Tax Laws Small Business Owners Should Know About

  • By proadAccountId-371192
  • 14 Jun, 2017

Tax Laws Small Business Owners Should Know About

 

When it comes to taxes, there is no such thing as being over prepared. Unfortunately for busy small business owners, keeping up with the rapidly changing federal and state tax laws can feel like a burden. However, it's crucial to pay attention to your tax responsibilities in order to maximize deductions and prevent liability problems in the future. Whether you hire an outside agency or have an internal accountant helping sort out your finances, here are four important things for small business owners to know about federal income taxes in 2017.

 

1.) Affordable Care Act: Any business owner who is defined as an applicable large employer (ALE), under the Employer Shared Responsibility Provision (ESR) of the Affordable Care Act (ACA), must include a detailed reporting of healthcare coverage. Businesses with fewer than 50 full-time equivalent employees are exempt from penalties (also known as the Employer Shared Responsibility Payment or "Play or Pay" penalty) faced by larger employers that do not offer coverage. Additionally, you may be eligible for the Small Business Health Care Tax Credit if you cover at least 50% of your full-time employee's premium costs and you have fewer than 25 full-time equivalent employees.

 

2.) Bonus Depreciation: Under the PATH act, bonus depreciations will expire in 2020. Bonus depreciations are a tax break that allow businesses to deduct 50% of the costs for new capital equipment, such as hardware or software, when it is purchased. However, the percentage will be decreased each year until it expires. In 2017, the deduction will remain at 50%. In 2018, it will be decreased to 40%, and in 2019, it will be decreased to 30%. It may be in your business' best interest to invest in new equipment this year to take advantage of this deduction.

 

3.) Work Opportunity Tax Credit: The Work Opportunity Tax Credit incentivizes employers to hire certain target individuals, including military veterans, who have been out of work for 27 weeks or more. Through the PATH Act, this credit has been extended through 2019. Eligible businesses can receive up to 40% of qualified first year wages up to $6,000 through this credit.

 

4.) R&D Tax Credit: A change through the PATH ACT gives businesses that make less than $50 million annually and invest heavily in research the opportunity to offset the R&D credit against the alternative minimum tax (AMT). Businesses that specialize in areas like construction, software, aerospace subcontracting, bio-tech, and manufacturing can leverage this if they have engineers, scientists or product development employees on staff. Section 121(c) of the PATH Act also adds a new section to IRC 41 stating that qualified small businesses will be able to elect to use part of the current-year credit, all of the current-year credit, or even a carryforward credit against payroll tax. This will allow smaller businesses that may not have a lot of regular income tax liability to still take advantage of the R&D credit benefit.

 

Save yourself time and stress this tax season by working with our trusted Aberdare Business Solutions advisers. For more information or a business evaluation please call our office at 281.599.3380 or email info@aberdare.us.com

Gambling Winnings

By proadAccountId-371192 14 Jul, 2017
HIPAA (Health Insurance Portability and Accountability Act of 1996) is a United States legislation that provides data privacy and security provisions for safeguarding medical information. HIPAA was signed into law by President Bill Clinton in August 1996. The primary purpose of HIPAA: The rule protects from unauthorized disclosure of any PHI and/or ePHI (Protected Health Information and/or electronic Protected Health Information) that pertains to a consumer of healthcare services. The law gave the U.S. Department of Health and Human Services the responsibility of adopting rules to help patients and other healthcare consumers keep as much of their personal information as private as possible. The HIPAA privacy rule applies to "covered entities", such as health plans, healthcare clearinghouses, and healthcare providers. It applies to employers only to the extent that they somehow operate in one or more of those capacities. Not only does HIPAA apply to health plans, healthcare clearinghouses, and healthcare providers, it also applies to “Business Associates” , defined as any organization or individual who acts as a vendor or subcontractor with access to PHI and/or ePHI. Examples of business associates include: data transmission providers and processing firms, data storage or document shredding companies, medical equipment companies, consultants hired for audits & coding reviews, electronic health information exchanges, medical transcription services, external auditors or accountants, etc.
With such a wide range of entities and business associates covered by HIPAA, it’s therefore critically important to know exactly what PHI and/or ePHI entails.

  1. Any information included in a medical record that can identify an individual and was created while providing healthcare (such as    diagnosis or treatment) falls under the category of protected health information.

  2. Any conversation that a physician has with a patient regarding his or her treatment, a patient’s billing information and medical information in the patient’s health insurance company’s database would also be considered PHI and/or ePHI.

Taking the necessary steps to become and remain HIPAA compliant benefits and protects your patients and/or clients. Ignoring these important precautions and practicing outside the law puts your entire organization at risk. Violations of the Health Insurance Portability and Accountability Act carry consequences which the offending facility and its healthcare workers could face if found guilty. These penalties include corrective action, fines, career decline, jail time, and patient mistrust.

If found noncompliant, your facility would have to work through a deadline-driven corrective action plan. The purpose of the plan is to bring your facility up to HIPAA compliance standards. Corrective action plans usually require one or all of these actions to take place within a specified
period of time (even as little as thirty days): ePHI risk analysis, ePHI encryption, documentation of policies and procedures related to privacy, security, and breach notification and workforce training.

HIPAA fines are tiered based on the severity of the violation and the facility’s knowledge of the noncompliance. There are four tiers:
 • If a facility was unaware (and could not have reasonably been aware) of a violation, the penalty ranges from $110 to $55,010 per violation.
 • If a violation occurs due to reasonable cause (and not willful neglect), the penalty ranges from $1,100 to $55,010 per violation.
 • If a violation is due to willful neglect but is corrected in a timely manner, the penalty ranges from $11,002 to $55,010 per violation.
 • If a violation is due to willful neglect but is not corrected in a timely manner, the maximum penalty of $55,010 per violation applies.

If violations are repeated (of identical nature) and occur in the same calendar year, the penalty is $1,650,300.00 per violation.
Other consequences can have a longer-lasting effect on your career. If a breach can be attributed to an individual, that individual is at risk for termination of employment. For example, if an employee accesses the medical records of a patient for no reason (i.e., the employee does not need to know the patient’s history or status to do his or her job), the employee has compromised that patient’s privacy and could be fired. Some violations may lead to jail time.

• Willingly obtaining or disclosing ePHI outside HIPAA rules: Penalty of up to one year in jail.
• Obtaining ePHI through deception: Penalty of up to five years in jail.

These jail sentences are typically accompanied by fines of $50,000 to $250,000. The fines and jail time for each offense are dependent on the charges as well as the state in which the offense occurred.

Failing to comply with HIPAA guidelines and protect your patients’ private health information could be truly damaging to your practice/business. Your patients put their trust in your company to keep their information private and failing to be HIPAA compliant is putting your patients and company at risk.

If you need more information, want to understand the laws, or be assured that your Business Associates are not putting your HIPAA status at risk call the professionals at Aberdare Business Solutions 281-599-3380 for more information.
By proadAccountId-371192 14 Jul, 2017

Social Security – The Social Security wage base increases in 2017 to $127,200, up $8,700 from 2016’s cap. The Social Security tax rate on employers and employees remains at 6.2%. The employer’s share of Medicare tax stays at 1.45% of all pay. The employees’ share is 1.45% too, but they also pay the 0.9% Medicare surtax on wages that exceed $200,000 for singles and $250,000 for married couples. This extra levy doesn’t hit employers. Self-employeds are also subject to the surtax.

 

Social Security recipients see a tiny 0.3% hike in their benefits in 2017. The earnings test limits head up, too. Individuals who turn 66 in 2017 do not lose any benefits if they earn $44,880 or less before they reach that age. People who are age 62 through 65 by the end of 2017 can make up to $16,920 before they lose any benefits. There is no earnings cap once a beneficiary turns 66. The amount needed to qualify for coverage climbs to $1,300 a quarter. So earning $5,200 anytime during 2017 will net the full four quarters of coverage.

For questions pertaining to your social security withholding or taxable earnings contact the professionals at Aberdare Business Solutions.  You can reach us Monday through Friday at 281-599-3380 or send us an email at info@aberdare.us.com
By proadAccountId-371192 13 Jul, 2017
The Gramm-Leach-Bliley Act (GLB Act or GLBA) , also known as the Financial Modernization Act of 1999, is a federal law enacted in the United States to control the ways that financial institutions deal with the private information of individuals. The Act required the Federal Trade Commission (FTC) and other government agencies that regulate financial institutions to implement regulations to carry out the Act's financial privacy provisions.

Who Does GLBA Apply To?
All organizations, regardless of size, that are providing financial products or services to consumers. This includes check cashing businesses, payday lenders, mortgage brokers, non-bank lenders, personal property or real estate appraisers, retailers that issue branded credit cards, professional tax preparers, and courier services. The law also applies to companies that receive information about customers of other financial institutions, including credit reporting agencies and ATM operators.
The main focus of the GLB Act is to expand consumer data privacy safeguards and restrictions. The primary concern of professionals and financial institutions is to secure and ensure the confidentiality of customers’ private and financial information. Maintaining compliance is critical for any financial institution, as violations can be both costly and detrimental to continued operations. However, by taking steps to safeguard NPI (Nonpublic Personal Information) and comply with the GLBA, organizations will not only benefit from improved security and the avoidance of penalties, but also from increased customer trust and loyalty.

The Act consists of three sections:

1. The Financial Privacy Rule : This requires institutions to provide particular notices and to comply with certain limitations on disclosure of nonpublic personal information. An institution must provide notice of its privacy policies and practices with respect to both affiliated and nonaffiliated third parties, and allow the consumer to opt out of the disclosure of the consumer’s nonpublic personal information to a nonaffiliated third party if the disclosure is outside the exceptions.

2. The Safeguards Rule : This requires financial institutions under the jurisdiction of the FTC (Federal Trade Commission) to have measures in place to keep customer information secure. It also requires such companies/entities to develop their own safeguards. Companies covered by the rule are responsible for taking steps to ensure that their affiliates and service providers safeguard customer information in their care.
07-10-17 GLBA

3. The Pretexting Provisions : This prohibits the practice of accessing private information using false pretenses.
GLBA also requires financial institutions to give customers written privacy notices that explain their information-sharing practices.
Being noncompliant calls for severe civil and criminal penalties including fines and imprisonment. If a company or institution is found noncompliant, it will be subjected to a civil penalty of not more than $100,000 per violation. Officers and directors of the institution will be subject to, and personally liable for, a civil penalty of not more than $10,000 per violation. The institution and its officers and directors will also be subject to fines in accordance with Title 18 of the United States Code, imprisonment for no more than five years, or both. If the act is violated at the same time that another federal law is violated, or as part of a pattern of any illegal activity involving more than $100,000 within a 12-month period, the violator's fine will be doubled and he or she will be imprisoned for up to 10 years.

Need more information?  Know that Aberdare Business Solutions is COMPLIANT and can assist you in safeguarding your data.  Call one of our professionals today for additional information 281-599-3380.
By proadAccountId-371192 05 Jul, 2017

Can you rely on IRS’s frequently asked questions as legal authority? Generally, no the agency says privately.

 

There are some exceptions, such as in cases where the FAQ’s have been published in the Internal Revenue Bulletin, or when the Service otherwise indicates that the items constitute formal authority and can be used to sustain a legal position.

 

Otherwise, they are informal guidance, similar to statements found in IRS publications and private letter rulings.   If you need IRS review of findings or additional explanations of IRS rules and regulations please contact the professionals at Aberdare Business Solutions.  We are available to assist in making sense of the IRS paperwork and making sure you understand notices that you may be recieving.  Call us today at  281-599-3380.

By proadAccountId-371192 05 Jul, 2017

 Here are a few tips to nurture your common sense:

 

  • Stop, look and listen. Notice others who may need a door opened, an email response, a word of encouragement, or a handwritten thank you note.

 

  • Timing is key. Use it to everyone’s highest good.

 

  • Weigh responses verbally and technologically, especially when there is something in a message that’s elevated your blood pressure. Think twice before “Reply” and three time before “Reply to all.”

 

  • Customers are the reason we have jobs, Treat them as guest, not interruptions.

 

  • Learn how to ask the right questions.

 

  • No phubbing (snubbing someone by being engrossed in one’s phone).

 

  • Don’t throw your pearls to the pigs. Associate with people who encourage and appreciate you.

 

  • Take time to assess situations.

 

  • Contemplate what it takes to be a friend and valuable asset in your organization.

 

  • Pay closer attention to other’s likes and dislikes.

 

  • Act your wage.

 

  • Manage time efficiently.

 

  • Be present.

 

  • Never miss an opportunity to say thanks.

 

  • May you seek and find an abundance of common sense!
´╗┐Reproduced from the BBB June 2017 Newsletter.  
  • For info on Etiquette, Impression Management and Eticool School (manners classes for children): hperry@helen-perry.com ; 713. 206.1800

By proadAccountId-371192 05 Jul, 2017

Dealing with Disasters – With hurricane season approaching, think about disaster preparedness. IRS has some suggestions.

 

·        Safeguard tax records in a protected place.

·        Scan important papers into electronic format and make sure to have backup copies.

·        Take pictures or videos of the content of your home or business premises, and store images off-site.

 

Aberdare Business Solutions has an updated RECORDS RETENTION GUIDE. If you would like one sent to you please contact the professionals in our office and we will be happy to mail or email one for your business and personal records. Call Us Today!! 281-599-3380.  

By proadAccountId-371192 15 Jun, 2017

Social Security Numbers and Employee Name Reporting Errors

When there is a mismatch in the employee name and/or Social Security number (SSN) as reported on Forms/N-2, compared to records at the Social Security Administration, the wage information reported with the mismatched name posted to suspense, any employee with a non-matching SSN on Form W-2 will lost benefits to which he or she is entitled.

In the case of information returns, such as Form 1099-MISC, under present rules the employer can establish “reasonable cause” for failure to match names and tax identification numbers (TINS), by presenting a properly completed From W-9 (Request for Taxpayer Identification Number and Certification). However, employers do you have an equivalent document to prove due diligence for Form W-2 reporting. Form W4 (Employee’s Withholding Allowance Certificate) has been suggested for this purpose, but there is no current requirement that every employee must file Form W-4 with the employer.

Under the Internal Revenue Code, the penalty for reporting invalid SSN’s on Form W-2 without reasonable cause, may be imposed if the number of incorrectly reported SSN’s for a tax year exceeds the greater of 1- or 0.5% of the information returns required to be filed. The maximum penalty under Code section 6722 is $50 for each incorrect payee statement, up to a maximum aggregate penalty of $100,000 per filer for the tax year.

“Reasonable Cause” Had Been Clarified As An Employer Defense

Employers penalized for putting an incorrect SSN on a Form W-2 are now helped by a seemingly more lenient IRS view of “reasonable cause,” based on the employee’s failure to provide a correct SSN. Specifically, the IRS requires only three things for the “reasonable cause” defense to apply:

·        that the employer received an SSN from the employee

·        that the employer relied on that number in good faith, entering it into its payroll records and putting it on the employee’s Form W-2; and

·        that the employer later received a penalty notice from the IRS notifying the employer that the employee’s SSN was incorrect

In practical terms, the IRS says, “reasonable care” by the employer, justifying waiver by the IRS of the penalty, could work as follows. The employer would have to show that it made an initial request for the employee’s SSN, normally done routinely when the employee begins working for the employers; and that the employer indeed received the SSN from the employee, usually on Form W-4. The employer would not be required to make a further solicitation for the employee’s SSN unless the IRS notifies the employer that the employee’s SSN is incorrect, for example by means of a penalty notice. An employer which receives such a notice may be required to make up to two annual requests after receiving the notice.

If you need assistance with matters relating to 1099's or W2 Social Security Match issues please contact the professionals at Aberdare Business Solutions at info@aberdare.us.com or 281.599.3380,

By proadAccountId-371192 14 Jun, 2017

Tax Laws Small Business Owners Should Know About

 

When it comes to taxes, there is no such thing as being over prepared. Unfortunately for busy small business owners, keeping up with the rapidly changing federal and state tax laws can feel like a burden. However, it's crucial to pay attention to your tax responsibilities in order to maximize deductions and prevent liability problems in the future. Whether you hire an outside agency or have an internal accountant helping sort out your finances, here are four important things for small business owners to know about federal income taxes in 2017.

 

1.) Affordable Care Act: Any business owner who is defined as an applicable large employer (ALE), under the Employer Shared Responsibility Provision (ESR) of the Affordable Care Act (ACA), must include a detailed reporting of healthcare coverage. Businesses with fewer than 50 full-time equivalent employees are exempt from penalties (also known as the Employer Shared Responsibility Payment or "Play or Pay" penalty) faced by larger employers that do not offer coverage. Additionally, you may be eligible for the Small Business Health Care Tax Credit if you cover at least 50% of your full-time employee's premium costs and you have fewer than 25 full-time equivalent employees.

 

2.) Bonus Depreciation: Under the PATH act, bonus depreciations will expire in 2020. Bonus depreciations are a tax break that allow businesses to deduct 50% of the costs for new capital equipment, such as hardware or software, when it is purchased. However, the percentage will be decreased each year until it expires. In 2017, the deduction will remain at 50%. In 2018, it will be decreased to 40%, and in 2019, it will be decreased to 30%. It may be in your business' best interest to invest in new equipment this year to take advantage of this deduction.

 

3.) Work Opportunity Tax Credit: The Work Opportunity Tax Credit incentivizes employers to hire certain target individuals, including military veterans, who have been out of work for 27 weeks or more. Through the PATH Act, this credit has been extended through 2019. Eligible businesses can receive up to 40% of qualified first year wages up to $6,000 through this credit.

 

4.) R&D Tax Credit: A change through the PATH ACT gives businesses that make less than $50 million annually and invest heavily in research the opportunity to offset the R&D credit against the alternative minimum tax (AMT). Businesses that specialize in areas like construction, software, aerospace subcontracting, bio-tech, and manufacturing can leverage this if they have engineers, scientists or product development employees on staff. Section 121(c) of the PATH Act also adds a new section to IRC 41 stating that qualified small businesses will be able to elect to use part of the current-year credit, all of the current-year credit, or even a carryforward credit against payroll tax. This will allow smaller businesses that may not have a lot of regular income tax liability to still take advantage of the R&D credit benefit.

 

Save yourself time and stress this tax season by working with our trusted Aberdare Business Solutions advisers. For more information or a business evaluation please call our office at 281.599.3380 or email info@aberdare.us.com
By proadAccountId-371192 14 Jun, 2017

Even though we are mid way through the tax year, it never hurts to just brush up on a few of the 2017 tax changes for the year and see if they impact you.  This gives you 6 months to make any adjustments necessary, to bring you to a good place by the end of the year.

****The Social Security wage base increases in 2017 to $127,200, up $8,700 from 2016’s cap . The Social Security tax rate on employers and employees remains at 6.2%. The employer’s share of Medicare tax stays at 1.45% of all pay. The employees share is 1.45%, too, but they also pay the 0.9% Medicare surtax on wages that exceed $200,000 for singles and $250,000 for married couples. This extra levy doesn’t hit employers. Self-employeds are also subject to the surtax.

 Social Security recipients see a tiny 0.3% hike in their benefits in 2017. The earnings test limits head up, too. Individuals who turn 66 in 2017 do not lose any benefits if they earn $44,880 or less before they reach that age. People who are age 62 through 65 by the end of 2017 can make up to $16,920 before they lose any benefits. There is no earnings cap once a beneficiary turns 66. The amount needed to qualify for coverage climbs to $1,300 a quarter. So earning $5,200 anytime during 2017 will net the full four quarters of coverage.


**** Businesses that hire the long-term unemployed get a tax credit . The work opportunity tax credit is expanded to cover employers that hire people who’ve been out of work for 27 weeks or more and received unemployment benefits. The 40% credit on the first $6,000 in wages applies for those beginning work after 2015.


**** The 2017 standard mileage rate for business driving falls to 53 -1/2 cent a mile, a 0.5 cent drop . The rate decreases to 17 cent a mile for travel for medical purposes and job-related moves. But the rate for charitable driving remains at 14cent per mile.

If you have questions or would like to arrange a meeting to see how these changes impact your business please do not hesitate to contact our office to set up a meeting or conference call with one of our professionals.   Aberdare Business Solutions 281.599.3380

By proadAccountId-371192 14 Jun, 2017

Combating payroll tax fraud is a high priority for IRS and the Justice Dept. Department Of Justice is pursuing an increasing number of civil injunctions against businesses, and their officers, that have repeatedly failed to deposit taxes withheld from workers. 

 These serial offenders must timely pay their employment taxes and notify the Service after making payroll deposits. They can’t transfer assets or establish a new business until the bill is fully paid. There are more criminal prosecutions of willful violators, too.

If you need assistance processing your payroll or calcuating your payroll taxes contact the payroll professionals at Aberdare Business Solutions, where are ready to assist.  281.599.3380

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