings available to you.

It’s also worth noting that the introduction of new tax reporting requirements related to the Affordable Care Act added considerable complexity to many individual returns this year. This, combined with delays in receiving tax documents from employers and other entities compressed the amount of time available to file returns. For the future, this means that the earlier you start getting your tax documents in order the more likely it is that your return can be filed promptly. The best strategy is to file (or better yet scan and electronically store) your receipts and any other documents you’ll need at tax time as they come in to avoid having to rush to meet tax deadlines.

Does my tax withholding need an adjustment?
Once you are done filing your taxes, the answer to this question becomes quite obvious. If you found yourself in the position of writing a large, unanticipated check to the United States Treasury Department, you may wish to look at how much tax you are withholding through your employer. Or, if you are self-employed, you should consider increasing your estimated tax payments. On the other hand, if you are receiving a big tax refund, you may want to consider reducing your withholding or estimated tax payments to increase your take-home pay or to fund additional investments in eligible tax-sheltered retirement savings plans.

Is my retirement strategy effective?
On the topic of retirement savings plans, your tax return clearly shows whether you made the maximum allowable contribution to tax-advantaged retirement savings accounts. If you didn’t in the 2014 tax year, you may want to consider increasing your contributions now so you can reduce your taxable income on next year’s return while also improving your financial future.

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Control the Clutter! 5 Tips to Create a More Organized Life

If compiling all of your tax documentation this year triggered the thought that you really should try to be more organized, then the following tips are for you. Constantly searching for things you have misplaced, missing important dates, and not feeling like you have control over your days can waste your time and increase your stress level.

The following tips will help you take manageable steps toward strengthening your organizational skills, helping you feel less overwhelmed in the process:

1. Modify your mindset. While we often focus on the external tasks associated with becoming more organized, the first step you should take is to shift your mindset so you become committed to making changes that improve the way you function and how you manage your time and resources.
   
   
2. Create structure that works for you. Many problems related to disorganization are actually caused by a lack of structure. If the thought of a schedule makes you uncomfortable, think about applying this concept only to those areas of your life that need it most, such as your morning routine and the parts of your workday where you tend to get distracted. Start by breaking down the time you want to manage more effectively into 15- or 30-minute increments for completing specific tasks.
   
   
3. Identify your trouble zones. It’s likely that you are more organized in some areas of your life than others. Make a plan to tackle the places that give you the most trouble, such as your car or desk. Pick a specific day of the week or month to clean these areas and then use the “place for everything” mantra to keep them organized.
   
   
4. Compartmentalize the clutter. If you regularly spend time searching for keys, documents, and other items, it can make you very frustrated. The remedy for this problem is simple, but it does take some effort: A) Create specific places for all of the things you use daily. B) Set up designated places for your phones and chargers, hooks to hang your keys, and baskets to hold kids’ and adults’ miscellaneous items.
   
   
5. Technology can help. Digital tools can support you in your organization efforts and help you maintain the progress you make. Reducing or eliminating your paper trail by scanning and securely storing documents is just the beginning. For example, our firm offers you a convenient way to organize, exchange, and streamline key financial documents using a secure online portal on our website. There are also many smartphone apps you can use to create task lists and reminders to help you ensure that you know what needs to get done and that it fits into your newly implemented schedule.

The tips above offer a good starting point to become more organized, but it’s up to you to find the motivation and tools that fit your lifestyle and your long-term goals. Instead of trying to tackle all areas of your life at once, start with the areas that you can tackle relatively easily when you begin—such as organizing your desk or creating a place to hang your keys. Taking just a few small steps toward streamlining your routine will go a long way in helping you feel calmer and more in control.

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Keep Safe with These Spring Break Travel Tips

If you’re planning to travel this spring break, you have likely already spent time planning your trip—but have you spent time thinking ahead about how to reduce the chances of a mishap while you’re traveling? While no one wants to ruin their vacation worrying excessively, it is wise to take a few preventative steps to ensure that your time away is not marred by an easily preventable mishap. Check out these tips to keep you safe during your spring break travel:

1. Know the places you should avoid. Spend some time before you leave on your trip to learn as much as you can about the place you are going and any areas or activities that may be unsafe so you can avoid them.
2. Pack for function, not flash. It is best to avoid bringing anything that’s flashy or expensive (such as jewelry and cameras) on vacation to avoid being targeted by thieves. Instead of carrying large quantities of cash, use ATM’s (in well-lit public areas) to replenish if you need to. If you take credit cards, take only the ones you plan to use and make photocopies of the front and back of them to leave with someone at home. This will make it much easier to cancel your cards if they are lost or stolen while you are away.
3. Post your plans and pictures after your vacation. While it’s tempting to post about your vacation plans prior to your departure and share pictures from your trip in real time on social media, for safety’s sake, you should wait until you are home to do so. To avoid giving thieves clues that your home would be an easy target for a break-in.
4. Pack for emergency preparedness. Unfortunately, illness and injury do not take vacations—so you should be prepared for them, just in case. Consider whether you need any additional medical insurance while you are away and bring clearly labeled pain and fever relievers and any prescription medications you may need in your purse or carry-on luggage. It’s also a good idea to bring the name and number of your family physician and a travel-size first aid kit with you.
5. Have fun, but stay alert. While you definitely want to enjoy your trip, keeping alert and being aware of your surroundings will help you avoid unsafe situations. When traveling with children, discuss with them what to do if they get separated from you while away from home.


For many of us, a vacation offers the perfect opportunity to relax and enjoy time away from the regular routine. By exercising common sense and using the tips above, you’ll reduce your risk of any safety mishaps while you are away.

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Tax Amnesty Program for Qualified Massachusetts Taxpayers

Tax Amnesty Program for Qualified Massachusetts Taxpayers

Sixty-day tax amnesty program to begin March 16

(Boston, MA) – The Massachusetts Department of Revenue (DOR) today announced a 60-day amnesty program authorized by the Legislature designed to encourage the payment of delinquent taxes. The amnesty program will run from March 16 through May 15 and applies to certain tax liabilities billed on or before January 1, 2015.

Approximately 24,000 qualifying taxpayers will receive a Tax Amnesty Notice from the Department of Revenue this week notifying them that they qualify for the tax amnesty program. Notices will include individual period balances, the amount of unpaid penalty to be waived if the amnesty balance is paid in full by the due date and the amnesty amount due. Taxpayers who qualify for the amnesty program have already been billed by DOR for their outstanding tax liability. Under the program, DOR will waive all assessed, unpaid penalties for taxpayers who respond by making a full payment on all outstanding taxes and interest for any period listed on the notice by the May 15 deadline.

“This is an opportunity for taxpayers who are delinquent on their taxes, and were not included in the 2014 amnesty, to step up and pay their tax debt to support critical government services,” said Commissioner Amy Pitter. “These taxpayers can catch up and pay their fair share without additional penalties.”

The amnesty program covers a variety of eligible tax types not included in the amnesty program completed in October, 2014 such as corporate excise (including financial institutions, insurance, public utilities, and banks), estate taxes, fiduciary income taxes and individual use tax on motor vehicles.

Qualifying taxpayers may pay the amnesty balance through DOR’s online services by making electronic payments using a credit card or electronic withdrawal from a checking or savings account. A taxpayer may choose to pay by check but must enclose the payment coupon attached to the amnesty notice and postmark the mailing by May 15, 2015.

Taxpayers who have entered into a payment agreement with DOR prior to the start of the amnesty period will qualify to participate, as will taxpayers with pending appeals who withdraw their appeals. The amnesty will not be extended to taxpayers who have already paid outstanding taxes and interest and only owe penalties, taxpayers who have signed settlement agreements or taxpayers who are the subject of a tax-related criminal investigation or prosecution.

Taxpayers who participate in the amnesty program waive their rights to a refund of any amounts paid as a result of the amnesty program and waive their rights to contest liability for any amounts included in the amnesty. Taxpayers who participate in this program will not be eligible for any future tax amnesty programs for 10 years.

Corporate taxpayers must be in compliance with the Massachusetts Secretary of State’s filing requirements to be eligible.

Taxpayers with outstanding tax obligations not covered by the tax amnesty, that may be facing economic hardship, should communicate with DOR as soon as possible. “A payment agreement may be a very good option for taxpayers who are experiencing economic difficulties,” said Commissioner Pitter. “Agreeing to a realistic monthly amount based on the taxpayer’s economic circumstances is beneficial to the taxpayer and DOR.”

DOR has set up a webpage with specific information about the amnesty including a Technical Information Release and Frequently Asked Questions at www.mass.gov/dor/amnesty. Taxpayers may also call DOR Customer Service at 617-887-6367 or toll free in Massachusetts at 800-392-6089.

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IRS Offers Small Businesses Limited Relief for Health Coverage Reimbursement Arrangements

Some health coverage reimbursement arrangements offered by small employers (those with less than 50 full-time employees) are considered by the IRS to be non-compliant with the health coverage plan requirements set forth in the Affordable Care Act (ACA). Beginning January 1, 2014, employers who offer such plans were facing a significant penalty: an excise tax of $100 per employee per day, up to an annual maximum of $36,500 per employee. Employers should breathe a sigh of relief, however, because on February 18, 2015, the IRS issued notice 2015-17, which provides relief from this excise tax with the following provisions:

1. Transitional tax relief for employers who reimburse for health insurance premiums but do not have ACA qualifying plans. These employers now have until June 30, 2015 to change their plans to ACA qualifying plans without penalty. Alternate arrangements that reimburse employees for medical expenses, rather than for premiums only, do not qualify for this relief. In addition, employers covered by this exemption are not required to file Form 8928, regarding failures to satisfy requirements for group health plans, including market reforms, with their 2014 tax return.
   
   
2. Temporary tax relief for employers with S-Corp plans that reimburse more-than 2% shareholder employees for health insurance premiums. Essentially, these plans are still in violation of the ACA, but the IRS has yet to issue guidance for this type of situation so until further notice (likely until the end of 2015), these employers will have tax relief. S-Corp shareholders will continue to have health insurance premiums included in their gross wages, while receiving a deduction for self-employed health insurance and the IRS will not assert the Section 4980D penalty on S corporations that reimburses the insurance premiums of a more-than 2% shareholder.
   
   For S corporations maintaining more than one reimbursement arrangement for different employees (regardless of whether they are more-than 2% shareholders), the various arrangements are treated as a single arrangement covering more than one employee. The S corporation will then be classified as conducting a group plan, rather than a single employee plan, and will be subject to the penalty when transitional relief expires. An important note: Notice 2015-17 exempts S corporations with only one employee from market reforms.
   
   
3. Employers may keep their non ACA compliant health insurance reimbursement arrangement and give employees a raise instead of reimbursing them for health insurance premiums. If an employer opts to keep their existing non-ACA compliant plan instead of establishing a qualifying group plan, the only way to avoid penalties is for the employer to increase the salary of each employee which will be subject to increased income and payroll taxes. Importantly, an employer can in no way condition that the increased salary is dependent on an employee obtaining health insurance. An employee must be able to use their increased compensation at their discretion.

While Notice 2015-17 does offer some relief to businesses from the tax impact of the ACA, it is important to keep in mind that this relief is only temporary and that the IRS will be providing further clarification in the future. It is a good idea for employers to take this window of opportunity to review their employee healthcare plans and method of funding in order to make any adjustments necessary to avoid penalties. If you have additional questions, please contact our office, we are happy to help you.

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Don’t Be a Victim! Beware of Scams Targeting Taxpayers This Tax Season

With the rise of identity theft and tax and financial fraud, it is critical that we all remain vigilant about protecting our sensitive personal and financial information—especially during tax season. Being alert to any attempts by criminals to intercept your information is one important way you can protect yourself. The IRS recently issued the following alerts about a new crop of tax season scams. Take a few moments to review this information to keep yourself safe from scammers looking to target taxpayers.

1. An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, is making the rounds throughout the country. According to the IRS website, callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
   
   

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are threatened with arrest, deportation, or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Alternatively, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.
   
   The IRS urges taxpayers to note that they will never: 1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill; 2) demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe; 3) require you to use a specific payment method for your taxes, such as a prepaid debit card; 4) ask for credit or debit card numbers over the phone; or 5) threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
   
   
2. Be on guard against “phishing”—fake emails or websites looking to steal personal information. The IRS will not send taxpayers emails about a bill or refund without contacting them by mail first. Don’t click on an email link claiming to be from the IRS unless you are expecting the IRS to send you an email based on previous contact you have had with them.
   
   
3. Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security Number. The IRS is making progress on this front, but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.
   
   
4. Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. If you want to contribute to a charity, take a few extra minutes to ensure that the organization in question is actually a currently eligible charitable organization. Be especially wary of charities with names that are similar to familiar or nationally known organizations.

These are just some of the current tax season scams that you should be aware of. You can visit the IRS website to see additional scam alerts. If you have any questions, or you encounter any suspicious activity related to your financial or tax information, contact our office. We are committed to helping you protect yourself and your financial health.

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IRS Completes The "Dirty Dozen" Tax Scams for 2015

WASHINGTON — The Internal Revenue Service wrapped up the 2015 "Dirty Dozen" list of tax scams today with a warning to taxpayers about aggressive telephone scams continuing coast-to-coast during the early weeks of this year's filing season.

The aggressive, threatening phone calls from scam artists continue to be seen on a daily basis in states across the nation. The IRS urged taxpayers not give out money or personal financial information as a result of these phone calls or from emails claiming to be from the IRS.

Phone scams and email phishing schemes are among the "Dirty Dozen" tax scams the IRS highlighted, for the first time, on 12 straight business days from Jan. 22 to Feb. 6. The IRS has also set up a special section on IRS.gov highlighting these 12 schemes for taxpayers.

"We are doing everything we can to help taxpayers avoid scams as the tax season continues," said IRS Commissioner John Koskinen. "Whether it's a phone scam or scheme to steal a taxpayer's identity, there are simple steps to take to help stop these con artists. We urge taxpayers to visit IRS.gov for more information and to be wary of these dozen tax scams."

Illegal scams can lead to significant penalties and interest for taxpayers, as well as possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them. Taxpayers should remember that they are legally responsible for what is on their tax returns even if it is prepared by someone else. Make sure the preparer you hire is up to the task. For more see the Choosing a Tax Professional page.

For the first time, here is a recap of this year's "Dirty Dozen" scams:

Phone Scams: Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season. (IR-2015-5)

Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS that takes you by surprise. Taxpayers should be wary of clicking on strange emails and websites. They may be scams to steal your personal information. (IR-2015-6)

Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. The IRS is making progress on this front but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim. (IR-2015-7)

Return Preparer Fraud: Taxpayers need to be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns. (IR-2015-8)

Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and getting their taxes and filing requirements in order. The IRS offers the Offshore Voluntary Disclosure Program (OVDP) to help people get their taxes in order. (IR-2015-09)

Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds. Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records, or charge fees based on a percentage of the refund. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims. (IR-2015-12)

Fake Charities: Taxpayers should be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. Be wary of charities with names that are similar to familiar or nationally known organizations. (IR-2015-16)

Hiding Income with Fake Documents: Hiding taxable income by filing false Form 1099s or other fake documents is a scam that taxpayers should always avoid and guard against. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer. Taxpayers are legally responsible for what is on their returns regardless of who prepares the returns. (IR-2015-18)

Abusive Tax Shelters: Taxpayers should avoid using abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2015-19)

Falsifying Income to Claim Credits: Taxpayers should avoid inventing income to erroneously claim tax credits. Taxpayers are sometimes talked into doing this by scam artists. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return. (IR-2015-20)

Excessive Claims for Fuel Tax Credits: Taxpayers need to avoid improper claims for fuel tax credits. The fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers. But yet, the IRS routinely finds unscrupulous preparers who have enticed sizable groups of taxpayers to erroneously claim the credit to inflate their refunds. (IR-2015-21)

Frivolous Tax Arguments: Taxpayers should avoid using frivolous tax arguments to avoid paying their taxes. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2015-23)

Additional information about tax scams is available on IRS social media sites, including YouTube http://www.youtube.com/irsvideos and Tumblr http://internalrevenueservice.tumblr.com, where people can search “scam” to find all the scam-related posts.

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Four Easy Ways to Energize Your Employees

February can be a tough month when it comes to motivation and energy levels for many people. So it’s not surprising that employees may seem a little less productive at this time of year. Fortunately, the following four tips can help you put the spring back in your team’s step—and boost the productivity of your business.

Keep Sharing Your Vision
People want to have a goal to which they can aspire—and a shared vision of where your business is going can be a strong motivational force. By sharing your vision and reminding your team periodically about the important role they play in it, you can energize your workforce.

Stop Hovering
If you tend to micromanage, try stepping back and letting your employees’ creativity and morale soar. Unless you have new team members who really do need handholding, your employees will feel much more empowered if you simply let them do what you hired them to do.

Offer Ongoing Education
When it comes to energizing your team, providing periodic learning opportunities is key. Giving employees the chance to sharpen their skills will not only improve your business, but your willingness to invest resources in staff development will also elevate your employees’ enthusiasm for doing their best work.

Spread the Love
Encouragement is a powerful elixir for increasing employee engagement. Everyone wants to be recognized and appreciated for the work they do. Be sure to recognize people on your team, even informally, as often as possible.

Don’t let the post-holiday doldrums dampen the spirits or productivity of your team. Try implementing these tips to energize your employees—and your business.

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YES WE ARE OPEN!

Thank goodness it does not snow on Cape Cod!

The second blizzard of the winter will not stop us. We are plowed out and open for business.

Stop by and enjoy coffee or tea and warm up by the fireplace.

Drive carefully and be safe everyone.

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Keep This, Not That—Which Documents Should You File and Which Should You Toss After Tax Season?

If there’s one time of the year that may inspire you to finally come up with a filing system for all of your bank statements, receipts and other important documents, it’s tax season. Not only will keeping your documents organized make it easier and less stressful for you to find what you need on a daily basis (and when you are getting ready to have your taxes prepared), it will also ensure that if something happens to you, your loved ones will be able to quickly find essential information about your finances and other relevant items.

One of the major challenges that many people encounter when they start going through their documents is knowing what they should keep and for how long. The following list from Consumer Reports may help you determine what to keep and what to toss (remember to shred all sensitive documents before you put them in the recycling bin or trash) once tax season is over:

Documents to keep for a year or less

• Bank records: Keep deposit and ATM receipts until you reconcile them with your monthly statements. File your monthly checking and savings account statements. After you do your taxes, file any statements needed to prove deductions with your tax records; the rest can be shredded.
• Credit-card bills: Shred them after you've checked and paid them, unless you need a bill to support a deduction you'll be taking on your taxes, such as for a charitable donation (in which case you'll need to file the bill with your current-year tax records).
• Current-year tax records: Keeping your records organized can save you headaches and money at tax time. Place documents you'll need for your next return in a file.
• Insurance policies: Keep policies that you renew each year, such as those for your home, apartment, or car, until you get new policies, then shred the old ones.
• Investment statements: You can shred your monthly and quarterly statements from brokerage, 401(k), IRA, Keogh, and other investment accounts as new ones arrive. But hold on to annual statements until you sell the investments.
• Pay stubs: Keep the calendar year's records until you reconcile them with your annual W-2 form, then shred them.
• Receipts: If you're not doing anything with your receipts—like tracking your spending, itemizing tax deductions, or using them to return purchases—you don’t need to keep them.

Documents to keep for at least a year

• Investment purchase confirmations: You will need these to establish your cost basis and holding period when you sell investments. If this information appears on your annual statements, you can keep those instead of quarterly or monthly statements. Store the records until you sell the investments, at which time you should move the back-up records into that year's tax-return file.
• Loan documents: Keep closing documents for mortgage, vehicle, student, and other loans in a safe-deposit box. You can dispose of them after the loan is paid off.

Documents to archive for seven years

• Personal federal and state tax returns and their supporting records: These documents must be kept for at least seven years. Remember, your returns can be audited by the IRS up to three years after the date you filed the return. If you fail to report more than 25 percent of your gross income, the government has six years to collect the tax or start legal proceedings—and you can be audited at any time if the IRS suspects you of fraud.
• Tax records: If they are more than seven years old, tax records can be stored—or even better scanned—for your records.

Documents to keep indefinitely

• Essential records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept in a safe-deposit box.
• Permanent life insurance: Policies that have a cash value or investment component—keep documents and a list of the companies that issued them and their phone numbers in your safe-deposit box. If you have a term life policy, hold the documents until the term is over, then toss them.
• Pension-plan: Documents from your current and former employers and estate-planning documents including wills, trusts, and powers of attorney should also be stored in your safe-deposit box.

If you’ve already instituted a filing system for your key documents, kudos to you. If you haven’t, now is the perfect time to do so. If you have any questions about which financial records you need to keep or which ones you can safely dispose of, please let us know, we are happy to help.

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1099 Filing Requirements

What are the Form 1099 Filing Requirements?

The IRS works constantly to improve income reporting by taxpayers. One tool they employ is requiring businesses to file “information returns” that tell the IRS about amounts the business paid out that should be reported by the recipients as income.

Probably the most familiar of these information returns is the Form W-2 which reports wages paid to employees. Another information return is Form 1099, which is actually a group of more than a dozen different forms that report other types of income to the IRS.

Recently the IRS ramped up its compliance efforts by asking businesses to answer questions about their 1099 filings when they file their income tax returns. This added IRS scrutiny, coupled with steep noncompliance penalties, make it important for every business to check their 1099 filing requirements each year.

Here’s what you need to know about Form 1099 and the filing requirements your business may have.

1099-MISC - The Major Business Form

Form 1099-MISC is the form most frequently used by small businesses to report a wide variety of payments, and it is probably the 1099 that causes the most confusion. Here’s what you need to know.

A Form 1099-MISC is used to report payments for services provided to your business by unincorporated vendors when those payments total $600 or more for the year. Typical payments include rents, royalties, and compensation to independent contractors, such as consultants, web designers, accountants, lawyers, and cleaning services.

The IRS has set out five conditions for payments that must be reported using Form 1099-MISC. All of the following five conditions must
be met:

The payment was made to a nonemployee.
The payment was made for services provided to the trade or business.
The payment was made to an unincorporated entity (except for payments to attorneys and medical and health care payments).
The payment or payments generally totaled $600 or more for the year.
The payment was not made electronically (e.g., with a credit or debit card or with PayPal).
Deadlines - When You Must File

January 31 – One copy of the Form 1099 must be given to the recipient of the payment by this date of the year following payment.

February 28 – One copy of the Form 1099 must be sent to the IRS by this date of the following year unless the filing is done electronically.

Penalties - A Matter of Intent

The penalties for failing to file Forms 1099 range from $30 to $250 per form, depending on how late your filing is and whether or not the failure to file was intentional. Total penalties can go as high as $500,000 for businesses with gross receipts under $5 million or $1.5 million
for those with gross receipts over $5 million.

Please contact us if you have any questions.

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Due to the anticipated snow storm, the office will be closed on January 27-28, 2015

In anticipation of the impending historic blizzard all appointments scheduled for January 27 and 28 are cancelled. Please contact the office to reschedule your appointments.

Please take proper precautions to prepare for this storm.

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Ten Tax Changes That May Impact Your 2014 Tax Return

Tax season is here, and there are many tax changes that were implemented in 2014 and more to be introduced in 2015. From Obamacare to tax hikes and changes to standard deductions, there's a lot to keep track of. To help you get organized for this tax season and beyond, review this summary of some of the most significant tax issues and changes.

Obamacare Penalties Kick In
The Obamacare individual mandate goes "live" this tax season. The mandate requires that consumers purchase health insurance or face a penalty of $95 or 1% of their annual income, whichever is greater. The penalty is $47.50 per child, up to $285 for a family.

Changes to FSAs
2014 was a big year for health care-related tax changes. If you take advantage of a Flexible Spending Account (FSA) to help pay for future medical expenses with pretax dollars, you should note that in 2014 Congress made a change so that if you carry over funds (up to the $500 maximum carry over limit) into 2015, you will be disallowed from participating in an HSA in 2015.

Flexible Spending Account Limits
The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. That's up $50 from 2014, so make sure you opt in for this new maximum amount if you take advantage of a health care FSA.

Only One Annual IRA Rollover is Allowed
Up until now, individuals could use tax-free rollovers for each of their IRA's. Starting in 2015, only one tax-free IRA rollover will be allowed for a period of one year for any number of IRA accounts. This includes SEP, SIMPLE IRA's, Roth, and Traditional IRAs.

Income Tax Rate Changes
The American Taxpayer Relief Act of 2012, or ATRA, added a seventh federal income tax bracket (39.6%) in 2013, while the remaining six rates were unchanged. In 2014, taxable incomes above the following thresholds now fall into the 39.6% bracket: Married Filing Separately ($228,800), Unmarried Individuals ($406,750), Head of Household ($432,200), and Married Filing Joint Returns ($457,600).

Unified Credits, Gift Tax and Estate Tax

Additionally, ATRA increased the estate and gift tax rate from 35 to 40%. The gift tax and estate tax exclusion continue to be indexed for inflation and increase to $14,000 and $5.34 million respectively in 2014.

Standard Deduction Increases

The standard deduction—that is, the basic tax break extended to all Americans rises this year to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. That's up $100 and $200, respectively, from 2014 figures.

Tax Bracket Adjustments
For the new tax year starting in January, income tax thresholds have again been adjusted up for inflation. The highest tax rate of 39.6%, for instance, will now apply to single filers who make over $413,200 and married couples making $464,850. Both figures are up about 1.6% from tax year 2014. For more information on specific income tax brackets by filing status, check out the latest IRS revenue procedure document.

AMT Changes
The so-called "alternative minimum tax" is quite a headache for many middle-class Americans. Since certain breaks can significantly reduce your tax bill, the IRS created the AMT to set a limit on those benefits and ensure a minimum tax burden on you. The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 for individuals or $83,400 for joint filers. That's up slightly, about 1.5% from 2014.

Social Security and Medicare
As was the case in the past, all wages earned in a given year are taxed at the 1.45% rate for Medicare. On your 2014 tax return, wages paid in excess of $200,000 for Unmarried filers and in excess of $250,000 for Married filers will be subject to an extra 0.9% tax. The Social Security tax rate remains at 6.20%, while the wage limit, or Social Security maximum, increases from $113,700 to $117,000. The Cost of Living Adjustment (COLA) was 1.5% in 2014, raising the SSI limit to $2,642 per month.

With so many tax changes instituted last year and more coming this year, it is likely that you will notice the impact of several of them..Please be sure to contact us with any questions. We look forward to helping you.

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Tips for Achieving Your Financial Goals This Year

With 2015 just around the corner, it’s smart to take a few minutes to plan ahead for the coming year in terms of the goals you want to achieve. If managing your money more effectively in the year ahead is one of the things you want to tackle, it helps to break your goal down into manageable steps.

Figuring out your financial plan comes down to three essential steps: managing, growing, and protecting your money. Here are some tips to help you succeed in these three areas of your financial life.

1. Managing your money. If you can't figure out how to earn more, spend less, save more, and pay down debt, you won't have the assets you need to grow your wealth. From recent college graduates to baby boomers near retirement, learning how to live on less than you make, borrowing money and using credit responsibly, and saving money for unexpected situations are critical steps you must take.

2. Growing your money. When it comes to saving and investing, it’s never too early, or too late, to start. By putting money aside each month and investing it wisely, you can grow your money to help pay for your child's education, buy your first home or a vacation home, and fund your retirement. It may be helpful to talk to a financial professional to make sure your investment strategy is sound.

3. Protecting your money. Getting up to speed on the best retirement and tax and estate planning practices can make all the difference in being able to retire on your terms and leave a positive financial legacy for your loved ones. Federal income taxes can be a family's greatest annual expense, underscoring the importance of strategic tax planning. Knowing your tax liability before the annual April 15th deadline is critical to your overall financial plan, so get in touch with our office if you have any questions in this regard.

In addition, careful estate planning can prevent confusion and chaos for your family when you're gone. So make sure you have a will and a clearly articulated plan for how your assets should be handled in the event of your passing.

Being proactive about managing, growing, and protecting your money and other assets this year may be one of the best New Year’s resolutions you can make—paying dividends to you well beyond 2015. If you need any assistance putting your financial plans into action, please contact our office—we are happy to help you.

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IMPORTANT CHANGES TO THE MASSACHUSETTS MINIMUM WAGE

IMPORTANT CHANGES TO THE MASSACHUSETTS MINIMUM WAGE
In accordance with An Act Restoring the Minimum Wage and Providing Unemployment Insurance Reforms Chapter 144 of the Acts of 2014

Effective January 1, 2015

MINIMUM WAGE: $9.00 PER HOUR
The minimum wage law applies to all employees except those being rehabilitated or trained in charitable, educational, or religious institutions; members of religious orders; agricultural, floricultural, and horticultural workers; those in professional service; and outside salespersons not reporting to or visiting their office daily. See M.G.L. chapter 151, §§1 and 2. For further information regarding the Massachusetts state minimum wage, contact the Massachusetts Department of Labor Standards at (617) 626-6952 or visit www.mass.gov/dols.
In no case shall the Massachusetts minimum wage rate be less than $0.50 higher than the effective federal minimum rate.

SERVICE RATE: $3.00 PER HOUR
Wait staff, service employees and service bartenders may be paid the service rate if they regularly receive tips of more than $20 a month, and if their average hourly tips, when added to the service rate, are equal to or exceed the basic minimum wage. See M.G.L. chapter 151, §7.

AGRICULTURAL RATE: $8.00 PER HOUR
Work on a farm and the growing and harvesting of agricultural, floricultural and horticultural commodities requires payment of no less than the above-listed rate per hour, except when such wage is paid to a child seventeen years of age or under, or to a parent, spouse, child or other member of the employer’s immediate family. See M.G.L. chapter 151, §2A.

Effective January 1, 2016:
• Minimum Wage shall be $10.00 per hour
• Service Rate shall be $3.35 per hour (provided service employee receives tips of more than $20 per month and if his/her average hourly tips, when added to the service rate, equals $10.00 per hour).

Effective January 1, 2017:
• Minimum Wage shall be $11.00 per hour
• Service Rate shall be $3.75 per hour (provided service employee receives tips of more than $20 per month and if his/her average hourly tips, when added to the service rate, equals $11.00 per hour).

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Christmas and New Year Schedules

All Clients:

Re: Christmas and New Year Schedules

Due to banking regulations and the upcoming holidays, we are unable to process your payroll checks in our normal timeframe.

As a result of these banking regulations and in order to process your payroll in the timeframe provided, we will need your payroll information by 3:00 on Friday, December 19, 2014 and also Friday, December 26, 2014.

We will be unable to process any direct deposits or ensure on-time paycheck deliveries, if your payroll is received after the cut-off time. We are sorry for any inconvenience this causes.

For other arrangements, please contact our office at (508) 896-3377.

The office will be closing at noon on Wednesday, December 24th, and all day Thursday, December 25th. We will also be closed on Thursday, January 1, 2015.

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Give Yourself a Last Minute Gift: Year End Tax Planning

It’s the most wonderful time of the year—and for many of us, it is also one of the busiest. While adding one more thing to your to-do list—like year-end tax planning—may induce a feeling of overload, it really is one task you shouldn’t skip, because it can give you the gift of a lower tax bill next April.

Here are a few tips to help you end 2014 with the good feeling of knowing that you are in good shape for the coming tax season.

Act now to accelerate deductions and manage your income for the current year. Depending on what your income level is this year, you may want to defer some income (through investments or other tax-deferral vehicles) if you think it will help keep you from reaching a higher tax bracket or if your income will be near the thresholds for the additional Medicare tax ($250,000 if married and filing jointly; $200,000 if single; and $125,000 if married and filing separately). On the deduction side, you may be able to accelerate your state and local income tax payments, real estate taxes, interest payments, or business investments, so think about paying these obligations before next year is here so you can claim the deduction on your 2014 tax return.

Keep up with estimated tax payments. Having the dates for estimated tax payments on your calendar is important—including the fourth 2014 estimated tax payment due this January 15. By calculating this payment and the first one due for 2015 (April 15 next year) you will have a preliminary idea of what your tax liabilities will be, giving you an idea of how much you'll need to set aside to make these payments.

Check your withholding and estimated tax payments now while you have time to fix a problem. If you’re in danger of an underpayment penalty based on the calculations you made above, try to make up the shortfall now instead of waiting until your next tax payment. If you need assistance handling delinquent taxes or other tax issues, contact our firm for professional guidance.

Now is the time to apply for health care tax exemptions. If you do not have health insurance, the Affordable Care Act mandates that you must pay the "shared responsibility payment" with your federal taxes. Exemptions are available, however, the process to qualify for one (which must be approved by the Health Insurance Marketplace) can take several weeks. Now is the time to apply.

Maximize “above-the-line” deductions. Above-the-line deductions are valuable because you deduct them before you calculate your Annual Gross Income or AGI. They are allowed in full and make it less likely that your other tax benefits will be limited. Common above-the-line deductions include traditional IRA and health savings account (HSA) contributions, moving expenses, self-employed health insurance costs and alimony payments.

Make the most of retirement account tax savings. In addition to any 401(k) contributions you may make if you are employed, depending on your income, you may want to make contributions to other retirement accounts—or start one if you haven’t already. Traditional retirement accounts like an individual retirement account (IRA) still offer some of the best tax savings. Contributions reduce taxable income at the time that you make them, and you don’t pay taxes until you take the money out at retirement. The 2014 contribution limits for an IRA are $5,500 ($6,500 for those 50 years of age and older). If you have questions about your investment strategy and tax savings contact us for assistance.

With just a few weeks left in 2014, now is the ideal time to look at your current financial situation and plan for the future, in addition to starting to get your tax documentation in order. If you have any questions, please contact our firm—we are happy to help you.

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BREWSTER FOR THE HOLIDAYS - DECEMBER 5-7, 2014

We invite you to stop by our office tomorrow during our Holiday Open House from 10-1.

We will be selling wave ornaments, with all profits going to Cape Cod Cares for the Troops & Animal Rescue League of Boston.

Refreshments will be served.

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HAPPY THANKSGIVING !

Our office will close at noon today and reopen on Friday November 28, 2014 at 9:00 am.

We wish you a happy  and safe thanksgiving!

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Unique Ways to Share Your Gratitude This Thanksgiving

With Thanksgiving literally right around the corner, it’s the perfect opportunity to reflect on the abundance that we have in our lives and how we might express our gratitude to the people who mean the most to us.

If you are enjoying a gathering with family and friends this Thanksgiving, here are a few unique, fun activities from that can help you create an atmosphere of genuine gratitude during the traditional festivities.

Introduce the Annual Appreciation Awards at the end of your Thanksgiving feast. Make some fun, inexpensive turkey trophies and label them with an achievement accomplished by each guest, or give out awards based on why you’re thankful for each family member.

Make gratitude your secret ingredient. As your guests come in, have them write what they’re thankful for on small strips of parchment paper. Then lay each strip on top of store-bought crescent dough before rolling it up and baking. When dinner’s ready, your family and friends can read messages of gratitude out loud.

Share a jar of thanks. If you’re looking for a way to share gratitude with your immediate family, have each family member drop a note of gratitude into the jar each day leading up to Thanksgiving. Open the jar and read each note on Thanksgiving.

Create a Thanksgiving journal that expands each year. Pass a blank notebook around the Thanksgiving table each year and have your guests record what they are thankful for. You can then look back and see how your family has grown and changed throughout the years.

Our firm is thankful for the opportunity to serve the individuals and businesses in our community. We extend our best wishes for a safe and happy Thanksgiving to you.

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Five Things You Can Do to Reduce the Risk of Spreading Cold and Flu in Your Office

Late fall typically marks the beginning of cold and flu season, which can pose a real threat to businesses. While public health officials continue to push flu shots, the message isn’t inciting many people to act. Add to this those employees who are hesitant to take sick days, meaning they come to work and inadvertently spread germs, and the potential for a cold and flu outbreak heightens.

The impact such behaviors can have on businesses—especially small ones—is nothing to sneeze at. The website HealthyWorkPlaceProject.com, estimates a 25-employee company loses $33,000 every year to lost productivity, sick days, and temporary workers brought in to replace sick employees. So what can you do to keep your employees healthy? Here are five tips to reduce sickness in the workplace:

1. Advise sick workers to stay home. Keeping sick employees from becoming a drain on productivity often requires a company policy on illness—one that gives workers peace of mind that taking a sick day will not have a negative impact on their employment.
   
   
2. Encourage preventative care. Simply encourage employees to get vaccinated—in addition to other healthy habits such as eating well, exercising, getting plenty of rest, and proper sanitary practices for themselves and their work areas.
   
   
3. Remind employees to wash their hands often. Incorporating reminders into company emails, newsletters, and even signage can be a non-intrusive way of relaying the importance of hand washing.
   
   
4. Provide sanitizing products to keep workspaces clear of germs. Providing hand sanitizer, wipes, disinfecting sprays, and towels for employees to clean their desks and keyboards regularly will foster good sanitizing habits.
   
   
5. Plan for increased sick days during cold and flu season. If possible, prepare telecommuting options for employees who feel well enough to work, but who may be contagious. Unless they're laid low by a bad flu, most employees can work a little bit from home. This strategy can help slow or eliminate the spread of cold and flu during peak season.

Of course, it is unlikely that you and your employees will be able to escape illness altogether, so having a solid healthcare benefits plan in place is another smart strategy. If you have any questions about healthcare benefit options, contact our firm for assistance.

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Cape Cod Landscape Association

The Steven M. Ellard, CPA team is excited to participate in the 2014 Cape Cod Landscape Association Professional Education Seminar & Trade Show.

The event will take place Friday, November 14, 2014 at The Resort and Conference Center of Hyannis, located at 25 Scudder Avenue in Hyannis, from 9:00 AM until 4:00 PM.

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Reaping the Rewards: Tips for Implementing an Effective Employee Incentive Program

For some employees, the satisfaction of doing a great job is a reward in and of itself. However, for many companies, implementing a rewards program for employees is necessary in order to maintain employee morale and productivity. While investing time and money to develop and implement an employee incentive program may seem like an inefficient use of resources that detracts from your bottom line, if you look at the big picture, quite the opposite is true.

The cost of unhappy workers to a business can be extremely high. A recent Gallup survey estimates that this kind of unhappiness is costing employers $300 billion annually due to decreased productivity, including more sick days and lackluster operational results. To help you avoid these negative effects, here are a few points to keep in mind when creating a rewards program for your business.

Rewards should appeal to your employees—not just your company leadership. Creating a work environment that boosts happiness, productivity, and morale requires more than a few free doughnuts every now and then. It requires genuine recognition, meaningful feedback, training, and support. However, these things will only improve employee morale so much—after you’ve recognized the efforts and output of your employees, you’ll need to start building an effective rewards program. Doing so will show your employees that there is a system in place that encourages their engagement and productivity with tangible and intangible incentives they value.

Your rewards programs should be customized and tailored to your unique company. Incentives that work for one company might not necessarily work for another, so it’s important that you create a program that fits your company culture and reflects your employees’ interests. For example, if your organization is very health-minded, offering rewards that include a lot of unhealthy foods are not likely to be appealing. Instead, you may want to offer rewards such as free fitness facility memberships or branded company workout gear. In addition to tangible rewards for special achievements, you can also offer employees additional vacation days and the reward of peer recognition by publicly announcing in person or in a company publication the details of their accomplishments.

A key component of any rewards program is measurement. Keeping track of employee progress and who has received rewards is important not only so you know who has performed well, but also because it can actually motivate other staff members to up their game to reap the rewards being offered as well. Leaderboards, periodic email updates, and sharing staff achievements via social media or newsletters can be powerful ways to quantify and publicize the progress or your internal rewards program.

Implementing a solid employee rewards program not only encourages and motivates employees, it can also pay huge dividends in terms of improving productivity, your bottom line, and employee advocacy. If you’re considering offering rewards to your employees, you may also want to involve them in the process of shaping and implementing your incentive program—another easy way to show that you value your employees’ contributions to your company.

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Do Your Employees Know What Customer Service Means to You?

If you own a business, you know that your customers are its lifeblood, so customer service is key. While you may recognize this fact, it may not always resonate with your employees. So how do you ensure that all your hard work to win customers isn’t undermined by poor customer service when they come face-to-face with your employees—especially if you can’t always be there to supervise?

The following tips may also be useful in making your customer service consistent and truly exceptional:

Provide customer service resources. Give your employees clear instructions for creating and maintaining service superiority—a written customer service policy manual for example. If your employees are unclear how customers should be served, they need to have resources available to help them learn. You can also offer resources such as FAQs in your employee manual, a manager or supervisor who can be a customer service coach, and of course, reminders of your own vision, as the business owner, for how customers should be treated.

Develop and communicate benchmarks for superb customer service. Be certain that your employees know the specific behaviors that constitute exceptional service at your company. Don’t take it for granted that your team knows what good service is—or what you consider good service. Measurable benchmarks that indicate great service should also be identified and shared.

Share the good, and the not-so-good. Make your employees aware that because customer service is so important to your business, you monitor it closely and want to share with them how everyone can work to make sure customers have the best possible experience. Meet with your employees regularly to talk about improving service and to reward employees who practice great customer service. The sharing should also be a two-way endeavor, so solicit ideas from employees—after all, they are likely the ones who are dealing with customers most often.

Formalize the customer feedback process. While many businesses rely on anecdotal comments to judge whether they are doing a good job serving customers, it can be helpful to formalize the customer feedback process so you can track trends over time and quantify results against your goals. Obtaining regular feedback using surveys or other tools also helps to show your customers that you care and are listening to what they have to say. You may even get some great ideas to help improve your service or other areas of your business.

By defining and communicating what your company’s specific customer service standards and policies are, involving your employees in the process, and quantifying the results of your efforts, you’ll have peace of mind knowing that everyone on your team is consistently “wowing” your customers with exceptional service.

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Columbus Day Holiday

Our office will be closed for Columbus Day on Monday, October 13, 2014.

Regular office hours will resume on Tuesday, October 14, 2014.

Have a safe and happy Columbus Day !

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Is Your Business Prepared for the Next Phase of Obamacare?

In just a few short months, the calendar will read 2015—the year in which the next phase of the Affordable Care Act, known as Obamacare, will kick in for businesses with 100 or more employees. Under the law, businesses with 100 or more employees on their payroll will need to start providing health benefits to at least 70 percent of their full-time workers in 2015, and to 95 percent by 2016. Companies that fail to meet these targets will be subject to penalties that start at $2,000 per employee. Businesses with 50 to 99 full-time employees will need to start insuring workers by 2016.

One area of these new regulations that business owners need to be clear about is the Obamacare definition of a full-time employee: 30 hours a week or more, versus the historic 40-hour week recognized by other federal and state laws. Obamacare also requires employers to collect signed waivers from employees who opt not to sign on to a company insurance plan. Even if an employer opts not to offer insurance, they are still required to file forms to substantiate the number of full-time and part-time workers they employ.

The required documentation means that businesses need to be prepared to monitor their employees’ hours—especially part-time employees—to make sure that they don't average more than 30 hours a week. Employers must also have a process in place for documenting that they have offered coverage to their full-time workers.

The penalties for non-compliance with the next phase of Obamacare may be significant, so it pays to prepare now. Companies with 100 or more employees that don't offer coverage may be liable for fines of $2,000 and $3,000 per worker next year. This penalty will apply for businesses with 50 or more employees in 2016.

Businesses that fall under the new mandate should also be aware that if any one of their employees receives a premium tax credit from the Obamacare insurance marketplace because the coverage they offer is deemed unaffordable or does not cover 60 percent of total costs, the employer must pay a Shared Responsibility Payment of either $3,000 for each employee getting a credit or $750 for each of their full-time employees, whichever is less. Under the Obamacare law, insurance is considered unaffordable if an employee's share of the premium costs for employee-only coverage (not the entire family) is more than 9.5 percent of their yearly household income.

It’s clear that the next phase of Obamacare brings with it some considerable new responsibilities for business owners. Adding preparation for these new mandates on to your year-end planning list will help you avoid penalties and start 2015 off right. If you have questions about Obamacare and how it will affect your business, please contact our firm for assistance.

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MA TAX AMNESTY PROGRAM - SEPTEMBER & OCTOBER 2014

What You Need to Know About the Tax Amnesty Program

A provision in the FY15 Massachusetts state budget establishes a tax amnesty program for two consecutive months during the 2015 fiscal year for certain tax types.

What is this tax amnesty program?

When you don’t pay your taxes in full when they are due, interest and a variety of penalties continue to be assessed until payment in full is received by the DOR. If you qualify for this tax amnesty and pay your taxes and interest in full, the Department will waive all associated penalties.

What are the dates for the tax amnesty program?

The tax amnesty will take place during the months of September and October, 2014.

How do I participate?

Tax amnesty notices showing the tax and interest due, along with the penalties to be waived, will be mailed in early September to taxpayers who qualify. If you pay the tax and interest shown on the bill on or before October 31, 2014, the Commonwealth will waive the unpaid penalties for the period. Please note that the amnesty only applies to assessments that were on the books on or before July 1, 2014.

What types of taxes are eligible?

Personal income tax and most non-corporate business taxes are included in the program. For a complete listing of all eligible taxes see TIR 14-8 .

How do I pay?

There are three convenient ways to pay the amnesty balance due. You can choose to pay the amnesty balance by credit card, personal check or online electronic payment from your checking or savings account using the DOR website.

When making a payment through any of these methods, you must provide the “bill number” listed in the upper right hand corner of your Tax Amnesty Notice.

Methods of payment:

1. On-line payment

Businesses: A convenient way for a business to pay is online through DOR’s Amnesty payment options. This application will allow you to make electronic payments directly from a checking or savings account. Click the Pay a Tax Bill link below and enter your Bill Number and Federal Identification Number. Pay a Tax Bill.
Individuals: A convenient way for individuals to pay is online through DOR’s Amnesty payment options. This application will allow you to make electronic payments directly from a checking or savings account. Click the Pay a Tax Bill link below and enter your Bill Number and Social Security Number. Pay a Tax Bill.

2. Pay by credit card

You may pay your amnesty balance using a third party credit card vendor. The vendor has been approved by the Commonwealth for this purpose and a convenience fee will apply. To access this payment option click on the Pay a Tax Bill link below and enter your Bill Number and either you’re Social Security Number or your Federal Identification Number. Pay a Tax Bill.

3. Pay by check

If paying by check, it’s very important that you attach the coupon provided on your Tax Amnesty Notice and your payment must be postmarked by October 31, 2014. Don’t miss the deadline by having your check returned because it was improperly completed. Your check must be made out to Commonwealth of Massachusetts and must be signed to be processed.

Contact us if you need help with the amnesty program.

Reprinted from the MA DOR website.

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Is Your Business Facing Back Taxes or Penalties? Take a Proactive Approach Before Next Tax Season.

While you may still be enjoying the last few weeks of summer thinking that it’s too early to start preparing your business for tax season, you may want to reconsider putting your tax planning on hold—after all, the peak of the tax preparation period is just a few short months away.

While it is wise to engage in tax planning strategically and consistently throughout the year, if you haven’t done that this year, then now is the time to be proactive and get organized—especially if your business has fallen behind on any tax payments.

Here are a few tips to help you put yourself in the best position possible when it comes to filing your business taxes next year:

Make a plan to pay back taxes. If you have fallen behind on any of your business tax payments, start today to right the situation by creating a plan to avoid further penalties by making payments. Accounting professionals are usually well-versed in IRS problem resolution—including those involving non-payment of taxes, so don’t be afraid to speak up and ask for help to create a plan that your business can afford.

Be proactive about payroll taxes. If your business is behind on payroll taxes, consider discussing with our firm the possibility of using an IRS installment plan to get back on track. If your business owes less than $25,000 in combined tax, penalties and interest, and has filed all required returns, this may be an option.

Avoid paying fines related to retirement plans. For businesses sponsoring retirement plans, failure to file Form 5500 for annual reporting can result in fines as high as $15,000, so be sure that you are up-to date on this requirement. If you do have a penalty and were legitimately unaware that you needed to complete this filing, you may be eligible for the U.S. Department of Labor’s program to reduce or eliminate these penalties.

Start organizing your tax records now. Organizing your business tax records now can make filing taxes much easier and faster come tax season. It can also show you exactly where you stand in terms of tax payments and any penalties that you may be facing. Compiling your documentation well ahead of time will reduce your stress and allow you to easily file a complete and accurate return and make any provisions for payment plans or IRS problem resolution.

If your business has fallen behind on taxes or you are facing tax-related penalties, don’t wait until tax season is here—please consult our office so we can help you prepare and make a plan ahead of time.

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3RD QUARTER ESTIMATED TAX PAYMENTS DUE SEPTEMBER 15, 2014

Your third quarter 2014 federal and state estimated tax payements are due on September 15, 2014.

Your estimate vouchers are located in the Client Action Required folder in your client portal.

Accurate 2014 estimated payments are neccessary to avoid future interest and penalties, so please keep us informed of any significant changes in your financial affairs or of any correspondence received from taxing authorities.

If you have any questions or if we can be of assistance in any way, please do not hesitate to call us at 508 896-3377.

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Don’t Fall Back—Use These Tips to Get Ahead Financially Before the Year Ends

With the official start of the fall season almost here, it’s the perfect time to get your finances in shape before year-end, so you’ll be well-prepared when 2015 begins.

Increase your retirement contributions. If you’re not already saving for retirement, start now! If you know you need to save more, up the contribution you are making to your investment accounts this fall. If you are not sure what you need to do, speak with a financial professional for advice.

Start using your flexible spending account (FSA). If you don’t use your FSA before the end of the year, you’ll lose out on the funds you have in it. Now is the time to get new glasses, have dental work done, or take care of other qualified healthcare needs.

Review your health insurance. Many employers have open enrollment for health benefits in October and November. It is especially important to review your health benefits information at this time, because your employer may have made changes due to health care reform regulations.

Review your home, auto, and life insurance coverage. In addition to your health insurance, now is the perfect time to take a look at any changes you may need to make to your personal insurance coverage, which should be reviewed annually. If you have had any significant life changes (such as buying a new home or having a new baby) or have any additional assets (a new car, for example) then you may need to look at additional coverage.

Develop a budget for now and for next year. Do you feel like your bank account is always running on empty? Or perhaps you have some financial goals that you would like to achieve in 2015. Be proactive and think about what changes you need to make to feel a little more financially flush today, and get where you want to be in the year ahead.

Plan for vacations and holidays. It’s never too early to start saving for next year’s summer vacation—and by starting now you will be able to put money away without really feeling a pinch in your wallet. Plus, now is the perfect time to sock a little extra away in your savings account to cover the extra money you may need at the holidays.

Do good with donations. Fall is also the time to gather up any summer clothing you don’t need and donate it to charity. You may also want to clean out your basement and garage and take any items in good condition to your church or local charity. You’ll feel good about helping others and also get a tax deduction for this tax year.

Meet with your trusted financial advisors. The fall is a great time to set up an appointment with our firm to prepare for year-end and to start tax planning for the coming year. It’s also the ideal time to review where you are financially and develop strategies to make sure you are optimizing your finances.

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CLIENT APPRECIATION COOKOUT - FRIDAY AUGUST 29TH FROM NOON TIL 3:00

CLIENT APPRECIATION COOKOUT

Celebrate summer's end with us at a labor day weekend cookout

Join us on Friday August 29th from noon til 3:00 as we start our labor day weekend

To thank you for your loyalty -

Please stop by Friday afternoon and enjoy hots dogs,

burgers, drinks and desserts with our staff!

Relax and start the Labor Day weekend off Right!

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2014 Massachusetts' Sales Tax Holiday set for August 16-17th

This week the Governor finally signed into law a sales tax holiday for August 16-17th.

Here is a summary of the act. If you have any questions, please contact us.

TIR 14-7: The 2014 Massachusetts Sales Tax Holiday Weekend

I. Introduction

A recently enacted statute provides for a Massachusetts “sales tax holiday weekend,” i.e., two consecutive days during which most purchases made by individuals for personal use will not be subject to Massachusetts sales or use taxes. St. 2014, c. XXX (“the Act”). The Act provides that the sales tax holiday will occur on August 16 and 17, 2014 and on those days, non-business sales at retail of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes, subject to certain exclusions. The following do not qualify for the sales tax holiday exemption and remain subject to tax: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500. The Act charges the Commissioner of Revenue with issuing instructions or forms and rules and regulations necessary to carry out the purposes of the Act.

II. Purchases Qualifying for the Exemption

The exemption applies to sales of tangible personal property bought for personal use only. Purchases by corporations or other businesses and purchases by individuals for business use remain taxable. Purchases exempt from the sales tax under G.L. c. 64H are also exempt from use tax under G.L. c. 64I. Therefore, eligible items of tangible personal property purchased on the Massachusetts sales tax holiday from out-of-state retailers for use in Massachusetts are exempt from the Massachusetts use tax.

III. Specific Rules

The following rules are to be applied by retailers in administering the Massachusetts sales tax holiday exemption:

A. Non-Exempt Sales. All sales of motor vehicles,[1] motorboats,[2] meals,[3] telecommunications services,[4] gas,[5] steam, electricity, tobacco products[6]and of any single item whose price is in excess of $2,500, do not qualify for the sales tax holiday exemption and remain subject to tax.

B. Threshold. When the sales price of any single item is greater than $2,500, sales or use tax is due on the entire price charged for the item. The sales price is not reduced by the threshold amount. For example, if an item is sold for $3,000, the entire sales price of the item is taxable, not just the amount that exceeds $2,500.

Exception: Under G.L. c. 64H, § 6(k) there is no sales tax on any article of clothing unless the sales price exceeds $175; in that case, only the increment over $175 is subject to tax. If, on the sales tax holiday, the price of an article of clothing exceeds the threshold, the first $175 may be deducted from the amount subject to tax. The $2,500 threshold amount is not increased by $175.

Examples:

A customer buys a suit on the sales tax holiday for $600. No tax is due.

A customer buys a wedding dress on the sales tax holiday for $2,550. Tax is due on $2,375 ($2,550 - $175).

C. Multiple Items on One Invoice. Where a customer is purchasing multiple items on the sales tax holiday, separate invoices do not need to be prepared. As long as each individual item is $2500 or less, there is no upper limit on the tax-free amount each customer may purchase.

Example: A customer purchases a television, a stereo receiver, and a computer. The three separate items costing $1,500, $1,200 and $2,000 can be rung up together, all tax free.

D. Bundled Transactions. When several items are offered for sale at a single price, the entire package is exempt if the sales price of the package is $2,500 or less. For example, a computer package including a CPU, keyboard, monitor, mouse, and printer with a single sales price of $3,500 would not qualify for the sales tax holiday exemption because the single sales price of the package ($3,500) is more than the sales tax holiday threshold amount of $2,500.

Items that are priced separately and are to be sold as separate articles will qualify for the sales tax holiday exemption if the price of each article is $2,500 or less. For example, a customer purchases a personal computer for $3,000, and a computer printer for $200, each of which is priced separately. The purchase of the personal computer will not qualify for the exemption because the sales price ($3,000) is in excess of the sales tax holiday threshold amount of $2,500. However, since the sales price of the computer printer ($200) is less than $2,500, the printer would be exempt from tax.

E. Coupons and Discounts. If a store coupon or discount provided by a retailer or manufacturer reduces the sales price of the property, the discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less. If a store coupon or discount applies to the total amount paid by a purchaser rather than to the sales price of a particular item and the purchaser has purchased both eligible property and taxable property, the seller should allocate the discount on a pro rata basis to each article sold.

Example: A furniture store customer has a coupon for 20% off her entire bill. She purchases a dining room table for $1,800, and a sofa for $3,500. The total discount available is $1,060 ($5,300 x .20), of which $360 is attributable to the table ($1,800 x .20), and $700 is attributable to the sofa ($3,500 x .20). No tax is due on the sale of the table. Tax of $175 is due on the sales price of the sofa, $2,800 ($3,500 - $700), as even its discounted price exceeds the $2,500 threshold.

F. Exchanges. Consistent with the Department’s usual practice, if a customer purchases an item of eligible property during the sales tax holiday, but later exchanges the item for an identical or similar eligible item, for the same price (“an even exchange”), no tax is due even if the exchange is made after the sales tax holiday, see LR 03-8.

G. Layaway Sales. A layaway sale is a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time and receives the property when the last payment is made. Layaway sales do not qualify for the sales tax holiday, even if the last required payment (or payments necessary to complete the transaction) are made on August 16 or 17, 2014.

H. Special Order Items; Transfer of Possession after Sales Tax Holiday. Special order items such as furniture are eligible for the sales tax holiday so long as they are ordered and paid in full on the sales tax holiday weekend, and the cost of each item is $2,500 or less, even if delivery is made at a later date. Generally, a customer pays for an item when: (1) the seller receives cash, a check, or a money order; (2) the seller processes a credit card or debit card transaction; or (3) the buyer and seller enter into financing arrangements with a third party, including an affiliated entity (but excluding seller financing where the seller extends credit to the customer). A prior special order purchase with a deposit paid before August 16, 2014 will not qualify for the holiday, even if the retail customer pays the entire remaining balance due on August 16 or 17, 2014.

I. Rain checks. When a customer receives a rain check because an item on sale was not available, property bought with the use of the rain check will qualify for the exemption regardless of when the rain check was issued if the rain check is used on the sales tax holiday weekend. Issuance of a rain check during the sales tax holiday weekend will not qualify otherwise eligible property for the sales tax holiday exemption if the property is actually purchased after the sales tax holiday.

J. Rentals. Generally, rentals for thirty days or less of tangible personal property other than motor vehicles and motorboats are eligible for the sales tax holiday, even if the rental period covers days before or after the holiday, providing payment in full is made during the sales tax holiday weekend. The sales tax holiday does not apply to rentals or leases of tangible personal property of any type if the term of the rental or lease contract is longer than thirty days.

K. Rebates. A rebate is a refund of an amount of money by the manufacturer of a product to the retail purchaser of the product. If a vendor sells tangible personal property to a customer who applies a manufacturer's rebate to reduce the sales price at the time of the sale, the rebate is generally treated as a cash discount and is excluded from the sales price. The discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less.
If a vendor sells tangible personal property to a customer who will receive a rebate after the sale (e.g., by mailing a coupon to the manufacturer), the full purchase price of the property determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less, and tax must be charged on the full purchase price if it is over $2,500.

If a vendor offers a customer a cash discount upon the purchase of tangible personal property and the customer also receives a rebate from the manufacturer of the property after the sale, only the cash discount given by the retailer is excluded from the sales price for purposes of the sales tax holiday exemption. The amount of the manufacturer's rebate is not deducted from the sales price.

L. Internet Sales. If a customer orders an item of eligible property over the Internet, the item is exempt if it is ordered and paid for on August 16 or 17, 2014 Eastern Daylight Time. Generally, a customer pays for an item when the seller receives a credit card number, a debit authorization, a check, or a money order. The actual delivery can occur after the holiday period. For example: a customer orders a computer over the Internet with a sales price of $2,000 and charges the sale to his credit card at 1:00 p.m. (EDT) on August 16 or 17, 2014; the computer has a delivery date of September 20, 2014. The sale is exempt since the computer was ordered and paid for during the sales tax holiday.

M. Splitting of Items Normally Sold Together. Articles normally sold as a single unit must continue to be sold in that manner. Such articles cannot be priced separately and sold as individual items in order to obtain the sales tax holiday exemption.

N. Returns. Generally, sales tax may only be refunded to a retail customer on returns within 90 days of the sale. G.L. c. 64H, § 1. For the 90 day period following August 16 or 17, 2014, when a customer returns an item that could have qualified for the sales tax holiday exemption, the vendor may not credit or refund sales tax to the retail customer unless (1) the customer provides a receipt or invoice that shows the tax was paid or (2) the seller’s records show that tax was paid. Sellers may set their own return policies. This requirement is not intended to change or extend a seller’s return policy.

O. Erroneously Collected Taxes. Customers who were erroneously charged sales tax by a vendor for an exempt purchase should take their tax paid receipt to the vendor to obtain the refund. If the vendor has previously remitted the erroneously collected tax to the Department, the vendor may file an application for abatement of the erroneously collected tax within 3 years upon satisfactory evidence that the vendor has credited or refunded the tax to the purchaser.

IV. Responsibilities of Retailers

A. Participation. All Massachusetts businesses normally making taxable sales of tangible personal property that are open on August 16 or 17, 2014 must participate in this sales tax holiday.

B. Erroneous Collection. Any sales or use tax erroneously or improperly collected by a retailer on August 16 or 17, 2014 must be remitted to the Department of Revenue.

C. Requirement of Nonbusiness Use by the Purchaser. Normal business records showing the date of sale, item(s) purchased, and selling price must be kept by the retailer/ vendor. The requirement that purchases under the Sales Tax Holiday be for nonbusiness use is unchanged and purchasers paying for tangible personal property with business credit cards or checks must be charged tax on the items purchased.

D. Out-of-State Retailers. Out-of-state retailers registered to collect Massachusetts sales and use taxes must participate in this sales tax holiday. Such retailers should not collect sales/use tax for items ordered and paid for on August 16 or 17, 2014 in accordance with the rules of this technical information release. The retailers must keep records sufficient to verify the date of sale, item(s) purchased, and selling price.

E. Penalties. Retailers that back-date sales occurring after August 17, 2014 or that forward-date sales that occurred before August 16, 2014 in order to make them appear to qualify for the sales tax holiday or otherwise fail to follow the rules in the TIR in order to improperly avoid collecting and remitting sales or use tax may be subject to the tax evasion penalties of G.L. c. 62C, § 73, including a felony conviction, a fine of not more than $160,000 or $500,000 in the case of a corporation, or by imprisonment for not more than five years, or both, and may also be required to pay the costs of prosecution. A vendor may not void and rewrite a sale that has taken place before August 16, 2014 for the purpose of bringing the transaction under the sales tax holiday rules.

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Re-energize Your Business by Getting into a Back-to-School Mindset

The back-to-school season is always an exciting time. You can feel it in the air…a time of new beginnings and opportunities. And while the kids are enjoying reconnecting with friends and teachers and the thrill of new school clothes, business owners can adopt their own form of back-to-school spirit to revitalize excitement around their business. Here are a few tips to help you get into this mindset…

• Establish new goals. If it’s all about new beginnings, then new goals are in order. Successful business owners are always looking for ways to improve and face change with a positive attitude, so make it a point to set new goals for your business as you re-energize.
  
  
• Continue your education. As business owners, you are life-long learners…because there is always something new to learn. Enroll in an online class, register for informative webcasts, or get involved in other events that serve to advance your business education. By sharpening your skills, you will ultimately grow your business.
  
  
• Expand your network. Like the kids reconnecting with friends, you can take this time to reconnect with your community—both on the personal and business side. Join in on community projects and make a visit to your local Chamber of Commerce. You never know where you might pick up a new customer or referral source.
  
  
• Plan your next break. It can be very cathartic to plan a getaway…away from the busy life of the business owner. Identify a period when you can carve out some “me time,” even if it is a ways out. Then make sure you actually get away. Days off, even if only a few, can do wonders for reducing business stress.

You are now armed with some strategies to get into a “back-to-school” mindset and re-energize your business. You’d be surprised at the positive changes that can come from it.

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Delegation: The Ultimate Productivity Enhancer for Business Owners

As a business owner, one of the hardest—yet most beneficial skills to learn—is delegation. Many people who run businesses and have staff often find delegation of duties difficult for a number of reasons—two of the most common being a perceived lack of time (the “It’s faster to do it myself” excuse) or because they have a hard time letting go of their responsibilities and trusting that someone else can take care of them effectively. However, being able to delegate effectively is key for leaders. Only through delegation can they attend to higher-value responsibilities that will have a bigger impact on their company in the long run.

If you own a business, answer this question honestly: Do you spend most of your day performing tasks that will significantly and positively impact your company and support the vision you have for it? Or, is the better part of your day spent handling work that provides no real strategic value to your organization? Are you taking on tasks that are supposed to be completed by staff or third-party vendors? If so, you probably need a little help learning how to delegate. Consider these delegating tips:

1. Determine what to delegate. The first step in delegating is to choose what tasks can be delegated. Assigning critical, time-sensitive tasks may not be the best place to start. Instead, try selecting tasks that are ongoing, necessary processes that take up your time but are not high value. That being said, it is equally important not to delegate something you’re unwilling to do yourself, which may have negative consequences for your team’s morale.

2. Match the task with the team member. Making sure that you pick the right person to delegate a task to is paramount to delegating success. Taking time to understand the strengths and weaknesses of your staff will help you make the right project assignments and will also bolster the confidence of those who are taking them on.

3. Clearly communicate expectations. Open, clear communication is another critical component of effective delegation. At the start of any project hand-off, be crystal clear about your expectations, including timelines and deliverables, and give your team members all of the information they need to achieve those goals. Putting the project parameters and your direction in writing helps to reduce frustration and ensures a positive end result.

4. Be available, but don’t hover. The point of delegating is defeated if you micro-manage the work that is being done. So, while it’s important to be available to your staff should questions about their assignments arise, you also need to allow them autonomy and flexibility to accomplish the work. Checking in from time to time, especially when a task is new, may be helpful to make sure everyone is on the right track.

5. Practice patience. Delegating will take work off your plate over time, but it will likely require additional time at the beginning to detail the task and your expectations and answer questions. And, you may have to learn from a bit of trial and error as you learn which members of your team can handle additional responsibilities and which tasks fit them best. Remember, mistakes will happen. Be sure to address any problems as they arise so they can be corrected quickly. Also, give encouragement and positive feedback when tasks are well done.

At first, letting go of your daily duties may be difficult, but, the more you delegate, the more comfortable you will become with the process. Keep in mind that by allowing others to step-up and help you, you will benefit everyone in your organization by focusing more time and energy on the things that will move your business forward.

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New Hosted QuickBooks Log in Procedures

This weekend we launched our new and improved website. The changes were designed to optimize your experience on any devise -  desktop, tablet or phone.

As part of this redesign how you log into Hosted QuickBooks has changed slightly. We have created a video that will take you step by step through the log in process.

Follow the link below to our Resource Center. click on the Video Library and find the Logging into Hosted QuickBooks. 

/resources/

If you have difficulties logging in, please contact either myself or Mandy.

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Why “Set It and Forget It” is Not a Winning Website Strategy

So, you have a nice website for your business—you can check “web strategy” off the to-do list, right? Not so fast! While creating a website that is easy to navigate, visible to search engines, and true to your company’s brand is no small feat, it should be just the first step in your website strategy. To maximize your organization’s web presence, you can’t just “Set it and forget it.” Keeping your site updated and evolving with your business is critical—otherwise, you are unlikely to reap the full benefit of the investment you have made in developing it.

Updating and refreshing your website is a task that never ends, but it also pays dividends in terms of the search engine optimization (SEO) of your site, not to mention the attractiveness of your site to new and existing customers. Many of the changes or additions that a website needs regularly are content-based. Adding blog posts or articles periodically not only shows your web visitors that your business is committed to communicating in a timely manner, it also provides new content for search engines to index, which improves your site’s search rankings.

While creating new content for your site seems like a simple strategy, it is often something that businesses struggle with from both a time and creative standpoint. This is why having a plan for who is responsible for website updates and a calendar of what will be posted when (for several months in advance) is essential. If you use a third-party web developer to maintain your website, it is important that you communicate with them about the frequency and type of updating you want for your site. If you plan to manage your site updates internally, ensuring that you have an easy-to-use content management system is critical.

Beyond the logistics of getting fresh content online, many companies also struggle with what information makes for high visitor engagement and search engine fuel. Focusing on topics your existing clients would be interested in is usually a good place to start when developing content. Are there questions that your customers always ask? Perhaps a “Frequently Asked Questions” section on your site would be a good addition. A blog that you update regularly is also a great way to add fresh, relevant content to your site, while highlighting your business and providing useful information.

From an engagement perspective, visual content such as pictures and videos are usually better received by site visitors than pages of text. Of course, whatever content you add to your site should be useful to your target market, so always keep the customer in mind when thinking about website updates. Remember, too, that quality content is much more important than producing quantity content. And, don’t overlook the basics when it comes to refreshing your site. If you have recently made changes to your business hours or you have staff changes or products or services that you no longer offer or are new offerings, make it a priority to update that information as quickly as possible.

Building a quality website for your business is critical in today’s market, however, it is only half of an effective web strategy. Ensuring that you regularly update your site may take some time and thought, but it is well worth the effort when it comes to attracting new site visitors and potential clients as well as providing your existing customers information and resources that will keep them engaged with your business.

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NStar warning customers about scam demanding payment

A note from Nstar

Recently there has been an increase in scams both in our region and nationally. 

As an important safety reminder, all NSTAR employees carry photo identification at all times and most of our employees also drive a company vehicle.

If you believe somebody is falsely claiming to be an NSTAR employee, report the incident immediately to your local police.

NSTAR employees also rarely make unsolicited house visits. Some exceptions include following up on collections notices, accessing our equipment to ensure the safe and efficient operation of our distribution system, or there is another safety concern.

To help further protect yourself from potential scams, please keep the following tips in mind:

• Never provide personal financial information to any unsolicited individual, whether in person, on the phone, or online.
• Customers schedule for disconnection due to non-payment receive advanced written notice, which includes actions they can take to ensure their service isn't interrupted.
• Customers have multiple payment options available, including E-Bill, One Time Payments, Pay by Phone, Money Orders, Walk-In Locations and credit card payments.
• NSTAR would never ask customers to purchase prepaid cards.
• You can verify a caller claiming to be from NSTAR is legitimate by asking for some basic information about your account. Our representatives are able to provide the name on your account, the account address and exact past due balance on your account.
• Always decline any door-to-door offer claiming to be from NSTAR - even if the individuals provide proof such as a utility company badge number. You can also call us directly at 800-592-2000 to confirm any offers.

Examples of Recent Scams

A common theme of most scams is threatening customers with disconnection if a same-day payment is not made. Here are some examples of scam attempts that have been reported to NSTAR.

• A caller states they represent the Billing Department and tell customers they will be shut off if they don’t make a payment by midnight.
• A caller instructs a customer to make a payment by purchasing a “Green Dot” VISA card. The customer is then asked to call another phone number where information is obtained from the credit card and the monetary value is removed.
• A customer reported receiving a phone call from another electric utility telling him that we are disconnecting the customer’s service by 7 p.m. unless a payment of $500 was made.
• A business customer reported receiving a call advising him that “the system crashed after the hurricane” and a payment was needed over the phone to maintain the customers' service. Similarly, another caller told customers a payment wasn't received because of the hurricane, so their service would be disconnected immediately unless a payment was made.
• A customer was told by a caller that their meter was malfunctioning and the customer was being overcharged. The customer was instructed to purchase a prepaid credit card for $200. The customer was later called back and told the payment wasn't completed, so another card needed to be purchased for $300 - with the assurance the customer would be refunded $1,000 and the meter repaired.
• In some instances, customers reported NSTAR's 800-number appearing on their caller ID.

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Don’t Neglect Your Own Finances When Caring for Aging Relatives

As the number of seniors in the U.S. population continues to increase, so does the number of people taking care of an aging parent. In 2011, an estimated 10 million adult children over the age of 50 were caring for an aging parent. Having to take on this type of responsibility, especially during your prime earning years, can take a toll—not only emotionally and physically, but financially as well. Research has shown that working Americans who must reduce their working hours or leave their jobs to care for an aging parent can sacrifice their own financial stability to do so.

Ideally, before you step into a caregiver role, you should have a discussion with your parent(s) or the relative who needs your help about their wants and needs and how finances will work. You should you also determine in what situation you will become responsible with the legal power to make decisions for them. While this conversation may be uncomfortable, it is critical.

Balancing your own financial needs with the need to care for your aging relatives can be stressful and challenging, so consider the following tips to help you manage both of these priorities:

1. Think long-term before you give up a job. While it may be difficult to hold down a full-time job when you need to be able to take your relative to doctor appointments or tending to their well-being, the time you gain may come at the cost of your long-term financial security. Be sure to think long and hard before you cut your current income and reduce or eliminate your retirement savings. Also consider if you will need to get another job at some point and if your skills will still be sharp if you exit the workforce completely.
   
   
2. Create a caregiving budget. Before making any caregiving commitments, create a budget with your own expenses in light of potentially becoming a full-time caregiver. In addition, make a list of the resources that your relative has available to help you support the needed caregiving expenses.
   
   
3. Research the public benefits available. Do some research online and in your community to identify what public assistance may be available to help you reduce the costs of caregiving services. Websites such as The National Council on Aging (www.ncoa.org) have extensive information available that can help caregivers find help in their local area.
   
   
4. Know the limits of Medicare and Medicaid. It is important to know that Medicare and Medicaid offer only partial solutions to the financial burden of long-term care. For example, Medicare does not pay for caregiving services on a long-term basis and Medicaid will only cover long-term care services after the individual in need has exhausted most of their assets and qualifies for the program’s nursing home benefits. Therefore it is important to factor into your financial decisions what kind of Medicare and other medical coverage your parent or relative has and what kind of out-of-pocket expenses you may incur.
   
   
5. Don’t sacrifice your own retirement. Another piece of the financial picture that you need to consider before committing to caregiving is your own retirement plan. While it is noble and sometimes necessary to give up your own livelihood to care for a sick relative, make sure that you consider the impact this may have on your own retirement plans—and even the ability to pay for your own care should you need it in the future.

Having a parent or other relative with health problems is stressful, and the burden of taking on the role of caregiver or finding affordable long-term care solutions only adds to the challenge. While it may be difficult to do so, talking through the situation and potential options with the individual needing care is critical before you make decisions that could impact your own financial future. Our trusted advisors can help you look at the financial implications of caring for your loved one. Please contact us if you would like to talk.

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4th of July Schedule

We wish all of our clients a very happy and safe 4th of July!

In observance of Independence Day, we will be closing the office at noon on Thursday, July 3rd. We will reopen on Monday, July 7th at 9:00 am.

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Is Your Company Ready to Take on the Telecommuting Trend?

Allowing employees to telecommute, also known as working remotely, is a major trend destined to reshape the way that companies recruit and manage employees in just about every industry. According to a 2013 survey conducted by the Society for Human Resource Management, more companies were planning to offer telecommuting in 2014 than any other new benefit. And, research by Global Workplace Analytics confirms the number of work-from-home employees has been rapidly increasing in America growing by 79.7% between 2005 and 2012. So if your organization does not yet have employees that work remotely, you may want to consider how you will respond when you do.

It is important to recognize that telecommuting is not just for Millenials and moms anymore. The U.S. Census Bureau’s annual American Community Survey shows that the typical telecommuter is a 49-year-old college graduate—man or woman—who earns about $58,000 a year and belongs to a company with more than 100 employees. As such, many organizations—large and small—are forgoing a central office entirely, which means that managers are increasingly tasked with overseeing workers scattered across cities, states, and time zones.

In their book, "Remote," Fried and Heinemeier Hansson offer many best practices for managing remote workers, including these key recommendations:

1. Hire for the work you want people to actually do.

Heinemeier Hansson says the single most important thing for remote work to succeed is creating a culture where the work itself matters. Employees need to be hired on the merits of what they produce. This might mean that during the hiring process you give candidates a sample project to complete or another test of their abilities so you are sure that you are making the right decision.

2. Create a culture that supports telecommuters.

Many companies have a mix of employees including some who work on-site and some who work remotely. However, your telecommuters are bound to run into difficulties if the culture and processes of your business are built around your physical office. If everyone else at the company comes into a central office, and one or two employees work remotely, it is unlikely that the arrangement will work well over the long term.

3. Don’t let telecommuters burn out.

While many people conjure up images of telecommuting as relaxing and not as stressful as traditional office jobs, employees working at home often have a harder time setting boundaries between their work and personal lives. Employers may fear that telecommuters will slack off if they are not under their watchful eyes, however, the opposite is usually the greater danger—employees who overwork themselves and burn out. Managers should take measures to reduce this risk, such as regular check-ins, as described below.

4. Schedule regular one-on-one check-ins.

On a regular basis, managers should check in with their remote workers, either by phone or video chat, or in-person if the distance allows. Keep the tone casual and ask questions about how things are going in general rather than just going through a list of project updates. This can help to maintain an open line of communication so that everyone is on the same page and can be productive.

5. Focus on building trust and respect.

Trust and respect between telecommuters and their employers and co-workers is critical. When you don’t see people on a regular basis it is important to invest time in building strong relationships—perhaps allocating a little more time to communications by phone and email and being responsive to questions. Even with several remote workers, having periodic in-person meetings can help everyone humanize the face behind the emails.

Many of these tips are the same principles that any supervisor should adhere to no matter where their employees are located. Therefore, if your organization is considering transitioning into telecommuting or hiring some remote workers, it is also important to ensure that you have the right management structure in place to ensure that your company can reap the benefits of these arrangements.

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Are Summer Vacations a Thing of the Past? Don’t Let It Hurt the Productivity of Your Business

While we’ve just celebrated the first official summer holiday weekend, studies show that almost 75 percent of employees do not take all of their allotted vacation time. In fact, many employees hesitate to take a break from work, and those that do often check in at least daily while on vacation, returning emails or taking calls. This may seem like true dedication to a job, but experts say that when employees don’t take time to recharge it can hurt both the productivity and the quality of work they produce, in addition to increasing both their stress and disengagement levels.

Research also shows that taking time off can help promote creativity and improve critical thinking skills and productivity when employees return to work. So with the summer season almost here, now is the perfect time to discuss with your team the current workload and how to best accomplish projects while still allowing everyone to enjoy some time off. In addition, consider the following ideas for ensuring that you and your employees feel comfortable when team members are taking their well-deserved vacations.

Have a Plan for Coverage
Of course, it’s critical that business needs are met while employees are away—and nothing kills the glow of a great vacation more than when employees know they will face piles of work when they return. Take some time upfront to detail a plan, with the help of your employees, to cover the work that needs to get done while each person is away. You may also want to do some cross-training of employees so they are prepared for any new duties they need to cover for a co-worker.

Make It ‘Safe’ to Take Vacations
Many companies spend time and resources applauding employees that go the extra mile for their job, which is a great way to recognize outstanding performance. However, few organizations (knowingly or not) create a culture that endorses the need for employees to take time off to recharge. Employees may worry that if they take a vacation they’ll be perceived by their peers or supervisor as less dedicated than those that don’t. Some individuals may also fear that their position of being ‘indispensable’ will be compromised if they take time off. To help counter these feelings, make it “safe” for employees to take time off without feeling guilty by encouraging them to do so, putting a plan in place to make sure their work is covered while they are gone, and asking them about their vacation when they return.

Set a Good Example
Don’t underestimate the impact that your own behavior and attitude about vacation has on your team. If you never take time off, your employees may feel that you don’t want them to either. Share what your vacation plans are and how important it is for everyone to take time to recharge. Don’t have a vacation planned? Maybe it’s time to think about taking a few days off to refresh—it’s likely you will come back to your business feeling more energized, productive, and with some great memories that you can share with your team.

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An Ounce of Prevention – Protect Yourself Against Identify Theft

According to the most recent U.S. Department of Justice data, approximately 7 percent of U.S. residents age 16 or older are victims of identity theft each year. While the overall percentage of Americans affected by identity theft has held steady since 2008, identity theft related to tax information is increasing rapidly. In fact, the Federal Trade Commission (FTC) recently released statistics showing that tax-related identity fraud was the single most reported type of identity fraud it received complaints about in 2013, comprising 30 percent of all of its identity theft complaints. This has prompted the IRS to pilot programs in a handful of states to combat this issue.

In addition to your tax documents, identity thieves are always looking for easy access to the information they need to commit crimes. Here are a few simple precautions you can take to keep your personal information safe and reduce the chances that you will have to deal with the fallout from having your identity stolen:

Monitor your credit reports
It is important to get a handle on where your credit stands by requesting a credit report from one of the three credit reporting services: Experian, TransUnion, or Equifax. Once you check to make sure your current credit report is accurate, sign up for a credit monitoring service to receive updates and alerts when there are any changes in your credit report.

Guard your Social Security Number
Think of your Social Security Number (SSN) as the key with which someone can steal your identity and create havoc with your finances. As such, it should be guarded closely. For example, do not carry your Social Security card in your wallet, and make sure that your bank does not print your SSN on your personal checks.

Carry only essential documents with you
In keeping with the previous point, carry only what you need with you—such as credit cards, your birth certificate or passport, or other identification. Your identity can be compromised during your daily routine and when you travel—with gas stations often being prime targets for identity thieves who may tap into data from credit card sales, or even steal your documents left in a car if you opt to pay inside for your fuel or other items.

Make a record of your important numbers
Create and keep a list of account numbers, expiration dates, and telephone numbers for contacting your credit card companies and financial institutions. File this document away in both hard copy and electronically. This document can prove to be invaluable if your wallet is stolen and you need to quickly alert your creditors to prevent or stop an identity theft.

Take time to select strong passwords
While it is tempting to create online passwords or PIN numbers that you can easily remember and to use the same one across all of your online activity, it is much more secure to create strong passwords out of a random mix of letters and numbers and to make sure that they vary from site to site.

Don’t give strangers your personal or financial details
Identity thieves will use many different channels to get access to your sensitive personal and financial information, including by phone and email. They may call, posing as banks or government agencies asking for your SSN or bank account information. They may also send official-looking emails asking you to click a link to provide similar information (a tactic commonly known as phishing). To prevent identity theft, do not give out your personal or financial information over the phone or by email unless you initiate the request.

In addition, identity thieves are not above looking for financial and personal information in the trash—so be sure to shred your receipts, credit card offers, bank statements, and other documents containing sensitive information before throwing them away.

Given the potentially devastating consequences of identity theft, taking steps to prevent yourself from becoming a victim of this crime is critical. Be assured that our firm takes the security of your personal and financial information very seriously. If you have any questions regarding this subject, please contact us.

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Don’t Spend Your Tax Refund Unless You’ve Considered These Tips!

Hopefully you have already filed your tax return and are anticipating at least a modest refund. But, before you get too excited about splurging with your IRS check, stop for a moment and remember that you earned that money! While many people view a tax refund as ‘bonus’ cash—it isn’t. It is simply a return of the funds that you earned and paid as tax beyond what your actual obligation was.

Keeping this in mind, think about using the money you receive from the IRS purposefully. Also, if you did receive a sizable refund, you may want to consider adjusting your tax withholding amount, so you aren’t shorting yourself on your regular income throughout the year.

The following list can help you determine some of the best ways to use your refund—ways that contribute to your long-term financial health:

• Start or increase your emergency fund: By using your refund to stash some money for a rainy day, you’ll be building both a financial safety net and peace of mind.
• Eliminate or pay down high-interest debt: Once you have established an emergency fund, paying off any high-interest debt such as credit card balances, payday loans, and debt consolidation loans is one of the best things you can do to improve your financial situation.
• Consider refinancing your mortgage: With relatively low mortgage rates available, you may want to consider refinancing your mortgage to save money each month with a lower mortgage payment. Your refund can provide the funds from which to pay your closing costs and fees when you refinance.
• Contribute to tax-sheltered accounts: Using your tax refund to top-up (or start) a Roth IRA or 529 college savings plan offers you a double bonus. Not only will you be compounding dollars and interest for your future retirement or college tuition needs, but you’ll be creating a tax deduction as well.
• Improve the lives of others: If you have your own financial bases covered, then making a charitable donation to help someone else is an excellent use of your return. It provides something priceless to those who will benefit from your generosity and offers you a tax deduction.
• Reinvest in your business: Is there something you would like to do in your business, but you just never seem to have the money to do it? If you have some funds leftover from your refund after taking care of savings and debts, making an investment in your business can stimulate business growth and enable you to claim a few more tax deductions next year.

While it is tempting to use your tax return as a windfall, it is important to remember that you earned it! Taking steps to secure yourself financially today is an investment that will pay dividends in the future— long after the glow of any spontaneous splurge has faded.

If you have any questions about this information, please contact our office. We are here to help.

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Does Your Business Need a Post-Tax Season Tune-Up?

With the business tax return deadline behind us, this is an ideal time to think about giving your business a little post-tax season tune-up with the intention of making next tax year easier and improving your financial situation. Here are a few key areas to consider analyzing now that your business taxes are filed:

Day-to-day accounting. With the rush of preparing for tax season, on top of the regular hectic pace of running your business, it can be tough to keep your financial records up-to-date. If you fell behind over the past several months, now is the time to get caught up, before the lag in your record keeping hinders your business.

Start by reconciling your business accounts, making sure that your balances are accurate, and that you are current on your bank deposits and bill payments. By investing some time to make sure your day-to-day accounting is on track, you will have the data you need to evaluate important metrics including your profit and loss statements, annual financial comparisons, and cash flow.

Your current financial and tax situation. In just a few short months, it will be time for a mid-year review to ensure your business is on track financially. Now is an ideal time to schedule a mid-year planning session with our firm to discuss your current business financials and your operational plans for the rest of the year. You should also plan to address any new business or personal developments that may affect your tax liability in the next year so we can work with you to lower your tax obligations.

Retirement plans. If you do not already have a retirement plan, consider opening a retirement account to defer income taxes and provide future income, beyond Social Security benefits. Our trusted advisors can help you select the right retirement plan for you, and, if you desire, help you set up a retirement plan for your employees as well.

Adjust estimated tax payments. If you had a large tax liability or a large refund this year, you may want to revisit your estimated tax payments and adjust your calculations to avoid owing too much at the end of the year, or leaving your business cash-poor due to overpayment of taxes. As the year progresses, monitor your bottom line and adjust your tax estimates accordingly.

Employee benefits. If your business has employees, you may wish to consider providing them with enhanced fringe benefits, while your business reaps tax savings as well. Adding pre-tax benefits such as health insurance, group term life insurance, and child care subsidies to an employee’s pay, saves your business money because you are not required to pay the employer’s share of payroll taxes on these forms of reimbursement.

While you are probably glad to have your business taxes filed for this year, it can be extremely beneficial to fine-tune your business finances and tax situation now, rather than waiting to see where you stand at the end of the year. By being proactive, you can benefit from valuable tax savings and opportunities to improve the accuracy of the financial information that you use to manage your business. Please contact our office with any questions you may have—we are here to help you.

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The Child Tax Credit Can Give Parents Some Relief

There’s no disputing the fact that raising children today is a costly endeavor. However, the American Taxpayer Relief Act of 2012 (ATRA) has eased parents’ tax burden and put a few dollars back in their pockets with the Child Tax Credit, which ATRA made permanent. This tax credit can be worth as much as $1,000 per qualifying child depending upon a parent’s income.

Because it is a tax credit rather than a tax deduction, which simply reduces taxable income, the Child Tax Credit reduces a parent’s tax liability dollar for dollar with the amount of the allowable credit. However, the credit cannot be taken for more than the amount of tax owed to the IRS.

To see if you qualify for the Child Tax Credit, the IRS provides the following seven tests:

1. Age test—The child being claimed must have been under the age of 17 at the end of 2013.
2. Relationship test—The child being claimed must also be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child can also be a descendant of any of these persons. For example, your grandchild, niece, or nephew will qualify. An adopted child includes a child lawfully placed with you for legal adoption.
3. Support test—The child must not have provided more than 50 percent of his or her own support for 2013.
4. Dependent test—The child must be claimed as a dependent on your 2013 federal income tax return.
5. Joint return test—A married child can’t file a joint return with his or her spouse if the couple is filing jointly only to claim a tax refund.
6. Citizenship test—The child being claimed must be a U.S. citizen, U.S. national, or U.S. resident alien.
7. Residence test—In general, the child being claimed must have lived with you for more than half of 2013 to be claimed. However, a child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half of the time he or she was alive.

It is important to note that your filing status and income may reduce or eliminate the Child Tax Credit. If your modified adjusted gross income is more than $110,000 (married filing joint), $55,000 (married filing separately), or $75,000 (single, head of household) you cannot claim the credit.

If you qualify to claim the Child Tax Credit, you will need to file IRS Form 8812 with your income tax return. Please contact our office if you have any questions about this tax credit.

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Is the New Simplified Home Office Deduction Right For You?

A nice home office is often one of the biggest perks of being a freelancer, and it can also provide you with a significant tax deduction if you qualify for it. Up until this tax year, the calculations needed to claim the home office deduction were complex and required meticulous record keeping and a separate form (Form 8829). However, starting with your 2013 tax return, the IRS has introduced a simplified method for calculating the home office tax deduction. This reduces the paperwork but also caps it at $1,500, which raises the question: Should you use it, or stick with the standard regular method?

The beauty of the new simplified home office deduction is that it easily allows individuals who have a legitimate home office (see the IRS website to see if you do) to take a tax deduction of up to $1,500. To calculate this deduction, multiply the square footage of your home office space by $5, to a maximum of 300 square feet, or $1,500. The deduction is then entered on Schedule C of your 1040 return. You don’t have to provide any documentation to claim it, unlike the old “actual expense” method, which involves calculating, allocating, and substantiating your home office expenses.

If you use the simplified method, you can also deduct your mortgage interest and real estate taxes separately on Schedule A if you itemize. However, because it imposes a cap of $1,500 and eliminates the opportunity to deduct depreciation or carryover any losses from a previous year, this new deduction may not necessarily be the best option—especially if you can claim a higher amount using the actual expense method and you keep good records of your eligible home office expenses, such as mortgage interest, insurance, utilities, repairs, and depreciation.

In contrast, the regular method allows deductions for a home office that are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you will need to figure out the percentage of your home devoted to your business activities. The bigger your home office is, and the more eligible expenses you have, the more likely the actual expense method will yield a larger tax break than the $1,500 ceiling imposed by the new simplified home office deduction.

This tax year, it may be worthwhile to compare the size of the deduction you can take using both the new simplified method and the regular method. It is important to note that with either method, you can only reduce your business income to zero; you can’t take a loss. However, if you find that you prefer one method over the other, or you think that you will exceed the $1,500 allowed by the simplified method one year, but not the next, you can switch the method you use to calculate the deduction from year to year.

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Take Advantage of the Invaluable Learning Opportunity Your Tax Return Provides

With tax season in full swing, you are likely busy compiling all of your tax documents and expense receipts to support the preparation of your return. When you think about it, there is a lot you can learn from preparing to file your tax return. It provides the perfect snapshot of where you stand financially, which can offer important insights into your money management habits. While there are many different components that impact your finances, three key questions to consider when it comes to your taxes include:

Are You Saving Enough for Retirement?
You can tell by looking at your tax return whether you made the maximum allowable contribution to tax-advantaged retirement saving options. If you didn’t this year, you may want to consider looking into setting up a Roth IRA, or another eligible investment account. Business owners who have SEP-IRAs but aren’t making their full contribution may also want to increase them.

Did You Maximize All Available Tax Deductions and Credits?
There are some deductions and tax credits that many taxpayers are aware of, and many more that they are not. By taking the time to review your tax return with our firm you can learn about all of the options you have available to you to lower your tax obligations.

How Should You Use Your Refund?
In addition to making sure that you take the appropriate steps to maximize your tax refund, you should also consider what you do with it once you receive it. One option is to have your refund deposited directly into a savings or retirement account, effectively reducing the temptation to spend it right away. Another smart use for your refund is to use it to pay down any debts that you may have.

If you have questions about your financial situation, remember that we can help. Our team of financial professionals are dedicated to working with clients like you throughout the year to help you ensure that your tax return represents the financial picture you desire.

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Business Owners, Be IRS Audit Savvy this Tax Season

With tax season here, you might be wondering just how likely you are to hear from the IRS after you file by means of an audit notice. While the chances you will be audited are relatively low if you file a straightforward personal tax return, the more complex your tax situation becomes (reporting business income or graduating to a high-income tax bracket, for example), the more likely it is that you will be audited.

As you look to file your taxes this year, it pays to be aware of some red flags that can draw extra IRS attention including the following:

• Claiming 100% business use of a vehicle. From the IRS’ perspective, it is rare for an individual to use a vehicle 100% of the time for business, especially if no other vehicle is available for personal use.
• Deducting business meals, travel, and entertainment on Schedule C. Writing-off big dollar amounts for business expenses that could also be personal entertainment, especially if the amount seems too high for the type of business that is claiming them.
• Hobby loss write-offs. If you have wage income and file a Schedule C with large losses, you become much more interesting to the IRS, especially if the business activity sounds like it could also be a hobby such as dog breeding or furniture refinishing.
• Claiming rental loss deductions. Real estate losses on rental properties is another area of interest for the IRS, especially those written off by taxpayers who claim to be real estate professionals. If you have a W-2 or other non-real-estate businesses that show high income this can also be a red flag for auditing.
• Operating a small business. Owners of cash-intensive small firms such as taxi companies, hair salons, pet groomers, etc. can often be the target of an audit, so be prepared to substantiate all of your income.
• Owning a foreign bank account. The IRS has been able to obtain the ownership information for offshore bank accounts, especially those in tax havens, and is committed to ensuring that income stored in these accounts is reported by U.S. citizens. Failure to report these accounts can lead to harsh fines.
• Taking higher-than-average deductions. The IRS may pull a return for review if the deductions shown are disproportionately large compared with reported income. But folks who have proper documentation shouldn’t be afraid to claim the write-offs.

While you should definitely take advantage of every tax deduction you are legally entitled to, sometimes it can be difficult to ascertain which deductions are applicable to your specific situation—that’s where our office can help you. Now is the time to contact us to have your return professionally prepared to reduce your chances of being audited for the red flags noted above. But, if you do receive an audit notice, don’t worry, our tax experts can also help you prepare an appropriate response.

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Does Your Business Need to File 1099s? The Initial Deadline of January 31 is Fast Approaching!

If your business spends $600 or more for services from another business or an individual contractor during the tax year, you may have to report the amount on a Form 1099. The requirement to file 1099s applies to all types of businesses, C-Corporations, S-Corporations, LLCs, all partnerships, and sole proprietorships. Forms 1099 are normally issued to unincorporated businesses, however, if your business made payments of $600 or more to a Corporation (C or S) for medical, health care, or fishing activities, or to any law firm, then a Form 1099 is required to be issued.

A 1099 form is typically given to independent contractors as a record of the income that he or she received from your business. There are many different types of 1099 forms, including those used to report income from interest, dividends, real estate and debt cancellation.

Some of the most common types of transactions that you must issue a 1099 for include:

• Professional fees paid to an attorney, doctor or other professional that are made in the course of doing business.
• Payments of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business if the payment was made to an individual or partnership.
• Payments of $600 or more to physicians, providers of medical or health services, or other supplier. These 1099s for medical payments are required for all entities including Corporations.

If you own your own business, you are required to send 1099s to eligible vendors. Failing to do so, or missing the 1099 IRS filing deadline (Feb. 28 for paper filing or Mar. 31 for e-filing), can result in some stiff penalties. For example, filing your 1099s past the due date can result in fines that range from $30 to $100 per 1099 to an annual maximum of $500,000. Failure to issue and file any 1099s subjects you to a minimum penalty of $250 per 1099 with no annual maximum limit on the penalty.

In an effort to reduce the number of businesses avoiding 1099 filing, in 2011 the IRS added two new questions to all federal business tax returns to determine whether any payments were made during the year that would require Form 1099 to be filed and whether or not the business actually filed them. When you sign your tax return, you are stating that, under penalties of perjury, to the best of your knowledge your tax return is accurate and complete. Given how seriously the IRS takes 1099 filing—all business owners should too!

Filing 1099s can be a tedious and time consuming process. With only two weeks to go until the deadline to get 1099s to any eligible recipients you have worked with in the past year, please don’t hesitate to contact our office if you need assistance with your Form 1099 preparation.

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This Tax Year Includes a Baker’s Dozen of Changes to Digest

Happy New Year! Now that the holidays are over, it’s time to get serious about reviewing where you stand from a tax perspective. As you may recall, in 2013 Congress and President Obama made a budget deal to avoid the fiscal cliff which resulted in seven tax increases. In addition to these increases, the introduction of the Affordable Care Act (also known as Obamacare) also included six additional tax increases, for a grand total of 13 new tax hikes which may affect your 2013 tax bill.

The following list details these tax changes. It is worthwhile reviewing it to see which changes are most likely to impact you this tax year:

1. The payroll tax increased to 6.2 percent.
2. The top marginal tax rate increased from 35 percent to 39.6 percent for taxable incomes over $450,000 for couples ($400,000 for single filers).
3. Personal exemptions are being eliminated for taxpayers with adjusted gross incomes (AGI) of more than $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. The tax rate on dividends and capital gains has increased to 20 percent from 15 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Taxpayers who file Married Filing Jointly with AGI of more than $250,000 ($200,000 for those filing as Single) will see an additional 3.8 percent surtax on investment income and another payroll tax hike of 0.9 percent.
7. The "Death Tax" rate was also increased on estates larger than $5 million from 35 percent to 40 percent.
8. For businesses, the full expensing of investments will expire to be replaced by the immediate deduction of capital purchases.
9. Another payroll tax hike of 0.9 percent for the Hospital Insurance portion of the payroll tax will affect those with incomes over $250,000 ($200,000 for single filers).
10. The new medical device tax means that a 2.3 percent excise tax on all sales will be paid by medical device manufacturers and importers.
11. The medical expenses income tax deduction for individuals will be reduced.
12. The corporate income tax deduction for expenses related to the Medicare Part D subsidy is now eliminated.
13. The corporate income tax deduction for compensation that health insurance companies pay to their executives has been limited.

Do any of these 13 tax increases apply to you or your business? If you need help determining how these changes will impact you, please contact our office for assistance.

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IRS Eases the “Use-it-or-Lose-it” Rule for Flexible Spending Plans

With the end of the year on the horizon, many individuals with flexible spending accounts (FSAs) are scurrying to spend residual funds to avoid “losing” them, in accordance with IRS regulations. However, the regulations have now changed with the IRS easing the “use-it-or-lose-it” rule for health flexible spending plans. Individuals with FSAs can now carry over a maximum of $500 to the following year without forfeiture. So now, employees will not have to rush to clean out their accounts by the end of the year, or by March 15 of the following year, if their flexible spending plan has adopted this grace period.

It is important to note that an employer cannot offer a FSA carryover provision and an FSA grace period at the same time. In order to allow for this $500 carry over, employers must amend their plans to adopt the change. However, if an employer’s FSA plan currently allows for the grace period, that provision must be dropped in order to allow for the $500 carryover adoption.

Employers can implement the carryover for 2013 as long as the flexible spending plan is amended by the end of 2014. However, if the plan currently allows the grace period up until March 15, then the plan must be amended by the end of 2013 to formally eliminate this provision.

If you have any questions about this information, please contact us. We are always here to help.

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Should You Apply for Social Security When You Apply for Medicare?

If you’re nearing the customary retirement age of 65, you may be considering when to apply for Medicare and Social Security benefits. This is an important decision that can have significant impact on your financial situation down the road, so it is important to understand how these benefit programs work. In particular, if you are not planning to retire at the full retirement age (FRA) of 65 you should be aware that you are not obligated to apply for Social Security even if you opt-in to Medicare coverage when you are eligible. In fact, doing so can have negative financial consequences down the road.

If you are planning to apply for Medicare benefits soon, make sure you consider whether you would be better off applying for Social Security benefits later, taking into consideration your planned retirement age, your expected income (if you earn more than $15,120 a year when receiving social security you will be subject to the earnings penalty, under which one dollar of Social Security retirement benefits is withheld for benefits before FRA), and, if you are married, the spousal benefit. In many cases, if you plan to work beyond your FRA, delaying your Social Security benefits can mean a bigger payout later on.

Because Social Security retirement benefits are based on lifetime earnings, the size of the retirement benefit check that you collect will depend on your age when you apply for them. If you choose to receive benefits at the earliest retirement age of 62, you will receive less than what you would receive if you wait until 65. And, if you delay your Social Security benefits up to age 70, you will receive a Delayed Retirement Credit (a percentage increase in retirement benefits for each year beyond FRA that you do not take them).

There are several important factors to consider when deciding the best time to take Social Security benefits. If you need assistance determining what the right choice is for you from a financial perspective, please contact our office.

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Don’t Let the Delayed Tax Season Stop You from Being Prepared

The IRS recently announced that, for the second year in a row, it will delay the start of tax season. However, the April 15 filing deadline, which is set by statute, remains in place. Last year it was the fiscal cliff negotiations that pushed back the start of the tax filing period. This year, of course, it is the 16-day government shutdown that put the IRS approximately one to two weeks behind in preparing for the 2014 filing season.

According to an IRS news release, the government entity is “exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December.”  The original start date of the 2014 filing season was January 21, so with a one- to two-week delay, the IRS will potentially start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4.

Although the IRS is behind schedule, we encourage our clients to start preparing now in order to be prepared for filing as soon as the opening date of tax season arrives. Start organizing your tax documents and don’t hesitate to contact our office if you need tax planning advice or have questions about this tax season.

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LLC Owners and Participants: Be Aware of IRS PAL Regulations

If you own a Limited Liability Company (LLC) that you are not actively managing, but you claim tax deductions, this blog post will be of interest to you. Close to 30 years ago, the IRS passive activity loss (PAL) rules (I.R.C. Section 469) were enacted to limit the degree to which money-losing LLCs could be used as tax shelters by their owners claiming losses—such as depreciation, interest, and other deductions. These rules created the passive income or loss category and they apply to all business activities, including real estate rental activity.

There are two types of passive income or losses including income earned from:

1. Businesses in which you don’t materially participate
2. All rental properties that you own

Essentially, the PAL rules are intended to prevent individuals from deducting passive losses (such as from rental activities) from their non-passive income. However, if you own or co-own an LLC on a part-time basis or have someone else manage it on your behalf, as long as you are active in the business you can claim any related losses against your non-passive income, if you meet the IRS definition of "material participation." The IRS defines “material participation” as being “involved in the operations of the activity on a basis which is regular, continuous, and substantial.” There are several tests that the IRS uses to define material participation in a business, based on your activity and the amount of time you spend working. Read about it in detail here.

Another point to keep in mind—the PAL rules state that passive losses from a business activity can only be used to offset passive income from other passive activities. Passive losses in excess of your passive income for the year are capped, but they can be carried forward and deducted in future years when and if you have passive income or if you sell or dispose of the activity that generated the suspended losses. For additional information about PAL tax regulations, please visit IRS.gov.

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You Get What You Give: Tips for Motivating Your Employees Through the Holidays

Halloween is just around the corner and in a few short weeks the calendar will flip to November 1—the unofficial beginning to the winter holiday season that can seriously reduce employee productivity. After all, who has time to put in a solid eight hours a day at the office when there is seasonal shopping, schmoozing, and socializing to be done?

Many business owners have a love-hate relationship with this time of year, due to the fact that employees are less focused on their work. However, there are some easy ways to help stave off the holiday slump and keep your employees as energized about their jobs as they are about maximizing their holiday festivities. Here are a few ideas:

1. Acknowledge that the holidays are happening. Since many of your employees are likely to celebrate a holiday of some kind over the next couple of months, be up front about how your business will handle the holidays. Let your team know the date by which they need to request time-off and which days, if any, holidays will be observed or shorter work hours will be implemented. Don’t forget that a little bit of leeway around leaving early to accommodate holiday gatherings or other seasonal obligations can go a long way toward preserving employee morale and motivation.
   
   
2. Provide a few special perks. Even if your company doesn’t have an end-of-the-year bonus plan or pay out holiday bonuses, you can still provide some low-cost perks to help promote employee productivity at the holidays. Everyone likes to feel appreciated for their hard work, so consider offering your team members a few hours away from the office on a selected day to finish holiday errands or to help at a community event. Bringing in some healthy snacks to keep your staff energized as they do their work is also a great idea. These small gestures show that you care about your staff, which tends to motivate employees to work harder in return.
   
   
3. Celebrate as a team. While few people expect that work will be fun every day, investing time to build camaraderie, especially around the holidays, is a great way to help employees feel more engaged and enthusiastic all year long. Consider hosting a holiday breakfast or lunch during the workday instead of an after-hours party. Your employees will thank you for not adding another event to their already busy personal schedule! To help reduce the budget burden, you can even make your get-together a potluck where everyone brings their favorite seasonal dish. This can help to keep the celebration inclusive of all holidays that are recognized at this time of year.

With a little bit of thought and advance preparation, you can help to keep your employees engaged and productive through the holiday season—and beyond. You may even establish a new company tradition and a spirit of teamwork that will last well into the new year.

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The Medicare D Notification Deadline is Oct. 15 for Employers Providing Prescription Drug Coverage

Employers providing healthcare insurance that includes prescription drug benefits are required to notify Medicare-eligible employees by October 15 of each year whether their drug benefit is "creditable coverage," meaning that it is expected to cover, on average, as much as the standard Medicare Part D prescription drug plan.

The Centers for Medicare and Medicaid Services (CMS) require that companies provide the notice before the annual Medicare Part D election period, October 15 to December 7 each year for coverage beginning January 1. The creditable-coverage notice must be given to all Part D-eligible individuals who are covered under, or apply for, an employer's prescription drug benefits plan. This requirement applies to Medicare beneficiaries who are active employees and those who are retired, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage.

There are two CMS disclosure requirements which include:

1. Providing a written disclosure notice to all Medicare eligible individuals annually who are covered under a company’s prescription drug plan, prior to October 15 each year and at various times as stated in the regulations, including to a Medicare eligible individual when he/she joins the plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents.
   
   
2. Entities must complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. This requirement does not pertain to the Medicare beneficiaries for whom entities are receiving the Retiree Drug Subsidy (RDS).

For complete guidance and sample disclosure notices for this requirement, please visit the CMS Creditable Coverage website.

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Get a Head Start on Tax Season in Four Simple Steps

While the end of the year may seem like it’s a long time from now, it’s only three short months away. When you factor in the hectic weeks of the coming holiday season, that really only leaves a few weeks to pull your tax information together to avoid the stress that being unprepared for tax season can bring.

Now is the time to think about what information you will need for the 2013 tax filing season and the steps you can take in the next few months to minimize your tax burden. To help you get a jumpstart on your end-of-year planning and organization, we’ve compiled the following tips.

1. Take a look at last year’s income tax return and determine what documentation you will need to complete this year’s return.
   
   
2. Review the expenses, retirement contributions, and charitable giving that you have planned before year-end to determine if there are any additional deductions that you may still be able to capture for this tax year.
   
   
3. Organize your receipts and invoices by category and start scanning them so you are prepared for a paperless tax preparation process.
   
   
4. If you’re not already comfortable using your portal on our website, make sure to check how the process of uploading your tax documents works and how to review your return online so these tasks are quick and easy for you during tax season.

Getting a head start on your taxes now will benefit you come tax time. Providing us with your documentation as early as possible will allow us to process your return sooner so you can receive any tax refund you may be eligible for more quickly. In addition, preparing now will also help you avoid the stress of scrambling for information with a looming tax deadline before you. And remember, we are always here to help. If you have any questions, please give us a call.

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Employers Must Provide Notification of Health Insurance Options to Employees by October 1, 2013

The opening of the government’s Health Insurance Marketplace (HIM) on October 1 is fast approaching and with it comes a new requirement to Section 18B of the Fair Labor Standards Act that all businesses should be aware of. By October 1, 2013 employers must provide written notices about health insurance options, including notification of the new health insurance marketplace, to their employees. This requirement includes all current employees regardless of the hours they work or their health benefit enrollment status.

Employees can be notified by First Class mail or using email. For those employees hired after September 30, 2013, notices about health benefit options must be provided at the time of hiring, which is a change from the current window of 14 days.

The Department of Labor website details the information that must be included in the employee notices and also has links to model notices that employers can use. These model notices address both employers who do offer health insurance and those who do not. There is also an updated model notice for COBRA elections available from the Department of Labor website. According to the Department of Labor, all model notices must include employees’ identifying and contact information.

For employers providing health insurance, the Department of Labor must also provide information about which of their employees are offered coverage, the eligibility requirement for coverage, and a statement that addresses whether the cost of the coverage is intended to be affordable to each employee based on their wages.

The Healthcare Reform Act is bringing many changes that businesses should be aware of. We will provide periodic updates about this important legislation and its impact on individuals and businesses. We also recommend visiting www.healthcare.gov for the most up-to-date information.

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College Tuition and Taxation 101

The beginning of September is synonymous with the back-to-school season. If you have a child attending college, or if you are a student yourself, September is also likely to be synonymous with the beginning of annual tuition payments. While attending and paying for college may be taxing in many ways, there is some good news when it comes to tax deductions and credits related to college tuition.

As part of The American Taxpayer Relief Act, the legislation passed by Congress to avoid a “fiscal cliff” and maintain tax cuts, several tax benefits have been extended to help ease the burden of paying for classes at eligible education institutions. Tax benefits include:

The American Opportunity Credit, previously known as the Hope Credit, provides an annual credit of $2,500 per student for the costs of tuition, fees, and course materials for the first four years of an individual's post-secondary education. This tax credit is available to households with a modified adjusted gross income of $80,000 or less for single filers or $160,000 or less for married filers filing jointly.

The Lifetime Learning Credit can also lower a household's tax burden by reducing the cost of undergraduate or graduate education, even for those students who choose to take only one class at a time. The tax credit can be applied to 20%, or $2,000, of the first $10,000 of college tuition and related expenses each year. It can be used for approved expenses incurred by any member of a household enrolled at an eligible education institution.

Tuition-based tax deductions can be used by single tax filers with income between $65,000 and $80,000 and married joint filers with an income between $130,000 and $160,000.These deductions allow tax filers to claim $2,000 in tuition and related fees, depending on their tax situation. Taxpayers do not have to itemize in order to claim this benefit.

Employer-sponsored tuition assistance deductions may also be used to reduce your tax burden. The IRS allows an employee to exclude taxable income up to $5,250 per year when they receive employer-provided tuition assistance for undergraduate or graduate classes. Employers who offer tuition assistance to their employees can also deduct these costs as a business expense.

While we have outlined some of the most common tax deductions and tax credits available to individuals paying college tuition, there are many variables to consider when planning the most effective tax strategy for your unique situation. We would be happy to discuss your options for mitigating your tax expenses and reducing the costs of college education. Contact our firm today to speak with one of our tax professionals.

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Employee Theft: 4 Tips for Protecting Your Business

Given the tough economy over the past few years, it has been particularly difficult for business owners and the individuals they employee to thrive financially. Couple the poor economic climate with the fact that many businesses, especially small ones, have few controls in place to prevent employee theft and you get statistics like these reported by the National Federation of Independent Business:

• 30%─the average percentage of employees who do steal from their employer.
• 60%─the average percentage of employees who will steal if given a motive and the opportunity.
• $4,500─the amount of money per employee that is stolen from small businesses each year, totaling an estimated $600 billion per year in losses.

In addition to these grim numbers, according to the U.S. Department of Commerce, about a third of all business failures each year can be attributed to employee theft and other crimes perpetrated by staff members. So what can businesses do to protect themselves from potentially devastating losses as a result of employee theft? Here are four tips to help minimize the likelihood that employee theft becomes a problem in your organization:

1. Make employee fraud prevention a priority and part of your business culture. Develop an ethics policy for your company that clearly states that you have a zero-tolerance policy for employee theft and that you encourage employees to report any suspicious activity to management. In addition, let employees know that audits are done regularly and may also be conducted spontaneously. Research shows that openly addressing the topic of employee theft can be a very effective deterrent.

2. Use an electronic solution or outsource your accounting. Using an accounting software system that allows you to set authority levels and track employee access and activity is an effective way to monitor your business finances for unusual activity. For an added level of security, outsourcing your bookkeeping and payroll to a third party eliminates the chance of employee theft through these activities and also provides a regular audit process.

3. Know and train your employees. Taking the time to conduct proper background checks is an essential part of mitigating losses associated with employee theft. Verify job applicants’ education and employment histories. Be sure to call references to make sure a “perfect” candidate doesn’t have a criminal record or a history of suspected fraud or theft. If an employee consents, you can also check their credit score and credit history to determine how fiscally responsible they are or if they have any “red flags” indicating a lack of financial stability. Statistics show that one of the most common reasons that employees steal from their employer is to ease their own financial hardship.

4. Keep your finger on the financial pulse of your business. Although having trustworthy employees is essential, it is never wise to remove yourself completely from reviewing your company’s financial statements and account activity. Taking some time each month to look at the flow of transactions through your business accounts will ensure that you can identify any unusual activities right away. Using an online banking service can help to make regular reviews of bank reconciliations more efficient. The time you spend ensuring the integrity of your company’s financial flow will pay dividends in terms of loss prevention.

While having an atmosphere of trust and teamwork is essential for all businesses, it is equally, if not more important, to create the proper culture and controls to protect the financial stability of your company. The tips outlined above are a great foundation on which to build a customized plan that will mitigate the risk your company faces from employee theft.

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Rest Easy: Know the Tax Implications of Renting Your Vacation Home

If you’re lucky enough to own a vacation home, or are thinking about investing in one, you should be aware of the tax implications associated with this type of property, particularly if you are planning to rent it at least some of the time. It is also important to note that the IRS definition of a vacation property encompasses not only houses, cottages, and condominiums, but also mobile homes, recreational vehicles, and boats. In addition, remember that you may be obligated to pay state and local taxes on the rental of your vacation property as well as federal taxes.

The tax liabilities associated with a vacation home and the deductions you can claim against the property primarily depend on the time you spend there, or, as the IRS calls it, your “personal use” of a second home. The IRS definition of personal use covers time that you or any member of your family, including your spouse, children, siblings, parents, grandparents, and grandchildren spend at your vacation property. Personal use also includes renting your vacation home to anyone for less than fair market value, trading your place to stay somewhere else and donating your property for charitable use.

Let’s look at two scenarios that illustrate how the tax rules apply to vacation properties that are rented at least occasionally:

Scenario 1: You rent your vacation property most of the time. The IRS rules state that if you spend fewer than 14 days or 10% of your time each year at your vacation home, you can write off expenses associated with owning a rental property. These deductions are allowed in proportion to the amount of time your property is rented. For example, if you have a cottage that you rent for half of the year, then half of your mortgage interest, property taxes, utilities, insurance costs, and repair expenses would be deductible against rental income. In addition, you can deduct the other half of your second home’s mortgage interest and property taxes against your other income. You can also write off 100% of the cost of advertising for tenants or other expenses directly related to renting. Keep in mind that you have to show evidence of actively managing your vacation property to qualify for these tax deductions such as screening potential tenants, writing rental terms, and arranging for any necessary property repairs.

Scenario 2: You spend more than 15 days a year at your vacation home and also rent it periodically. The tax implications in this scenario are based on how much time you or your family spends at your vacation retreat and the length of stay of your renters.

If the personal time you spend at your vacation property is greater than the 14 days or 10% of the year mentioned above, the IRS states that you must divide your total expenses between rental use and your personal use based on the number of days used for each purpose. For short-term rental situations of 14 or fewer days, rental income is tax-free. For longer rental periods, you need to claim the rental income and deduct eligible expenses in proportion to the percentage of time that each rental period represents of the total days of property use. This is where careful record keeping is crucial.

In this scenario, you will not be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, and casualty losses, and rental expenses like realtors' fees and advertising costs). However, you may be able to carry forward some of these rental expenses to the next tax year, subject to the gross rental income limitation for that year.

Having a vacation property in a relaxing location is a wonderful way to get away from the stresses of everyday life. Renting your retreat can also help to provide extra income and help to reduce your tax obligations. It is critical that if you do own a second home, a boat, or other vacation property, you keep track of rental income and when it is occupied for personal use and rental use so that when you are preparing to file your taxes your sanctuary does not become another source of stress.

If you have any questions about this information, please contact our firm—we are always here to help.

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Mid-Year Tax Planning Can Save You Time—and Money

As hard as it is to believe, the year is already half over. Although it may seem like the April tax deadline was just a few weeks ago, the reality is it’s time to start thinking about your 2013 taxes. And, if you spend some time now on mid-year tax planning, it can really pay off next April—which is only nine short months away. In addition, taking stock of where your business is halfway through the year can help you determine any changes you need to make in order to reach the goals that you set for 2013.

When you look at how your business has performed in the first two quarters of the year, one of two scenarios is likely to emerge:

1. You’re having a great year. Congratulations! Things are going well and you’re at or ahead of where you thought you would be in terms of income and profits. If this is the case, you’ll want to think about ways to mitigate your tax burden, such as saving additional money for retirement in a 401(k) or investing back in your business by purchasing equipment to take advantage of potential tax write-offs. If you have larger than expected profit margins, you may want to consider increasing your estimated tax payments to make sure you don’t incur penalties for underpaying your taxes.
   
   
2. You could be doing better. If your financial statements aren’t where you thought they would be or your business has experienced significant losses that you don’t believe will be offset by a stellar second half of the year, you may want to think about reducing your estimated tax payments to conserve cash. Remember, if you overpay your 2013 taxes you won’t receive a refund until next year, which could hinder this year’s cash flow.

No matter whether you fit under scenario 1 or 2, proper tax planning is a necessity to ensure your ongoing financial success. Consider the following:

Catch Up on Your Record Keeping
If the summer months are slow for your business, it is a good idea to set aside some time to ensure that your tax-related records are organized and up-to-date. Getting your travel, entertainment, and other tax-deductible expense records in order now can help ease the rush when next tax season rolls around. Keep in mind that in addition to physical receipts, you need to record the date and purpose of your business expenses. For business travel using a personal vehicle, make sure to keep a detailed record of the miles driven for business, the date on which they were driven, and the purpose of each trip. You should also track your odometer readings at the beginning and the end of the year.

Talking Taxes Now Can Save You Money Later
Don’t wait until tax season to learn what you could have done this year to reduce your taxes. Contact one of our professionals today. We’ll help you put the strategies in place to minimize your tax obligations based on the unique needs of your business. We can also make sure that your record keeping complies with the most current tax requirements.

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Obama Administration Announces Delay to Part of Affordable Care Act

On Tuesday, July 2, the Obama administration announced that it is delaying the requirement that businesses with more than 50 employees provide health insurance to their workers or pay a penalty. The delay extends to 2015. The announcement by the IRS comes after numerous complaints from businesses that the requirements were too complicated and difficult to implement in time.

Still on schedule are other key parts of the law, including the health exchanges where individuals can buy insurance. The exchanges will open on October 1, according to Valerie Jarrett, a senior adviser to President Obama. The delay also does not change the individual mandate, which requires most Americans to purchase insurance. Some consumers may receive subsidies to help them pay for the insurance depending on their incomes.

Jarrett stated, "As we make these changes, we believe we need to give employers more time to comply with the new rules. Since employer responsibility payments can only be assessed based on this new reporting, payments won't be collected for 2014."

The delay gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.

"We commend the administration's wise move to delay the employer reporting and penalty obligations under the Affordable Care Act," said National Retail Federation President Neil Trautwein. "This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."

This does not affect businesses with fewer than 50 workers, who were already exempt from that rule. Most large businesses already offer coverage to their employees.

Various parts of the law have taken effect since its passage in 2010, including allowing children up to age 26 to remain on their parents' insurance plans and discounts for prescription drugs for Medicare patients. More young Americans have health insurance than before the law, because of that change, and the discounts have saved Medicare recipients billions of dollars.

Source: USA Today

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What Does the Affordable Care Act (Obamacare) Mean to Businesses?

One of the key mandates of the Affordable Care Act (ACA), or “Obamacare” as the law is commonly known, is the creation of health insurance exchanges in each state. The intention of these exchanges is to give individuals and small businesses a means for buying affordable health insurance. With the October 1st launch date for the new health care exchanges fast approaching, business owners should be aware of the financial and tax implications related to them. Here are some important highlights of the new health insurance mandates to help your business plan ahead.

• The health insurance requirements of the ACA differ for businesses with 50 or more full-time equivalent employees (FTEs) and those with fewer than 50 FTEs. The number of FTEs your business has determines whether you must provide employees with health insurance and any penalties you will have to pay if you choose not to. The number of FTEs you have also determines if your business is eligible for tax credits and participation in the government’s Small Business Health Options Program (SHOP).
  
  
• Mandatory provision of health insurance applies only to companies with 50 or more FTEs. Beginning October 1, if your business has 50 or more FTEs you will need to choose between providing affordable care to all full-time employees or paying a penalty. If you have fewer than 50 employees, you aren’t mandated to provide health insurance, but you may wish to consider using the SHOP marketplace in your state to offer employees the benefit of health insurance coverage.
  
  
• For companies with 50 or more FTEs, the penalty for not offering health insurance is $2,000 per person, excluding the first 30 employees. Depending on the cost of insurance product premiums, it may, from a purely financial perspective, make sense not to offer insurance and pay a penalty if it costs less. However, these economic savings must be balanced against the costs of lower employee satisfaction and potential staff turnover if health insurance is not part of your benefit package.
  
  
• Employers with 50 or more FTEs may be subject to the Employer Shared Responsibility Payment in 2014. This payment applies to employers with 50 or more FTEs who don't offer health insurance that meets certain minimum standards. According to IRS guidelines, these standards include having at least one employee who could purchase their insurance for less money through the government’s health insurance exchange. In other words, if your employees will save money by buying health insurance through the government exchange, you may be subject to the Employer Shared Responsibility payment. Generally, to avoid the Employer Shared Responsibility Payment, an employer must provide insurance with a premium cost for employee-only coverage that is no more than 9.5% of an individual’s annual household income.
  
  
• Until 2016, the SHOP marketplace is only available to employers with fewer than 50 employees. Starting in 2014, small businesses with 50 or fewer FTEs (or 100 FTEs in Hawaii) can use the government’s SHOP marketplace to purchase health insurance for their employees. In 2016, small businesses with 100 or fewer FTEs will also be able to participate in the SHOP marketplace. It is important to remember that although small businesses are not mandated to use SHOP insurance products, they will not qualify for health insurance tax credits if they purchase their insurance outside of the program.
  
  
• If your business has fewer than 25 full-time equivalent employees, you may qualify for employer health care tax credits. To qualify for the Small Business Health Care Tax Credit, your company must:

1. 1. Employ 25 or fewer employees making an average of $50,000 a year or less
   2. Pay at least 50% of full-time employees' premium costs
   3. Buy insurance through the SHOP

Starting in 2014, the tax credit is worth up to 50% of your contribution toward employees' premium costs (up to 35% for tax-exempt employers) and is only available to companies purchasing health insurance through the SHOP marketplace.

As you can see, the introduction of government health insurance exchanges will have important implications for business owners. If you have questions about the tax implications of the new health insurance mandates on your business, please give us a call. In addition to the information we’ve provided, you may want to learn more at www.healthcare.gov.

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What’s The Real Secret to Success? A "Giver" Instinct

For years, aggressive, "do-what it takes" attitudes have been attributed to achieving professional success. Having at least a little bit of the "killer" instinct is what differentiates the winners in business, right? Perhaps in some cases, but according to research conducted by Wharton Business School professor, Adam Grant, the opposite is true. Success—both personal and professional—is actually the result of having a "giver" instinct.

In his New York Times best-seller 'Give and Take: A Revolutionary Approach to Success' Grant identifies three personality types: "givers," "takers" and "matchers." In a nutshell, "givers" are likely to make unconditional contributions of their time, talent, and material resources. In contrast, "takers" try to obtain maximum personal benefit from situations while contributing as little as possible. In the middle, are "matchers," who give to “givers” and withhold help from “takers.”

While very few of us are always "givers," "takers," or "matchers," many of us have a default style, which can influence our success or failure. For example, in personal relationships, the "giver" style tends to promote success while “taker” and “matcher” styles do not usually fare as well.

The same is true when it comes to working relationships and company culture. Research shows that individuals and companies with a "giving" instinct are often able to achieve greater and more meaningful success than those with “taker” or “matcher” tendencies. Why? Adam Grant believes that in part, it is because individuals and companies who are “givers” win the genuine support of others. This creates relationships and cultures based on reciprocity—and everybody wins. "Takers," on the other hand, may achieve success, but it is likely to be short-lived and not rooted in meaningful or equitable relationships.

So how do you nurture the "giver" instinct in yourself and your company? Start with small actions such as recognizing teams instead of individuals for work well done or encouraging your team members to mentor a colleague without asking for a return favor. In addition to fostering a sense of internal goodwill, encouraging a “giver” mentality with customers can also be one of the best ways to win referrals and repeat sales—not to mention a great way to build a successful business!

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Low- or NO-cost Marketing for Small Businesses

We’ve said it before, and we’ll say it again… marketing is a key component of any successful business. So, we want to provide you with as much helpful information as we can in this area. We know marketing isn’t an easy task. It takes time and money. Of course, we understand that you have to keep a focus on the bottom line, which is why we are offering a few marketing tips for those of you on a budget. Being budget conscious doesn’t mean you can’t build a strong marketing program! Consider these ideas:

• Network—Networking is still one of the most effective marketing tactics, and it can be accomplished for free or very little cost. Social networks like Twitter and Facebook are free, and you can build a network of followers in a relatively short time. Attending onsite networking events like trade shows doesn’t have to be pricey either. You can avoid spending money on a booth and simply attend the event to network and pass out business cards.
  
  
• Run a Contest—Challenge your customers to do something, like help you name a product or create a logo for your business. The winner can get recognition on your website and whatever gift you deem appropriate. You’ll be surprised at how helpful customers want to be and the great rapport that you can develop.
  
  
• Be Social—Chances are that your customers and prospects use social media. Invest in creating a Twitter or Facebook account. Building fan and profile pages offers a forum for getting relevant content and special offers out to the public. Even better, it doesn’t cost a thing…except a little of your time.
  
  
• Reward Loyalty—It’s important to remind your customers to refer business to you and to reward them when they do. Small gifts like restaurant gift cards or discounts on your products or services go a long way and accelerate loyalty.

We want to provide you with as much information as we can to support your success. As business owners, we know the importance of marketing. Remember, as your trusted advisor, we are here to help at every level.

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Do a Little ‘Outdoor’ Marketing This Summer

Whether your business sells seasonal products or provides services throughout the year, summer is a HOT season for marketing. The warmer weather offers some flexibility with marketing events and campaigns, and that means you can be creative. Most people like to get out during the summer months, so the potential to attract prospects and clients to your marketing events is higher. The following are a few creative ideas to spice up your summer marketing efforts.

Organize a Community Service Event: Some businesses allot some time and money to support causes that are important to them and their customers. Take the time to organize a community service day to help out a good cause, and get local residents and your employees involved.

Host an Open House Cookout: Invite prospects and clients to a fun open house and supply them with good old-fashioned cookout food like hot dogs, salads, and desserts. Cookouts are always a good time to offer a casual and comfortable venue for getting to know your clients better and meeting potential new clients.

Send Out Summer-Related Promotional Items: People tend to spend much more time outside during the summer months, so offer them cool promotional items (that are clearly branded). Items like water bottles, lip balm, or outdoor toys like beach balls are fun and practical promotional items.

Offer Your Customers a Few Summer Tips: Offer your clients some seasonal tips. As a business owner, you most likely communicate with your customers throughout the year via a client newsletter or other marketing campaigns. Send a special summer newsletter to customers chock-full of tips for staying safe in the sun, events to do in the area, or barbecue recipes—just to name a few. Include information about sales or new products and services your business plans to offer during the summer while you have their attention!

These are just a few summer marketing ideas. Take a moment to brainstorm some of your own.

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Harness the Power of the Mobile Office— Enjoy the Freedom of Being Wire-free

Technology is a wonderful thing. We know it in our firm because we use advanced technology to our advantage—that is, working anytime and from any device, having 24/7 access to files, and the ability to work from home, a client’s site, or the airport! And now that just about any gadget you can imagine is portable and affordable, your small business doesn’t have to be confined to your office or your dining room table.

We encourage you to harness the power of technology (like we have) to operate more efficiently and free you from your wire tethers. Consider all the advantages of going mobile:

• Experience increased productivity—Eliminate wasted downtime. Work anywhere, anytime, and from any device!
  
  
• Explore new promotional opportunities—When you can work anywhere, you can attend more onsite networking events.
  
  
• Enjoy streamlined business processes—when everything is online, you eliminate any barriers to accessing files or communicating in real time with clients or your staff.

Building a mobile office requires that you select the right technologies to support an efficient digital work environment—from laptops and tablets to smartphones and online document management applications. Take some time to research the technologies that will work for you and build your mobile office. You’ll love the freedom!

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A Not-So-Ordinary Tax Season is History

This was more than your typical tax season. With a plethora of changes to the tax code and a late start brought about by 11th hour congressional decisions, it was an even more harried and intense process than usual. We appreciate the good working relationships with our clients that helped us keep moving to meet the April 15 deadline—thank you!

With tax season just now moving into the rearview mirror, it’s hard to believe that we’re already well into the second quarter of the year. It’s time to focus on financial strategies and planning to assure that you come in for a perfect landing at the end of 2013.

To do this, you need a trusted advisor—someone who stays engaged throughout the year and has the perspective, acumen and commitment to understand your financial complexities and management implications.

We’re here to make that journey with you. We’re all exhaling in the wake of the tax deadline, but let’s not allow meaningful time to get away from us before we reengage and give direction to business in the coming months.

Consider us your trusted advisor and advocate, and call us right away to consider your plan for the year.

Here’s wishing you a successful 2013!

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E-Filing – A Reminder WHY It’s the Way to Go!

Hopefully, you are part of the more than 80% of taxpayers that take advantage of e-filing. If you’re not, we want to remind you WHY you should. Take a moment to read our short (but very convincing) list. The April 15th tax deadline is just around the corner, so we wanted to dedicate one last post to remind you of the value of e-filing your return.

1. Safe & Secure—Tax preparers are required to meet strict guidelines and provide advanced encryption technology for e-filing—supporting the most secure method. E-filing is far more secure than mailing a paper return.
   
   
2. Faster Refunds —E-filing typically promises a faster refund than paper filing a return. The IRS issues most refunds in less than 21 days, and you have the option of direct depositing your refund. Combining e-file with direct deposit is the fastest way to get your money.
   
   
3. Accurate & Complete—There is no better way to ensure that your tax return is accurate and complete than to e-file. Remember, if your return is incomplete or has errors, it will take far longer to process.
   
   
4. Payment Options—If you owe tax, you can e-file early and set an automatic payment date any time on or before the April 15 due date. You also have several payment options from which to choose, including check, money order, debit or credit card, or electronic transfer of funds from your bank account.

Our goal is to make the tax return process as easy for you as possible. Please contact our firm for more information. We are here to help!

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4 Quick Tips to Ready Yourself for April 15

The tax deadline always seems to sneak up on taxpayers. Don’t fall into this trap and cause yourself added stress. If you’ve yet to pull things together…start preparing now. The following are four easy tips to be sure that you are ready for the April 15 tax deadline:

• Locate Last Year’s Tax Return—Previous years’ returns serve as an excellent guide for preparing for the current tax season.
  
  
• Organize Recordkeeping—Start to organize your source documents, including mileage logs, charity receipts, invoices, etc. Avoid scrambling to pull these items together at the last minute.
  
  
• Seize Opportunities to Lower Taxes—For example, if you are self-employed there’s still time to open and fund a SEP IRA (Simplified Employee Pension Individual Retirement Account). You can invest up to 25 percent of your self-employment income or $50,000, whichever is less.
  
  
• Ask Questions—If you have questions regarding your tax return, call our office. Being prepared means having current, sound information and advice from your tax professional. We are here for you.

Feel free to contact us if you have any questions. Now, go get organized…

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Spring is Just Around the Corner… and so is April 15th

As we look forward to the end of winter and the launch of spring, that also means the April 15th tax deadline is that much closer. Being prepared is the best way to ensure a smooth tax season and minimize any surprises. So, if you’ve yet to dig in and give some dedicated focus to your taxes, here are a few suggestions to get you going:

• Begin Gathering Source Documents—Start getting all of your documents ready to go. Pull together receipts, invoices, statements, etc.
  
  
• Get Organized—Be sure to organize your documents properly. This will help you identify any missing pieces. Practicing good recordkeeping will make tax season far less stressful.
  
  
• Start Scanning for a Paperless Tax Season—If you haven’t already, now is a good time to adopt a paperless process. It’s so much easier to operate in a digital environment…with invoices, receipts, and all other documents available with the click of the mouse. Going into tax season, you’ll feel a big sense of relief by having all your documents stored electronically.
  
  
• Use Your Portal—We developed our advanced online portals to provide you with an easy-to-use and convenient system to both send us your tax source documents and access your completed returns. If you are not already using your portal, take a few minutes to get familiar with the system. You will love the 24/7 access and direct line of communication with our firm!

Give our firm a call if you have questions or require some personalized assistance. Here’s to a smooth and worry-free tax season!

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E-Filing is the Way to Go – 4 Top Reasons

More than 80% of taxpayers file electronically…and for good reason. Or rather, good reasons (plural)—four to be exact. E-filing offers an efficient and highly secure method for filing your tax return. And if that’s not reason enough, take a moment to read through our Top 4:

1. Accurate & Complete—E-filing is the best way to ensure that you file an accurate and complete tax return. Incomplete returns or those that have errors take far longer to process.
   
   
2. Safe & Secure—Tax preparers (and software vendors) are required to meet strict guidelines and provide advanced encryption technology for e-filing—supporting the most secure method.
   
   
3. Faster Refunds —E-filing typically promises a faster refund than filing a paper return. The IRS issues most refunds in less than 21 days, and you can select to have your refund direct deposited. Combining e-file with direct deposit is the fastest way to get your refund.
   
   
4. Payment Options—If you owe tax, you can e-file early and set an automatic payment date any time on or before the April 15 due date. You also have several payment options from which to choose, including check, money order, debit or credit card, or electronic transfer of funds from your bank account.

Our goal is to make tax season as stress-free for our clients as possible. Please contact our firm for more information. We are here to help!

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Electronic Filing Starts January 30th

As of January 30, 2013, the IRS will begin processing individual income tax returns for the majority of United States taxpayers. Be sure to get your tax documents organized now. You can use our Client Center on our website to securely upload your documents to our office.

A few items to note as we move into February:

• E-file and direct deposit are the fastest ways to get your tax refund. Once we've completed your return, you'll want to allow our firm to e-file it by completing the appropriate electronic filing authorization form that accompanies your tax return.
• The IRS does not anticipate any associated tax refund delays, and expects to issue 9 out of 10 tax refunds in 21 days or less.
• According to the IRS, taxpayers claiming the residential energy credit and businesses claiming depreciation and amortization and general business credit will be allowed to file tax returns in late February or early March due to additional forms and processing requirements.

As always, if you have any questions, please contact our firm.

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New Tax Bill… What it Means to You

With the passing of the new ‘Fiscal Cliff” Act, taxpayers need to be aware of how it may affect them in the coming years. As such, we’ve compiled detailed information for you within this blog post.

The following are the act’s main tax features:

Individual Tax Rates—All the individual marginal tax rates under EGTRRA and JGTRRA are retained (10%, 15%, 25%, 28%, 33%, and 35%). A new top rate of 39.6% is imposed on taxable income over $400,000 for single filers, $425,000 for head-of-household filers, and $450,000 for married taxpayers filing jointly ($225,000 for each married spouse filing separately).

Phase-out of Itemized Deductions & Personal Exemptions—The personal exemptions and itemized deductions phase-out is reinstated at a higher threshold of $250,000 for single taxpayers, $275,000 for heads of household, and $300,000 for married taxpayers filing jointly.

Capital Gains & Dividends—A 20% rate applies to capital gains and dividends for individuals above the top income tax bracket threshold; the 15% rate is retained for taxpayers in the middle brackets. The zero rate is retained for taxpayers in the 10% and 15% brackets.

Alternative Minimum Tax—The exemption amount for the AMT on individuals is permanently indexed for inflation. For 2012, the exemption amounts are $78,750 for married taxpayers filing jointly and $50,600 for single filers. Relief from AMT for nonrefundable credits is retained.

Estate & Gift Tax—The estate and gift tax exclusion amount is retained at $5 million indexed for inflation ($5.12 million in 2012), but the top tax rate increases from 35% to 40% effective Jan. 1, 2013. The estate tax “portability” election, under which, if an election is made, the surviving spouse’s exemption amount is increased by the deceased spouse’s unused exemption amount, was made permanent by the act.

Permanent Extensions—Various temporary tax provisions enacted as part of EGTRRA were made permanent. These include:

• Marriage penalty relief (i.e., the increased size of the 15% rate bracket (Sec. 1(f)(8)) and increased standard deduction for married taxpayers filing jointly (Sec. 63(c)(2))
• The liberalized child and dependent care credit rules (allowing the credit to be calculated based on up to $3,000 of expenses for one dependent or up to $6,000 for more than one) (Sec. 21)
• The exclusion for National Health Services Corps and Armed Forces Health Professions Scholarships (Sec. 117(c)(2))
• The exclusion for employer-provided educational assistance (Sec. 127)
• The enhanced rules for student loan deductions introduced by EGTRRA (Sec. 221)
• The higher contribution amount and other EGTRRA changes to Coverdell education savings accounts (Sec. 530)
• The employer-provided child care credit (Sec. 45F)
• Special treatment of tax-exempt bonds for education facilities (Sec 142(a)(13));
• Repeal of the collapsible corporation rules (Sec. 341)
• Special rates for accumulated earnings tax and personal holding company tax (Secs. 531 and 541)
• Modified tax treatment for electing Alaska Native Settlement Trusts (Sec. 646)

Individual Credits Expired at the End of 2012—The American opportunity tax credit for qualified tuition and other expenses of higher education was extended through 2018. Other credits and items from the American Recovery and Reinvestment Act of 2009 that were extended for the same five-year period include enhanced provisions of the child tax credit under Sec. 24(d) and the earned income tax credit under Sec. 32(b). In addition, the bill permanently extends a rule excluding from taxable income refunds from certain federal and federally assisted programs (Sec. 6409).

Individual Provisions Expired at the End of 2011—The act also extended through 2013 a number of temporary individual tax provisions, most of which expired at the end of 2011:

• Deduction for certain expenses of elementary and secondary school teachers (Sec. 62)
• Exclusion from gross income of discharge of qualified principal residence indebtedness (Sec. 108)
• Parity for exclusion from income for employer-provided mass transit and parking benefits (Sec. 132(f))
• Mortgage insurance premiums treated as qualified residence interest (Sec. 163(h))
• Deduction of state and local general sales taxes (Sec. 164(b))
• Special rule for contributions of capital gain real property made for conservation purposes (Sec. 170(b))
• Above-the-line deduction for qualified tuition and related expenses (Sec. 222)
• Tax-free distributions from individual retirement plans for charitable purposes (Sec. 408(d))

Business Tax Extenders—The act also extended many business tax credits and other provisions. Notably, it extended through 2013 and modified the Sec. 41 credit for increasing research and development activities, which expired at the end of 2011. The credit is modified to allow partial inclusion in qualified research expenses and gross receipts those of an acquired trade or business or major portion of one. The increased expensing amounts under Sec. 179 are extended through 2013. The availability of an additional 50% first-year bonus depreciation (Sec. 168(k)) was also extended for one year by the act. It now generally applies to property placed in service before Jan. 1, 2014 (Jan. 1, 2015, for certain property with longer production periods). Other business provisions extended through 2013, and in some cases modified, are:

• Temporary minimum low-income tax credit rate for non-federally subsidized new buildings (Sec. 42)
• Housing allowance exclusion for determining area median gross income for qualified residential rental project exempt facility bonds (Section 3005 of the Housing Assistance Tax Act of 2008)
• Indian employment tax credit (Sec. 45A)
• New markets tax credit (Sec. 45D)
• Railroad track maintenance credit (Sec. 45G)
• Mine rescue team training credit (Sec. 45N)
• Employer wage credit for employees who are active duty members of the uniformed services (Sec. 45P)
• Work opportunity tax credit (Sec. 51)
• Qualified zone academy bonds (Sec. 54E)
• Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements (Sec. 168(e))
• Accelerated depreciation for business property on an Indian reservation (Sec. 168(j))
• Enhanced charitable deduction for contributions of food inventory (Sec. 170(e))
• Election to expense mine safety equipment (Sec. 179E)
• Special expensing rules for certain film and television productions (Sec. 181)
• Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico (Sec. 199(d))
• Modification of tax treatment of certain payments to controlling exempt organizations (Sec. 512(b))
• Treatment of certain dividends of regulated investment companies (Sec. 871(k))
• Regulated investment company qualified investment entity treatment under the Foreign Investment in Real Property Act (Sec. 897(h))
• Extension of subpart F exception for active financing income (Sec. 953(e))
• Lookthrough treatment of payments between related controlled foreign corporations under foreign personal holding company rules (Sec. 954)
• Temporary exclusion of 100% of gain on certain small business stock (Sec. 1202)
• Basis adjustment to stock of S corporations making charitable contributions of property (Sec. 1367)
• Reduction in S corporation recognition period for built-in gains tax (Sec. 1374(d));
• Empowerment Zone tax incentives (Sec. 1391)
• Tax-exempt financing for New York Liberty Zone (Sec. 1400L)
• Temporary increase in limit on cover-over of rum excise taxes to Puerto Rico and the Virgin Islands (Sec. 7652(f))
• American Samoa economic development credit (Section 119 of the Tax Relief and Health Care Act of 2006, P.L. 109-432, as modified)

Energy Tax Extenders—The act also extends through 2013, and in some cases modifies, a number of energy credits and provisions that expired at the end of 2011:

• Credit for energy-efficient existing homes (Sec. 25C)
• Credit for alternative fuel vehicle refueling property (Sec. 30C)
• Credit for two- or three-wheeled plug-in electric vehicles (Sec. 30D)
• Cellulosic biofuel producer credit (Sec. 40(b), as modified)
• Incentives for biodiesel and renewable diesel (Sec. 40A)
• Production credit for Indian coal facilities placed in service before 2009 (Sec. 45(e)) (extended to an eight-year period)
• Credits with respect to facilities producing energy from certain renewable resources (Sec. 45(d), as modified)
• Credit for energy-efficient new homes (Sec. 45L)
• Credit for energy-efficient appliances (Sec. 45M)
• Special allowance for cellulosic biofuel plant property (Sec. 168(l), as modified)
• Special rule for sales or dispositions to implement Federal Energy
• Regulatory Commission or state electric restructuring policy for qualified electric utilities (Sec. 451)
• Alternative fuels excise tax credits (Sec. 6426)

Foreign Provisions—The IRS’s authority under Sec. 1445(e)(1) to apply a withholding tax to gains on the disposition of U.S. real property interests by partnerships, trusts, or estates that are passed through to partners or beneficiaries that are foreign persons is made permanent, and the amount is increased to 20%.

New Taxes—In addition to the various provisions discussed above, some new taxes also took effect Jan. 1 as a result of 2010’s health care reform legislation.

• Additional hospital insurance tax on high-income taxpayers
• Medicare tax on investment income
• Medical care itemized deduction threshold
• Health flexible spending arrangement

For a comprehensive article on the what the ‘fiscal cliff’ bill means to taxpayers (including non-tax items),” click here. Be sure to contact one of our professionals with questions. Remember, we are here to help.

And, HAPPY NEW YEAR from our entire staff!

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Tips on S Corporation Compensation

The IRS continues to challenge S Corporation shareholders regarding proper methods for paying themselves. That said, it’s critical that your S Corporation structure is set up appropriately and that compensation is paid and reported correctly. For example, in a recent court appeal case, an attorney was slapped with penalties and interest after failing to remit payroll taxes for his corporation—even though compensation was reported on a 1099-MISC and individual income and social security taxes were paid. This is a good example of why S Corps must ensure that payments are reported as compensation by December 31, 2012, and that appropriate tax deposits are made and payroll tax returns are filed.

In recent years, the IRS has also instituted a payroll audit program for profitable S Corporations. The program flags income tax returns reporting little or no W-2 payroll wages. The IRS is identifying more of these cases and assessing additional taxes and substantial penalties. The penalty, over and above any unpaid Social Security (FICA) taxes, frequently exceeds an additional 50% of the total tax liability—even if you paid taxes when you filed your individual return. The core issues being identified by the IRS are negligence in paying Social Security tax and making bi-weekly or monthly payroll tax deposit payments.

Avoid being flagged by the IRS by following these tips:

Things to Avoid:

• Paying unreasonably low or no salary to shareholders who perform services for the S Corporation while the corporation is generating a profit.
• Offering loans to shareholders.
• Paying shareholders’ personal expenses with corporate funds.
• Using Form 1099 to report shareholder compensation instead of a W-2.
• Borrowing money (via vendor payables, bank loans, or increased credit card debt) and then paying shareholders a distribution or loan.
• Making distributions more frequently than once per month.
• Assuming that part-time work for the S Corporation excuses compensation payment requirements.

Things to Do:

• Pay reasonable compensation to shareholders.
• Document all loans to shareholders with a written contract that offer a reasonable interest rate and strict payment terms.
• Document all compensation, distribution, and loan issues in corporate minutes.
• Pay distributions to all shareholders on the same date in proportion to the ownership percentage.

Contact us at our office and speak with one of our professionals about what steps you can take to avoid a painful and extremely costly S Corporation payroll tax audit.

From our entire staff: Best wishes for a happy and safe holiday season!

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Welcome A.P. Franz, CPA Clients!

The entire Steven M. Ellard, CPA team is excited to announce our recent firm merger with A.P. Franz, CPA. We want to take this opportunity to welcome each new client to the Steven M. Ellard, CPA family. We are dedicated to your success and will work in partnership with each of you throughout the year to ensure you meet your financial goals!

Al partnered with our firm to help ensure that his clients continue to receive the same great service that he and his staff have provided for many years. Over the past few months, our firms have worked closely together to maintain continuity in service and help each client feel comfortable and secure in the move.

With this said, we encourage our new clients to reach out and let us know what else we can do to help you. We always want to offer a rich client experience – both during the initial transition period and well into the future!

Again, we welcome our new clients from A.P. Franz, CPA! We look forward to being your trusted advisor for many years to come.

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Tis the “Season of Giving”… Holiday Tax Tips for You

It’s year end already, and with it comes the race to get ready for tax season. Traditionally, December marks a time for giving generously to charities, family, and friends. It’s also a time that can have a major impact on your upcoming tax return. But fear not, we’ve compiled a few helpful “Season of Giving” tips for you (courtesy of the IRS), covering everything from charity donations to refund planning.

1. Contribute to Qualified Charities—If you plan to take an itemized charitable deduction on your 2012 tax return, your donation must go to a qualified charity by December 31, 2012. Be sure to inquire with the charity regarding its tax-exempt status. Donations charged to a credit card by December 31 are deductible for 2012, even if you pay the bill in 2013. The same is true for donations by check if it is mailed in December.
   
   
2. Understand What You Can Deduct—You can typically deduct cash contributions and the fair market value of most property you donate to a qualified charity. Special rules apply to several types of donated property including clothing, household items, cars, and boats.
   
   
3. Keep Records of All Donations—Always maintain a record of donations you deduct, regardless of the amount. You must have a written record of all cash contributions to claim a deduction, which may include a cancelled check, bank or credit card statement, or payroll deduction record.
   
   
4. Gather Records in a Safe Place—Be sure to file records so they do not get lost or damaged. And, as long as you’re gathering contribution documents, it’s a good time to also start gathering other source documents needed to file your tax return in 2013. These include receipts, canceled checks, and other records that support income or deductions you will claim on your tax return.
   
   
5. Plan Ahead for Major Purchases—If you are making major purchases during the holiday season, don’t base them solely on the expectation of receiving your tax refund before the bills arrive. Many factors can impact the timing of a tax refund. The IRS issues most refunds in less than 21 days after receiving a tax return; however, if your tax return requires additional review, it may take longer to receive your refund.

Be sure to contact one of our professionals with questions. Remember, we are here to help.

From our entire staff: Best wishes for a happy and safe holiday season!

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After-election Tax Implications... What to Expect in 2013

With the election behind us, we now have a much clearer picture of how taxes will be affected in 2013 and beyond. With this insight, we can better help our clients create strategic, fiscally responsible tax programs for the coming year.

Under the Obama administration, the objective is to maintain the old tax rates for taxpayers with adjusted gross income below $250,000. (The old tax rates were originally enacted under the Bush administration and set to expire at the end of 2012.)

This means that taxes will likely rise for businesses and wealthier individuals next year. Based on Obama’s policy initiatives, income tax rates for the top tax brackets will likely rise to Clinton-era rates. Estate tax lifetime credits will likely fall as well to an amount between $1 million and $3.5 million. The anticipated Congressional stalemate with a Democratic-controlled Senate and Executive branch may very well make the default “Sunset” of $1 million a reality. And finally, capital gains rates are likely to rise as well. As a result, effective tax planning in the face of these increases will become even more important for taxpayers.

We understand that these changes are complex and can be overwhelming, but we are here to help. Contact us with any questions and to begin planning an effective tax strategy.

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Changes to Your Client Portal…What You Need to Know

You may have already noticed some changes to your personal portal. To ensure that you are able to continue to easily navigate within your portal, we’ve compiled the following list that explains recent core enhancements.

What you will see when you log in:

• A more streamlined look and feel offers more direct access to your documents and other frequently used home screen features.
  
  
• The “File Exchange” link and any documents previously located in “Document Presentation” or “My Tax” are now located in a single location called "Documents." Within “Documents,” you will see each business or individual clients associated with your login.
  
  
• A new "Messages" link at the top of your screen will show you a list of recent activity—similar to what you'll find on many social networking sites. When new activity occurs (e.g., if a new document is posted to your account), the number of new activity items will display next to the “Messages” link.
  
  
• A new "Tasks Center” will be displayed when there is activity that requires action on your part (such as a signature needed). Simply click on any task and you will be directed to the proper screen.
  
  
• Your account information (including password management) and the “Log Out” link are now available by clicking your name in the top right corner of the screen.

Please contact our firm if you have any questions. Remember, we are here to help!

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Key Tips for Using Social Media Effectively in Your Small Business

First and foremost, it’s important to understand that social media is not one size fits all. Every small business is different and will have different social media needs. For example, some may be looking to acquire new clients while others may want to use social media channels to strengthen customer relationships or educate their audience.

No matter the reason, social media is a cost-effective marketing tool for getting the word out about your business and reaching a large pool of prospects. The following are a few tips for using social media effectively.

Don’t Limit Yourself to One Channel—If you have a great story to tell, you want as many people to hear about it as possible, so don’t limit yourself to one social media channel. Get your information out there using multiple tools like Facebook, Twitter, and your own branded business blog. Social media isn’t just for socializing…these tools provide a great platform for publicizing your business and interacting with your community of readers on a daily basis.

Build a Custom Community—You are in control of creating your own custom social media community based on your brand and the information you release. Over time, you can build a highly targeted audience with whom you can engage in detailed conversations and develop long-lasting, loyal relationships. You can also use the survey capabilities within some social media tools to gather valuable customer information to improve your product or service to meet the needs of your audience.

‘Talk’ to Your Audience Regularly—With social media, you have the ability to carry on conversations in real time, so be sure to maintain your online conversations. If you are inconsistent with your social media communication, your audience will lose interest. Keep your readers engaged by keeping up with conversations.

Don’t Replace Marketing with Social Media—Social media is a complement to your marketing program, not a replacement. While it’s important to be active within the social media space, it’s even more critical to keep up with your long-term marketing program. Continue to plan email marketing and print campaigns…even advertising where appropriate. You need to find the right blend of marketing and social media.

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Jumpstarting Innovation in Your Business

To ensure success, it’s important to consistently evaluate your business and identify possible areas for enhancement. Of course, because you are an integral part of daily operations, it’s sometimes hard to visualize what enhancements may be needed or to come up with that next BIG idea.

With this in mind, we want to provide you with a few tips to help jumpstart innovation in your business. Author Soren Kaplan in his new book “Leapfrogging: Harness the Power of Surprise for Business Breakthroughs,” serves up a few questions that can help you view your business from a new vantage point and inspire innovation. Take a moment to ask yourself:

• What is the simplest thing you could do right now to transform your company?
• What skill do you never use at work that could help your company perform better?
• When have you ever pushed yourself beyond your comfort zone? How did you benefit?
• What work-related experience brought out your entrepreneurial side?
• Have you ever looked at the data you manage and wonder why it matters?
• What surprises challenged your assumptions and gave you more insight into your business?

Innovative breakthroughs often require that you step back just enough to really “see” your business. These questions offer a good start.

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Real Time Collaboration… Paperless… What’s Not to Love?

With year end fast approaching, it’s a good time to slip in another push for portals. We understand the immense value online access offers, and we just want to be sure that you do too. First and foremost, portals support immediate, real-time exchange of data and documents, which translates into ultimate convenience for our clients. Your information is always at your fingertips, 24/7…when YOU need it. Working online also supports real-time collaboration with our staff—enabling us to quickly answer your questions or supply you with needed information. And of course there is also the benefit of reducing the amount of paper in your office…and we know everyone loves that.

Portals just make sense in today’s fast-paced work environment. Consider all the value:

• Access your data and documents 24/7—You are not restricted by office hours.
  
  
• Enjoy advanced data security and current views of your data—Portals are THE most secure method for sharing information…far more secure than sending files via email or through the mail. And rest assured that you are always looking at the most current versions of your data and documents.
  
  
• Communicate and collaborate with us in real-time—Interact with our staff immediately and get your questions answered quickly.
  
  
• Enjoy a paperless process—Eliminate the need to print, fax, or mail documents. Portals allow us to work with you paper free.

Immediate access to your information, paperless, a direct reach to our staff…what’s not to love? Please feel free to contact our office for more information about our secure client portals.

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The End of Summer Means Year End is that Much Closer...

Summer is coming to a close, and the end of summer is a good time to start thinking about getting your tax information together. Before you know it, year end will be here, which can leave you scrambling to get organized. Starting a little early will help ensure that you are prepared—avoiding the all-too-familiar last minute cram session that can cause disruption and stress in your personal and business lives. Starting now means you can pace yourself. Begin with the small stuff:

• Organize your receipts by category.
  
  
• Make a list of possible deductions to ask your accountant about (e.g., charitable deductions, home office expenses, etc.)
  
  
• Start to scan in receipts and invoices so you are prepared for a paperless tax preparation process.
  
  
• Get up to speed using your portal on our website so when the time comes uploading source docs and reviewing your return online are quick and easy tasks.

Getting prepared early will benefit you come tax time.

We certainly hope you have had an enjoyable summer so far. And remember, we are always here to help. If you have any questions, please give us a call.

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How Might ObamaCare Affect Your 2013 Year Taxes?

The effects of the new healthcare law are different for individuals and business. We’ve compiled the following information for you and provided a succinct explanation of specific changes. This list is certainly not all-inclusive, so please contact our firm for more detail and to inquire how ObamaCare might affect your 2013 year taxes.

For Individuals:

• An additional 0.9% Medicare tax applies to wages exceeding $250,000 for joint returns, $125,000 for married taxpayers filing separate returns, and $200,000 for all other filing categories (begins in 2013).
• The additional 0.9% Medicare tax also applies to self-employment income in excess of the thresholds noted above. The deduction for 50% of self-employment taxes does not include this additional tax (begins in 2013).
• The 3.8% surtax is probably the most significant change in 2013. The surtax applies to net investment income of individuals, estates, and trusts with modified adjustment gross income over $200,000 ($250,000 for married couples filing joint returns). Call our office for a detailed explanation of how this surtax might apply to you.
• The 3.8% Medicare surtax also applies to trusts and estates that have net investment income in excess of certain threshold amounts unless the income is distributed to beneficiaries.
• Investment income for 2013 for certain higher income taxpayers will increase as follows (unless Congress extends the Bush tax cuts):
  
  
  • Capital gains tax rate: 20% plus the new 3.8% = 23.8%
  • Dividends tax rate: 39% plus the new 3.8% = 43.4%.

For Business/Employers:

• Starting in 2012, employers who filed at least 250 W-2’s in 2011 must report the cost of employer sponsored health coverage on 2012 W-2’s.
• Starting in 2013, employers must withhold an additional 0.9% Medicare tax on an employee’s wages in excess of $200,000. No matching tax payment is required employers.

Again, if you have questions, please contact our office.

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Why Portals Make Sense for Clients

Portals are everywhere. When you access your financial portfolio or bank account, you are using portals. Online access to information is critical these days, allowing instant access to data and documents when you need them—the ultimate in convenience.

At our firm, we also want to provide our clients with the convenience of web-based access, which is why we offer our advanced and highly secure client portals. Portals allow us to easily deliver and exchange information with you and collaborate in real time—essential benefits when you are busy running your business and household.

Portals just make sense in today’s fast-paced work environment. Consider the value:

• Access your data and documents 24/7—You are not restricted by office hours.
  
  
• Enjoy advanced data security and current views of your data—Portals are THE most secure method for sharing information…far more secure than sending files via email or through the mail. And rest assured that you are always looking at the most current versions of your data and documents.
  
  
• Communicate with us in real-time—Interact with our staff immediately for true collaboration.
  
  
• Enjoy a paperless process—Eliminate the need to print, fax, or mail documents. Portals allow us to work with you paper free!

Contact our office for more information on our advanced client portals.

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Summer Tax Tip: Special Benefits for Armed Forces Personnel

1. Moving Expenses—If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you may be able to deduct some of your unreimbursed moving expenses.
   
   
2. Combat Pay—If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all military pay received for military service during that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.
   
   
3. Extension of Deadlines—The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.
   
   
4. Uniform Cost and Upkeep—If military regulations prohibit wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms. However, you must reduce your expenses by any allowance or reimbursement you receive.
   
   
5. Joint Returns—Joint income tax returns typically must be signed by both spouses. However, when one spouse is unavailable due to military duty, a power of attorney may be used to file a joint return.
   
   
6. Travel to Reserve Duty—If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform reserve duties.
   
   
7. ROTC Students—Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay (such as pay received during summer advanced camp) is taxable.
   
   
8. Transitioning Back to Civilian Life—You may be able to deduct some incurred costs while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location and you meet certain tests.
   
   
9. Tax Help—Most military installations offer free tax filing and preparation assistance during and/or after the tax filing season.
   
   
10. Armed Forces’ Tax Guide (Publication 3)—Offers an excellent resource, summarizing many important military-related tax topics. Publication 3 can be downloaded from IRS.gov.

As always, if you have any questions, please call our office. We hope you are having a wonderful summer!

Information provided by irs.gov.

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IRA’s for Kids...REALLY?

What parent isn’t concerned with their children’s future? And part of this concern relates to ensuring our children’s financial well-being. So, IRA’s for kids? Yes, really! The opportunity for retirement savings begins as soon as kids start to earn money, so why not begin educating them now on saving for their future?

IRA’s, whether traditional or Roth, are available to anyone, regardless of age, as soon as they have income from a job. For kids, this is anything from babysitting and lawn mowing to a position at McDonalds or within your small business. As long as the income is reported to the IRS on a W-2 and/or in the child’s tax return, the child is eligible for an IRA contribution. Even better, an unmarried dependent child’s standard deduction in 2012 shelters the first $5,950 of earned income from taxes. That means contributing to a Roth IRA is a slam dunk—offering completely tax-free growth and withdrawals for years to come. The only limitation is that kids can contribute the lesser of $5,000, the amount of their earned income for the year, or any amount up to the limitation.

Another perk of the Roth IRA is that it can be used as a vehicle for college savings, as contributions to a Roth IRA can be withdrawn penalty- and tax-free as long as the money is used for qualified college expenses; for example, tuition, books, equipment and fees. (Note: funds cannot be used for room and board.) Additionally, retirement plan assets are not included in most financial aid calculations, so if financial aid is required, IRA funds should not factor in.

For more information on how IRA’s for kids can offer tax benefits, please contact our firm. We are always here to help!

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Need Help Finding Funding?

Whether you're trying to grow your current business or have plans to start one, finding the cash needed can be overwhelming. There are many options to consider from traditional bank loans to “crowd funding.”

To help you narrow down the choices, there are a few good online tools to consider:

1. Intuit’s Loan Finder: Intuit, developer of the popular QuickBooks software, offers a free tool to identify funding options and loan experts to help you through the process. If you're not sure about what funding options are out there or how to prepare an application, consider this tool. Intuit will shop around your online loan application to hundreds of lenders—from banks to credit unions and micro-lenders to more alternative lending options.

2. Multifunding’s Banking Grades: Multifunding offers a free online tool that grades banks based on their small business lending. The tool calculates the percentage of a bank’s deposits that are going to small businesses. So, if you're set on applying for a traditional bank loan, this tool can help you identify a bank that has a track record of lending to SMB’s.

3. SoMoLend: This web-based service matches entrepreneurs with investors in the same geographic area. SoMoLend targets small upstart companies with up to 15 employees that are seeking loans between $100 to $1M. Investors on SoMoLend run the gamut from banks to individuals. What differentiates these investors is that they are focused on lending to businesses in their own communities.

So, if you need a little help with finding the right funding option for your existing or start-up business, one of the above tools might be useful to you.

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“Anyone Can Do It” Tax Myth Debunked

Advertisements for easy-to-use tools and low-cost tax preparation services leave the impression that tax prep and planning can be mastered by novice preparers and those with no tax planning experience. Tax preparation is complex on its own, but planning requires a slew of other skills and adequate experience and education.

There is a major difference between tax preparation and tax planning. The former can be done by a computer program or tax preparer, but the latter requires the help of a professional CPA working in tandem with you to develop a sound and profitable tax program. For most small business owners, the assistance of a professional CPA is needed.

The bottom line: even if you think yours is a situation that is easy enough to handle on your own, rest assured that a CPA is better equipped to plan your tax strategy. The best advice is to seek the service of a CPA every few years to ensure you’re not missing anything significant and that your tax plan is economically beneficial to your business.

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5 Tips for Retaining Your Best Employees

Every business owner has at least one employee that they wish they could clone. You know, the one that always clocks in on time, goes the extra mile, and is loved by your customers. Retaining your best employees is simply a smart business move. Turnover is costly on many levels, so it's worth the extra effort to ensure employee satisfaction. The following 5 tips will help you.

1. Your Employees Should Feel the Love—A key reason for voluntary termination by employees is that they feel management does not recognize or care about their contributions to the business. Make the effort to praise your employees on a regular basis. Good employees will stay if they feel they have a positive relationship with their supervisor.
2. Understand Your Employees' Potential—It's your responsibility to identify the unique talents of your employees and make sure that their assigned duties match their skills. Employees feel better about their job when they are successful at it. Don't set employees up for failure by assigning tasks outside of their skill set.
3. Offer Awards and Incentives—Spotlight your best employees and offer incentives to keep them engaged and happy. For example, display their name on the bulletin board where it's visible by everyone and/or award them with a gift card for dinner or movie tickets for a job well done. A little recognition goes a long way.
4. Keep Employees Challenged—Employees are motivated when they feel challenged in their position. When they are not challenged, they can quickly get bored and are more likely to leave.
5. Treat Employees with Respect—Morale is affected negatively when you do not show employees the proper respect. Never reprimand or criticize an employee in a public forum or in front of their peers. Also be sure to thank employees for going the extra mile or acknowledge when you have made a mistake.

Maintaining a positive culture is key in retaining your best employees. Follow these five tips and you will better position your business to keep the best of the best on staff!

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Seven Tips for Early Tax Preparation in 2013

The tax deadline may have just passed, but preparing for next year can start right away. Being organized and planning ahead can save you time, money, and the stress associated with scurrying to get organized at the last minute. The following are seven tips offered by the IRS to get you going with your 2013 planning efforts:

• Adjust Your Withholding—Why wait another year for a big refund? Now is a good time to review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller. Contact our office for help calculating your withholding.
• Store Your Tax Return in a Secure Location—Put your current tax return and supporting documents somewhere secure so you'll know exactly where to find them should you receive an IRS notice. This will also allow you to easily access your return and use it as a helpful guide for next year.
• Organize Recordkeeping—Establish a central location where everyone in your household can put tax-related records all year long. Be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.
• Review Your Paychecks—Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions, and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error on your paycheck now helps you avoid hassles later.
• Prepare to Itemize Deductions—If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. For example, an early or extra mortgage payment, pre-deadline property tax payments, or planned donations could equal some extra tax savings.
• Strategize Tuition Payments—The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires.
• Stay Apprised of Changes—Find out about tax law changes, helpful tips, and IRS announcements during the year by subscribing to IRS Tax Tips through www.irs.gov or IRS2Go (the IRS’s mobile app). The IRS issues tips regularly during summer and tax season. Special Edition tips are sent periodically for other timely updates.