5 Tax Saving Tips for Small Businesses

5 Tax Saving Tips for Small Businesses

After the Tax Cuts and Jobs Act (TCJA), guidelines and tax expectations have become a little confusing lately. To help small businesses save some money and avoid accidental penalties in the wake of our current loophole-filled tax law, here are some tax saving tips to start employing within your small business today – courtesy of the National Association of Enrolled Agents. 1) Expense All Large Asset Purchases For businesses who recently bought expensive assets for their company, under the new TCJA, those asset purchases will continue to have a 100% depreciation bonus until the year 2022. Many company vehicle purchases may also qualify for the complete write-off, making now the perfect time for small businesses to start outfitting their workspaces with necessary assets. 2) Restructure Your Business For owners of qualifying pass-through businesses such as sole proprietors, S corporations, partnerships, or LLC and LLP members, the TCJA offers a valuable 20% tax deduction. Under the current law, however, to get this deduction with the maximum tax savings, business owners may be required to change their current tax structure. For example, sole proprietors could save more in tax dollars by making the switch on paper to an S corporation instead. It’s a confusing law and full of vague terminology that as of yet lacks IRS clarification, but if you’re a small business who could qualify for the 20% deduction, be sure to meet with your tax professional to discuss your options. 3) Watch for Deduction Changes Small businesses should be wary of continuing old habits in how they do business each year, as the many changes in what’s deductible could...
Hiring Requirements for a Minor in California Part 2

Hiring Requirements for a Minor in California Part 2

Earlier we brought you part one of our two-part series on the state and federal requirements surrounding hiring a minor – covering the permits required and the work restrictions for each child age group. In today’s article, we’ll finish things off in part two with just how much the law requires you to pay your minor worker. The good news? Chances are hiring a minor could save you a little money. The Federal “Opportunity” Wage Under the Fair Labor Standards Act (FLSA), there exists an option for employers to pay new employees under 20 years old an “opportunity” wage to accommodate the employer while training the worker on a new skill. This opportunity wage can be any amount under the current minimum wage, but must not be less than $4.25, and lasts only for as long as the first 90 days of employment. Once the employee turns 20 or after the first 90 days (whichever comes first), the worker is then entitled to the standard minimum wage. California’s “Learner” Wage For California employers, however, much like the federal “opportunity wage”, the state allows employers to pay workers of all ages with no prior experience in the specific job field a “learner” rate of 85% of the minimum wage (currently $10.50) for the first 160 hours of work. So, if you’re a Californian employer hiring a minor and are curious about which wage applies? Here’s a general rule of thumb… Under the parameters: If only the learner wage applies and not the opportunity wage, the worker will receive the learners wage. If only the opportunity wage applies, then the worker...
Hiring Requirements for a Minor in California Part 1

Hiring Requirements for a Minor in California Part 1

For most eligible businesses, hiring a minor can be a decision that benefits all involved. Often filled with boundless energy, minor workers can less expensive labor for the employer, while offering excellent learning opportunities, work experience, and much-needed income to the teen. Before hiring, however, here are some important regulations regarding hiring a minor worker that all businesses should know to ensure they’re following the law and protecting the rights and safety of the minor. Work Permits Before working, all employers of teenagers under the age of 18 must first have a work permit issued by the minor’s school. To acquire this permit, both the employer and minor must fill out a form with their information, obtain a signature from the teen’s parents, and then the student must submit it to the school for approval. The school has complete authority to either issue a permit for maximum work hours, limit the working hours to a certain number, or deny approval altogether. Teens who are self-employed, working privately with odd-jobs like babysitting or yardwork, or delivering newspapers need not apply for a permit. Age and Work Restrictions Based on the minor’s age, there are a few restrictions enforced by the Department of Industrial Relations regarding work hours and the type of work permitted: Ages 12-13 are not allowed to work on a school day. Over summer break or on holidays, they can work up to 8 hours a day, 40 hours a week – though only from 7:00am to 7:00pm (9:00pm during summer). Minors under 14 are also usually restricted to only working odd-jobs around the neighborhood or delivering newspapers....
Be Relevant or Face Extinction

Be Relevant or Face Extinction

Approximately 543,000 new businesses begin every month according to the Kauffman Foundation, creating an ever increasing level of noise in the marketplace. Even iconic brands like Blockbuster, Radio Shack and Toys R’ Us are not immune to becoming irrelevant and getting surpassed. The business climate has transitioned so much, in fact, that while established companies used to behave conservatively to protect market share, today’s environment demands forward thinking in marketing position and PR. If a business’s message fails to evolve, it will lose customers. So what are the answers? Cheryl Conner has turned to leaders in cryptocurrency, one of the year’s most buzzed-about industries, as well as a leader from Dawn, one of America’s longest standing companies, for perspective on how their position and PR message must evolve to survive. Adam Mittelberg, Chief Marketing Officer at DataBlockChain.io, and Alex Mihaljcic, VP of Product Development for Eterbank.com, two of the fast-rising brands, shared their insights with Cheryl: Be creative in looking for ways to modernize your business. DataBlockChain.io (DBC) is disrupting the data marketplace that traditionally only allowed large organizations to have access. DataBlockChain.io accomplishes this by integrating Artificial Intelligence, Blockchain and other technologies into data merging to make this a reality.  As Mittelberg explains, “Our team has been working in an industry that isn’t ‘sexy’, but we’ve managed to implement two of the most talked about technologies changing business today–AI and Blockchain.” Don’t just think about your business–make your industry more relevant as well. Alex Mihaljcic is VP of Product Development for Eterbank.com, a company that hopes to save the Cryptocurrency industry itself from becoming irrelevant.  As Mihaljcic puts...
Affordable Care Act Scheduled to End in 2019

Affordable Care Act Scheduled to End in 2019

The Tax Cuts and Jobs Act, effective on December 22nd, 2017, has created quite the stir for individuals and tax professionals as of late (information on much of which you can find on our blog). The legislative decision to eliminate the Affordable Care Act Mandate in 2019 is no exception, so here’s a rundown of what to expect for next year. What Will Change Under current law, those without the minimum requirement in health insurance that don’t qualify for an exemption, are required to pay a penalty fee for each tax return year they continue without healthcare. This penalty could range between $695-$2,085 per person, or equate to 2.5% of the taxpayer’s household income, minus the filing threshold. Beginning in 2019, however, this penalty for those without health insurance will disappear under federal law – though some states may still enforce their own fee – while medical expenses will be raised to a 10% alternative minimum tax (AMT) and regular tax threshold. For 2017 and 2018, the adjusted gross income floor will lie at 7.5% for AMT and regular tax. What Will Remain the Same This mandate change to the Affordable Care Act will not affect the following: Taxpayers that are 100%-400% of the federal poverty level will remain eligible for premium tax credit; Employers with 50 or more employees must continue to provide employee healthcare or pay the Employer Shared Responsibility fee; and High-income taxpayers will continue to face surtaxes of 3.8% Net Investment Income Tax and 0.9% Additional Medicare Tax. How the Change Might Affect Taxpayers The nation could see a difference within two classes of people...
What Retailers Should Expect for This Supreme Court Ruling

What Retailers Should Expect for This Supreme Court Ruling

Earlier in April we presented the case of South Dakota v. Wayfair in this article – a key trial that could change the law regarding sales taxes based off of the Supreme Court’s decision – and with over $13.4 billion in state revenue could have been collected from sales taxes within 2017 alone, hanging in the balance, everyone has been eagerly waiting to see what the ruling might be. Well, as of June 21st, the Supreme Court has announced its decision in favor of South Dakota, thereby granting the state permission to levy sales taxes on out-of-state sellers. For a lot of people, this ruling is sure to change the landscape for sales taxes nationwide, while retailers need to prepare themselves for the new wave of requirements about to hit them. What South Dakota’s Win Means Many states beyond simply South Dakota were eager for a ruling in favor of the challenging state – in fact, several had even gone as far as to create similar sales tax laws in anticipation of the decision, and it’s easy to see why. Now that South Dakota has won, the Supreme Court has essentially claimed that the law as it stands is enough cause for states to charge out-of-state sellers sales tax, as well as online retailers who don’t have “a physical presence” within that state. For state governments, this change will bring a windfall of new revenue, while online retailers will be tasked with the challenge of updating all their systems to collect and document sales tax from each of their customers in an efficient manner. Congress’ involvement is another eventual...
5 Retirement-Saving Tips for Small Business Owners

5 Retirement-Saving Tips for Small Business Owners

For many small business owners, saving for their own retirement or covering the plans of their employees, can be tricky. Lacking the ease of a government pension or corporate benefit plan, the weight of financial responsibility rests firmly on the shoulders of every entrepreneur – leaving many unsure which investment options to pursue. And with many small businesses occupied by the pressing concerns of the present, often, saving for the future can be the last thing on an owner’s mind – a striking 75% of small businesses having less than $100,000 saved for their retirement, according to a survey by BMO Wealth Management. According to Troy Bender, CEO and President of Asset Retention Insurance Services Inc., however: “you need to save for the necessity stream as well as the discretionary stream. You should get the basics down and really look at covering your lifestyle, so you can look back and smile from the thousands of hours you worked owning a business.” So, to help you do just that, here’s 5 ways Bender recommends entrepreneurs save for their retirement right now. 1)   Follow the “Rule of 100” With so many options available, it can be hard for small businesses to know how much of their money to invest in a retirement account and whether one of high return would be best for them. Fortunately, through the “Rule of 100”, the answer is easy: simply subtract your current age from 100 and the remaining number is the percentage of how much to invest with risk. For instance, if you’re 45, 55% of your funds should go to a risky investment, while...
July 1st LA Minimum Wage Increase

July 1st LA Minimum Wage Increase

Are you an employer in the city of Los Angeles or unincorporated areas of Los Angeles County?  Then legislation which took effect on July 1st, 2016 declared that the minimum wage would increase yearly over the next five years. Anyone who works at least two ours in Los Angeles county in a one-week period is entitled to the minimum wage for the hours worked.  The employee’s employment status, where they live, or where your business is headquartered does not determine the minimum wage that applies. To find out if work done is in an unincorporated area of Los Angeles County, enter the address at the County Registrar-Recorder’s website or call DCBA. These rates are applicable to non-profit organizations as well. For specifics on who is exempt and disclosure requirements, visit www.dcba.lacounty.gov/wageenforcement or contact (800) 593-8222. Please note, failing to meet all requirements surrounding the implementation of the wage increase can result in fines. We have listed them below for your convenience, with a brief explanation on how they can be applied. Violation Fine Amount Failure to post notice of the Los Angeles Minimum Wage rate and Sick Time Benefits- Municipal Code Section 188.03.A. Up to $500 Failure to allow access to payroll records – Municipal Code Section 188.03.B. Up to $500 Failure to maintain payroll records or to retain payroll records for four years – Municipal Code Section 188.03.B. Up to $500 Failure to allow access for inspection of books and records or to interview employees – Municipal Code Section 188.03.C. Up to $500 Retaliation for exercising rights under this article – Municipal Code Section 188.04 – The Penalty for retaliation is...
Was the Taxpayer Transparency and Fairness Act a Good Idea?

Was the Taxpayer Transparency and Fairness Act a Good Idea?

When Governor Jerry Brown signed the Taxpayer Transparency and Fairness Act into California state law on June 27th, 2017, the effective gutting of the Board of Equalization (BOE) into two separate tax agencies – the Office of Tax Appeals (OTA) and the California Department of Tax and Fee Administration (CDTFA) – garnered some mixed and apprehensive feelings from lawmakers and taxpayers alike. Today, this decision still leaves many wondering: was the Taxpayer Transparency and Fairness Act a good idea? What Is Different? Traditionally run by four elected officials, California’s BOE used to decide everything from standard tax appeal cases, to the administration of taxes statewide. And though sometimes a bit more of a sinecure, at least the officials elected often ruled more in favor of the taxpayer as a natural recourse towards reelection and securing a higher office. Today, it is the CDTFA handling sales, use, excise, and business tax administration, as well the assessment of state fees and business tax appeals, while the OTA oversees sales, use, and income tax disputes. Meanwhile, the BOE’s power has been minimized to merely managing public utility property taxes, adjusting local property tax assessments, reviewing insurance company taxes, and administrating the tax rates on alcohol and gas. Why the Change? It’s no secret that the public has been calling for changes within the BOE for a while now due to reoccurring scandals from misspending to nepotism, however, many now worry that the state Legislature’s decision to practically abolish the board – versus implementing a few audits and key policy changes – might have been potentially harmful overkill. The real reason for the...
The Spirit of Entrepreneurship Reaches New Heights

The Spirit of Entrepreneurship Reaches New Heights

Earlier, back in March, we covered the rising new trend of small business optimism as reported by the National Federation of Independent Business’s annual survey. Today, entrepreneurship takes a stand as – per the overall reflected health of the economy – the number of startups and self-made businesses are verging on record breaking numbers since the 2009 recession. In a report that reached D.C.’s “Small Businesses, Big Ideas: Entrepreneurship in Action,” this surge of optimistic new entrepreneurs was documented by Paychex in a study involving the payroll data of startups with 1-49 employees, combined with the responses of 500 surveyed small business owners of 1-500 employees. This data was then divided by industry, gender, age, and geography. According to the results: 64% of business owners thought that they would make a profit, while 58% were optimistic over their prospects for business growth; 71% claimed that the economy is either the same, or better than, when they first began their business, while an overwhelming 79% held that now was the time to begin one; and Business owners who started their company after the recession were 57% more likely to find the business environment improved, versus those who began their companies 20 or more years prior (32%). In addition to measuring entrepreneurial optimism, Paychex’s study also asked owners about some of the obstacles to starting and maintaining a successful business. The response was that: 90% felt concern over rising prices; 67% were worried about finding quality employees; 34% believed that the government should try to prevent these problems with more support, mentoring, training, and coaching programs; while 33% thought that the...

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