Is your child ready for a summer job?

Is your child ready for a summer job?

If your child is planning to work this summer, make sure you know the tax basics.

Tax returns. Assuming no other sources of income, your child will be able to earn up to $6,300 in 2016 before a federal income tax return has to be filed. However, if income tax is withheld from paychecks, your child will have to file a return to claim a refund.

Federal income tax withholding. When hired, your child will have to fill out Form W-4, Employee's Withholding Allowance Certificate. This form tells the employer how much federal income tax to withhold. If the job involves tips, remember that tips are taxable income. Have your child maintain records of amounts received.

Financial aid. Summer earnings can affect eligibility for college financial aid. If you're counting on financial aid, check out the earnings limit ahead of time.

Retirement saving. Consider encouraging your child to open a Roth IRA. Amounts invested in a Roth can grow tremendously due to tax-free compounding over many years. As an incentive, you might match any amounts your child is willing to save.

For assistance with the tax issues relating to summer employment, contact us.

Improve productivity with happy employees

Improve productivity with happy employees

Happy employees can have a positive impact on your operations, customer support, and profit level. Here are suggestions for keeping your workforce upbeat.

Lead by example. Demonstrate the personal discipline and commitment you hope to instill in your workers by showing up every day with a positive attitude.

Emphasize the link between attendance and productivity. Absenteeism is a symptom of unhappy employees. Help your employees understand the importance of the role they play in the success of the business.

Learn what motivates your employees. Conduct an online survey to learn if money, recognition, promotion, or time off drives your employees.

Enrich skillsets. Cross-training and job rotation can improve appreciation for overall business operations and mitigate boredom and dissatisfaction.

Create a time-off bank. Modify the traditional offering of vacation, personal, and sick days. Give your employees the responsibility and ability to balance work and home obligations by empowering them to manage total available paid time off.

Other suggestions for a healthy working environment and happy employees include celebrations and team building. While these "soft" methods may seem a distraction from everyday business, your employees will appreciate the effort and your business will profit from the resulting improvements in performance.

What you need to know about hiring seasonal workers

What you need to know about hiring seasonal workers

If summertime is a busy time for your business, you may be ready to hire seasonal workers. Here are tax rules to keep in mind.

● Affordable Care Act exception. When you employ 50 or more full-time employees, you're considered a "large employer" and are generally required to provide health insurance coverage or pay a penalty. However, the law provides an exception for seasonal workers, defined as those you employ for not more than 120 days during the prior calendar year. In general, your answer to two questions determines if you qualify for the exception. Did your workforce exceed 50 full-time employees for 120 days or fewer during the year? Were the employees in excess of 50 who were employed during that period seasonal workers? If both answers are yes, you're generally not considered a large employer.

● Employment taxes. Temporary workers are typically subject to the same employment tax rules as regular employees. You'll generally have to withhold social security and Medicare taxes, as well as federal income tax from wages. You'll also have to follow payroll tax deposit rules and employment return filing requirements.

● Employment tax returns. Special filing rules may apply when you only hire employees at a specific season of the year, such as summertime. For each quarter that you pay wages, you can check the box for "seasonal employer" on Form 941, Employer's Quarterly Federal Tax Return. By notifying the IRS of your seasonal status, you're not required to file returns for quarters when you have no wages or tax liability.

Please contact us for more information about payroll tax rules, recordkeeping requirements, and documentation for seasonal employees. We're here to make sure that your busy summer season goes smoothly.

Summer day care expenses can add up to a tax credit

Summer day care expenses can add up to a tax credit

Did you know that you can claim a federal income tax credit when you pay someone t

o care for your kids while you're at work or school? The Child and Dependent Care Credit is valuable because it reduces the amount of tax you owe dollar-for-dollar. Here's an overview of the rules.

●    Child care expenses must be work-related. This requirement means you have to pay for child care so you can work or actively look for work. If you're married, you and your spouse must both work. Exceptions to this "earned income" rule include spouses who are full-time students or who are not able to care for themselves due to mental or physical limitations.

● Expenses generally must be paid for care of your under-age-13 child. However, expenses you pay to care for a physically or mentally disabled spouse or adult dependent may also count.

● Expenses must be paid to someone who is not your dependent. Amounts you pay your spouse, your child's parent (such as an ex-spouse), anyone claimed as a dependent on your tax return, or your own child age 18 or younger do not qualify for the credit. For example, if you pay your 17-year-old dependent child to watch a younger sibling, that expense doesn't count for purposes of claiming the credit.

● The care provider has to be identified on your tax return. You'll typically need to show the name, address, and taxpayer identification number. You can request this information by asking your provider to complete Form W-10, Dependent Care Provider's Identification and Certification.

● The amount you can claim depends on how much you spend for the care up to a dollar limit of $3,000 of expenses for one dependent and $6,000 for two or more dependents.

Contact us for more information.

When disaster strikes, will your business be prepared?

When disaster strikes, will your business be prepared?

Disaster preparedness involves answering the question: How would a disaster affect your business? If you're not sure, it's time to start planning. Here's a quick look at how you can prepare beforehand, and what relief might be available afterward.

●        BEFORE DISASTER STRIKES

Identify key issues. Bring together managers of key areas and brainstorm on the critical steps needed to recover from a disaster. Consider at least two scenarios: a company-specific event such as a fire that affects only your business, and a regional disaster that affects the whole area. Since you can't anticipate every need, your goal is to identify key issues and make basic preparations.

Establish a communications protocol. Think about how you'll communicate with employees, vendors, and customers. At a minimum, each manager should have a contact list for key employees. Include phone numbers and personal email addresses.

Backup company records. Identify essential company records and know how you'll access them. Make sure backups of your electronic information are stored in a safe location off-site. You may also need paper backups of certain key information in case of a power blackout. Create a master list of federal, state, and city tax information, bank account passwords, account number and login information, and insurance policy numbers.

Review your insurance. Meet with your agent and review the scope and dollar limits of your coverage. Discuss business interruption insurance. Make sure you understand your coverage.

●        AFTER DISASTER STRIKES

Apply for relief assistance. Know the steps required to apply for insurance reimbursements and federal disaster loans or grants.

Take advantage of tax breaks. Your business may qualify for a casualty loss deduction. If you're in a Presidentially declared disaster area, you have the option of claiming the deduction against your prior year's taxes for a faster refund.

Other tax benefits include extended due dates and penalty relief. Contact us for tax advice on your specific situation.

Make time for midyear tax planning

Make time for midyear tax planning

One benefit of midyear tax planning is that you have a solid foundation for making decisions and enough time to implement them. In addition, because the rules haven't changed much this year, you can use last year's tax return as a starting point for 2016 planning ideas. We encourage you to review your current tax situation. Contact us for effective tax-saving strategies you can put in place during the remainder of this year

HSA contribution limits barely budge for 2017

HSA contribution limits barely budge for 2017

The IRS recently announced the inflation-adjusted contribution limits for health savings accounts (HSAs) for 2017. HSAs combine high-deductible health insurance plans with a medical savings account. You make tax-deductible deposits into the savings account, and later withdraw the funds to pay unreimbursed medical expenses. The 2017 contribution limit for individuals is $3,400, up $50 from 2016. The limit for family coverage is $6,750, unchanged from 2016. If you're age 55 or older, you can also make a catch-up contribution of an additional $1,000.

Will hiring seasonal workers make you subject to Affordable Care Act penalties?

Will hiring seasonal workers make you subject to Affordable Care Act penalties?

Generally, having 50 or more employees means you need to provide health insurance or pay a penalty. But what happens when you hire workers who perform labor or services on a seasonal basis – for instance, just for the summer? In this case, the law provides an exception, based on the number of employees yo

u have, and how many are seasonal workers. Contact us for more information.

Income changes? Check your advance payments of the premium tax credit

Income changes? Check your advance payments of the premium tax credit

Did you choose to reduce your monthly health insurance premium by having advance payments of your federal income tax credit sent to your insurance company? If you're getting married this summer, having a baby, or changing jobs, you need to estimate the impact of those events on the advance payments. Otherwise you may end up with a surprise in the form of a smaller refund or a req
uired repayment next year when you file your federal income tax return. Contact us for details.

Report your foreign accounts by June 30

Report your foreign accounts by June 30  

If you hold foreign bank or financial accounts, or have signature authority over such accounts, and the total value of all your accounts exceeds $10,000 at any time during the calendar year, you may be required to file a Treasury Department report known as the FBAR. It's easy to overlook this requirement because it's separate from your federal income tax filing, with a different deadline and strict rules.

"FBAR" refers to Form 114, Report of Foreign Bank and Financial Accounts. Your 2015 Form 114 must be filed electronically with the Treasury Department no later than June 30, 2016. No filing extension is available. Contact us if you need details or assistance.

            

         

Student debt: It pays to consider the alternatives first

Student debt: It pays to consider the alternatives first

Will someone in your family be heading off to college soon? Before you take out student loans to pay tuition and other expenses, consider the results of a recent survey conducted for the American Institute of Certified Public Accountants. The survey found that more than 80% of those surveyed said they made financial or personal sacrifices to pay back student loans. If you need suggestions for alternative ways to finance a college education, give us a call.