How to Account for Loss when Disaster Strikes: Part 2

How to Account for Loss when Disaster Strikes: Part 2

In today’s post we will be discussing how your company’s payroll should be handled if you should find yourself in the midst of disaster. To refresh your memory on our discussion last week on accounting for loss and property damage, click here to visit last week’s blog post: http://bit.ly/2g7DZxQ. Calculating Payroll If your business closes or brings in additional employees during a disaster, carefully review federal law, your local laws and your employment agreements to determine whether you’re legally obligated to pay your employees. Who Must Be Paid Under the Fair Labor Standards Act (FLSA), you may be required to pay exempt, salaried employees during a temporary closing. In that circumstance, you may require your employees to use their paid leave time but may not refuse to pay them if they have no available leave time. Under federal law, nonexempt employees are generally only paid according to the time they worked and are therefore not legally entitled to pay during a closing. However, your local laws or your employment agreement may require you to pay employees who were originally scheduled to work during your closing. If you require employees to remain on-site during a disaster, you must pay them for all time during which they are not permitted to leave. This includes overtime pay if it otherwise applies. Late Payments If a disaster delays processing paychecks, you should make issuing them one of your first priorities. Willfully failing to pay your employees in a timely manner is a violation of the FLSA and may also violate state laws. While you might be excused from penalties during a power outage or...
How to Account for Loss when Disaster Strikes: Part 1

How to Account for Loss when Disaster Strikes: Part 1

With the most recent natural disasters happening around the world, worrying about how you can prepare and protect your business may be weighing heavily on your mind. You can find out what accounting steps to take in the event a disaster with information shared from CPAPracticeAdvisor.com. When a flood, fire, hurricane or other disaster strikes your business, you may suffer heavy property damage along with lost sales during the time you’re forced to close. Having a good understanding of the accounting rules related to natural disasters can help you fully account for your losses, reduce the economic harm to your business, and obtain financial relief through insurance, tax deductions and other sources. Accounting for Inventory Losses Conduct a manual count of your inventory as soon it is practical to do so. Even if items are obviously a total loss, it’s a good practice to document the specific losses due to the disaster versus what you might have lost due to shrinkage or some other means before the disaster. This may also help with the insurance claims process. You will need to update your balance sheet to reflect the current value of your remaining inventory. You can generally include inventory losses as an expense when you prepare your financial statements and file your tax return. However, you will need to adjust for any insurance reimbursements — you cannot both claim a loss expense and exclude the insurance claim from your income. Accounting for Property Damage Damage to other assets, such as buildings or machinery, is handled in a similar manner to inventory. If the damage is so substantial that it...
New Poster – New E-Verify Poster Published

New Poster – New E-Verify Poster Published

Do you use the E-Verity program in your workplace? If you do, then you need to update the mandatory poster in your workplace. Recently, the federal E-Verify Participation poster has been changed by the U.S. Citizenship and Immigration Services agency (USCIS). The following information has been shared by ePlace Solutions, Inc. Who must post the E-Verify Participation poster? The following employers are required to post the E-Verify Participation poster: All federal contractors All employers in states that require the use of the federal E-Verify program All employers that voluntarily participate in the federal E-Verify program. Where should it be posted? In a conspicuous location in the workplace. What changed? There were several changes made to the E-Verify Participation poster: The poster layout was redesigned The language was revised to make information more clear and understandable. The English and Spanish versions are combined on one post How do I get the poster? The USCIS has only a sample poster available on its website. Employers can only download the official E-Verify Participation poster by logging into the E-Verify program. Recommendations? All affected employers should update the E-Verify Participation poster immediately. As sample poster is available here. This article was written by Laurian Rutterbush on the ePlace Solutions, Inc....
IRS Offers Help to Hurricane Victims

IRS Offers Help to Hurricane Victims

The Internal Revenue Service has recently released information on tax relief that is available to victims of Hurricanes Harvey, Irma, and Maria. In general, the IRS is now providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, as well as parts of Texas. Because this relief postpones various tax deadlines, individuals and businesses will have until Jan. 31, 2018 to file any returns and pay any taxes due. Those eligible for the extra time include: Individual filers whose tax-filing extension runs out on Oct. 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief. Business filers, such as calendar-year partnerships, whose extensions ran out on Sept. 15, 2017. Quarterly estimated tax payments due on Sept. 15, 2017 and Jan. 16, 2018. Quarterly payroll and excise tax returns due on Oct. 31, 2017. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017. A variety of other returns, payments and tax-related actions also qualify for additional time. See the disaster relief page on IRS.gov for details on these and offer relief the IRS has offered since these hurricanes began hitting in August. The IRS also continues to closely monitor the aftermath of these storms, and additional updates for taxpayers and tax professionals will be posted to be IRS.gov. Besides extra time to file and pay, the IRS offers other special assistance to disaster-area taxpayers. This includes the following: Special relief helps employer-sponsored leave-based donation programs aid hurricane victims. Under these programs, employees may forgo their vacation,...
Hurricane Charity Scams on the Rise

Hurricane Charity Scams on the Rise

With many victims of the most recent natural disasters still dealing with the devastating effects on their homes and businesses, good hearted people are looking to donate and help in any way possible. The IRS has recently issued information to help protect taxpayers from criminals who want to take advantage of charitable people. If you’re currently searching for a way to donate, unfortunately, there are things you should be aware in order to avoid fake charity scams. While there has been an enormous wave of support across the country for the victims of the hurricanes people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations. Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources. IRS.gov has the tools people need to quickly and easily check the status of charitable organizations. The IRS cautions people wishing to make disaster-related charitable donations to avoid scam artists by following these tips: Be sure to donate to recognized charities. Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of...
A Radical Proposal for Fighting Tax-Related ID Theft

A Radical Proposal for Fighting Tax-Related ID Theft

Are you concerned about your tax information being stolen? A recent article from TaxProToday.com, written by Roger Russell, brought to our attention how a new idea could help cut down on tax-related ID theft and protect taxpayers in the long run. Tax experts Roger Harris and Jeff Trinca have an idea to drastically cut down tax refund fraud — by making stolen taxpayer information worthless to thieves. The two talked to staffers on the Senate Finance Committee and the House Ways and Means Committee about the idea last week, and intend to speak with committee members when they return from the August recess next month. The IRS is making progress in fighting identity theft tax refund fraud, according to Harris, president of Padgett Business Services, and Trinca, vice president of Van Scoyoc Associates. They cite the decline in taxpayers reporting ID theft from 698,700 in 2015 to 376,500 in 2016, a 46 percent drop. And indications are that the number will decline further in 2017. Yet the lower number still reflects approximately a billion dollars a year in lost revenue. Fraudsters are relentless, and will likely adjust in future filing seasons. “Rapid refunds and refundable credits are part of the problem,” said Harris. They increase the incentive for ID theft by putting all taxpayers at risk with a system that only benefits a portion of the taxpayer population. Thieves don’t care if a taxpayer is due a refund or owes money; they just want the taxpayer’s information.” The solution, according to Harris, is a “Refund Lock.” “There is a large pool of returns that, due to the taxpayer’s expected...
Wage Theft and Worker Mis-classification: Part 3

Wage Theft and Worker Mis-classification: Part 3

In the second part of our blog series on the lawsuits filed by the Labor Commissioner’s Office, we covered a Chula Vista restaurant, La Querencia, who deprived their workers of their hard-earned pay and was ordered to pay over $274,000. You can review our last blog post here: (http://bit.ly/2y3MUuX). With information provided to us from the State of California Department of Industrial Relations’ new release, the Labor Commissioner’s Office has cited a Jack in the Box franchise operator $903,084. The franchise’s owner, Nor-Cal Venture Group, Inc., misclassifed 40 managers as exempt and denied them overtime pay. This case is an great example on how important it is for employers to be aware of overtime protection laws along with how to correctly classify their employees. Nor-Cal Venture Group, Inc. owns 26 Jack in the Box franchises in California, most of the which are in the greater Sacramento area. The Labor Commissioner’s Office opened an investigation after receiving a complaint and found that 40 employees were misclassified as exempt. As managers, they were required to work a minimum of 45 hours per week with no overtime, regardless of how many hours they worked. “For these employees, being misclassified as managers resulted in being paid less then minimum wage,” said Labor Commissioner Julie A Su. “That’s not an acceptable way of doing business in California, and my office will continue to enforce labor laws that uphold that wage floor.” Managers who spend less than half of their work time on managerial duties must be paid overtime. Investigators determined that the 40 workers were performing the same duties as other employees. The citations...
Wage Theft and Worker Mis-classification: Part 2

Wage Theft and Worker Mis-classification: Part 2

In our latest blog post, we talked about the lawsuit against Calcrete Construction, Inc., a construction company which committed multiple wage theft and worker mis-classification violations for which the Labor Commissioner’s Office is seeking $6,300,338 from. To review the information we covered, you can click here for last week’s blog post: (http://bit.ly/2whkuJs). Today’s post will cover the case against a Chula Vista restaurant, La Querencia, filed by the Labor Commissioner’s Office. In a new release from the State of California Department of Industrial Relations, La Querencia is cited for more than $274,000 in penalties and back wages for several wage left and labor law violations. Dorantes Inc., doing business as La Querencia, is ordered to pay $164,688 to six workers who worked an average of nine hours per day, five days a week without breaks, and were paid on average less than $6 per hour. La Querencia was also fined $110,150 in civil penalties, workers’ compensation penalties and wage statement penalties. “Honest business owners in California should not have to complete with businesses that skirt the law and deprive their workers of their hard-earned pay,” said Labor Commissioner Julie A. Su. The Labor Commissioner’s Office launched a complaint-based investigation at the Mexican restaurant in January and found that the owner under-reporting the number of workers employed there. The owner claimed only five employees, but investigators found 14 workers employed. Investigators in February cited LA Querencia $21,000 for failing to carry adequate workers’ compensation insurance coverage. An audit of the restaurant revealed that La Querencia mangaement denied six workers meal or rest breaks, and paid them a straight rate of...
Wage Theft and Worker Mis-classification: Part 1

Wage Theft and Worker Mis-classification: Part 1

In the last few weeks there have been 3 large scale documented cases published on how the Labor Commissioner is cracking down on companies mis-classifying employees and committing wage theft violations. Over the course of the next few blog posts, we will be discussing the cases against a Glendale construction company, a Chula Vista restaurant, and even a Jack in the Box franchise owner. These cases are excellent examples on how important it is to correctly classify your employees and be aware of minimum wage and overtime protection laws. What is Wage Theft? When an employer does not pay their employees according to the law, that is wage theft. Wage theft occurs when an employer does not pay workers overtime, pays less than minimum wage, or neglects to offer employees the opportunity to take breaks. What is Worker Misclassification? Employee misclassification happens when an employer incorrectly labels workers as independent contractors, rather than as employees, or an employee exempt from overtime because they are paid a salary. When employees are misclassified as independent contractors, they lose rights to workers’ compensation coverage, family leave, unemployment insurance, and the right to organize or join a union. They lose protection against employer retaliation and may not have access to employer-provided health insurance coverage and pension plans. Misclassified workers are not subject to California minimum wage and overtime protection laws. An employee classified as exempt is not entitled to overtime pay, but this is taken into consideration in the amount of salary they must be paid to truly be exempt. Just because an employee is classified as exempt from overtime doesn’t mean it...
New Sales Tax Amnesty Program for Online Sellers

New Sales Tax Amnesty Program for Online Sellers

Just ahead of the busy holiday shopping season, states are incentivizing online marketplace sellers to register for tax collection and remittance within their jurisdictions. As ecommerce has risen in recent years, state and local governments are cracking down on online sellers operating within their boundaries. A new sales tax amnesty program, running from August 17 to October 17, will offer online businesses leveraging warehouses, such as Amazon’s Fulfillment centers, the opportunity to register for the amnesty without penalty of back taxes. The Multistate Tax Commission (MTC) will administer the amnesty program, with fifteen MTC member states – Alabama, Arizona, Colorado, Connecticut, Idaho, Iowa, Kansas, Kentucky, Louisiana, Nebraska, New Jersey, Oklahoma, Texas, Utah and Vermont – agreeing to participate, with more states likely joining in the coming weeks. What are the Incentives to Participate? Simplified compliance. Online marketplace sellers may not have a storefront in a specific state. However, by using a storage warehouse located within a state, leveraging a fulfillment agent or having inventory in a fulfillment center, sellers most likely have a tax obligation, or nexus, to that state. With this proliferation of fulfillment centers has come uncertainty and confusion on the part of online sellers related to where products are shipping from, and whether or to whom sales tax should be collected and remitted. An unregistered online seller with nexus in a particular state will be asked on the tax registration forms when their business began in that jurisdiction. Registering under the MTC Sales Tax Amnesty program simplifies compliance because accurate information can be shared without financial risk. Forgiveness of back taxes. Under the new amnesty program, participating online sellers will likely...

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