employee

Reduce Insurance Costs by Encouraging Employee Wellness

Protecting your company through the purchase of various forms of insurance is a risk-management necessity. But just because you must buy coverage doesn’t mean you can’t manage the cost of doing so.

Obviously, the safer your workplace, the less likely you’ll incur costly claims and high workers’ compensation premiums. There are, however, bigger-picture issues that you can confront to also lessen the likelihood of expensive payouts. These issues tend to fall under the broad category of employee wellness.

Physical well-being

When you read the word “wellness,” your first thought may be of a formal wellness program at your workplace. Indeed, one of these — properly designed and implemented — can help lower or at least control health care coverage costs.

Wellness programs typically focus on one or more of three types of services/activities:

  1. Health screenings to identify medical risks (with employee consent),
  2. Disease management to support people with existing chronic conditions, and
  3. Lifestyle management to encourage healthier behavior (for example, diet or smoking cessation).

The Affordable Care Act offers incentives to employers that establish qualifying company wellness programs. As mentioned, though, it’s critical to choose the right “size and shape” program to get a worthwhile return on investment.

Mental health

Beyond promoting physical well-being, […]

By |November 7th, 2018|business|0 Comments

Now’s The Time to Review Your Business Expenses

As we approach the end of the year, it’s a good idea to review your business’s expenses for deductibility. At the same time, consider whether your business would benefit from accelerating certain expenses into this year.

Be sure to evaluate the impact of the Tax Cuts and Jobs Act (TCJA), which reduces or eliminates many deductions. In some cases, it may be necessary or desirable to change your expense and reimbursement policies.

What’s deductible, anyway?

There’s no master list of deductible business expenses in the Internal Revenue Code (IRC). Although some deductions are expressly authorized or excluded, most are governed by the general rule of IRC Sec. 162, which permits businesses to deduct their “ordinary and necessary” expenses.

An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your business. (It need not be indispensable.) Even if an expense is ordinary and […]

By |October 15th, 2018|business, deduction, deductions, expensing, New Tax Laws|0 Comments

Keep it SIMPLE: A Tax-Advantaged Retirement Plan Solution for Small Businesses

If your small business doesn’t offer its employees a retirement plan, you may want to consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions and help you attract and retain employees. For a variety of reasons, a SIMPLE IRA can be a particularly appealing option for small businesses. The deadline for setting one up for this year is October 1, 2018.

The basics

SIMPLE stands for “savings incentive match plan for employees.” As the name implies, these plans are simple to set up and administer. Unlike 401(k) plans, SIMPLE IRAs don’t require annual filings or discrimination testing.

SIMPLE IRAs are available to businesses with 100 or fewer employees. Employers must contribute and employees have the option to contribute. The contributions are pretax, and accounts can grow tax-deferred like a traditional IRA or 401(k) plan, with distributions taxed when taken in retirement.

As the employer, you can choose from two contribution options:

  1. Make a “nonelective” contribution equal to 2% of compensation for all eligible employees. You must make the contribution regardless of whether the employee contributes. This applies to compensation up to the annual limit of $275,000 for 2018 (annually adjusted for inflation).
  2. Match […]
By |September 6th, 2018|investment, ira, retirement|0 Comments

Contemplating Compensation Increases and Pay for Performance

As a business grows, one of many challenges it faces is identifying a competitive yet manageable compensation structure. After all, offer too little and you likely won’t have much success in hiring. Offer too much and you may compromise cash flow and profitability.

But the challenge doesn’t end there. Once you have a feasible compensation structure in place, your organization must then set its course for determining the best way for employees to progress through it. And this is when you must contemplate the nature and efficacy of linking pay to performance.

Issues in play

Some observers believe that companies shouldn’t use compensation to motivate employees because workers might stop focusing on quality of work and start focusing on money. Additionally, employees may feel that the merit — or “pay-for-performance” — model pits staff members against each other for the highest raises.

Thus, some businesses give uniform pay adjustments to everyone. In doing so, these companies hope to eliminate competition and ensure that all employees are working toward the same goal. But, if everyone gets the same raise, is there any motivation for employees to continually improve?

2 critical factors

Many businesses don’t think so and do use additional money […]

By |August 20th, 2018|business, employee evaluations, employer|0 Comments

How to Avoid Getting Hit with Payroll Tax Penalties

For small businesses, managing payroll can be one of the most arduous tasks. Adding to the burden earlier this year was adjusting income tax withholding based on the new tables issued by the IRS. (Those tables account for changes under the Tax Cuts and Jobs Act.) But it’s crucial not only to withhold the appropriate taxes — including both income tax and employment taxes — but also to remit them on time to the federal government.

If you don’t, you, personally, could face harsh penalties. This is true even if your business is an entity that normally shields owners from personal liability, such as a corporation or limited liability company.

The 100% penalty

Employers must withhold federal income and employment taxes (such as Social Security) as well as applicable state and local taxes on wages paid to their employees. The federal taxes must then be remitted to the federal government according to a deposit schedule.

If a business makes payments late, there are escalating penalties. And if it fails to make them, the Trust Fund Recovery Penalty could apply. Under this penalty, also known as the 100% penalty, the IRS can assess the entire unpaid amount against a […]

By |July 9th, 2018|employer, income tax, tax|0 Comments

Finding a 401(k) That’s Right for Your Business

By and large, today’s employees expect employers to offer a tax-advantaged retirement plan. A 401(k) is an obvious choice to consider, but you may not be aware that there are a variety of types to choose from. Let’s check out some of the most popular options:

Traditional. Employees contribute on a pretax basis, with the employer matching all or a percentage of their contributions if it so chooses. Traditional 401(k)s are subject to rigorous testing requirements to ensure the plan is offered equitably to all employees and doesn’t favor highly compensated employees (HCEs).

In 2018, employees can defer a total amount of $18,500 through salary reductions. Those age 50 or older by year end can defer an additional $6,000.

Roth. Employees contribute after-tax dollars but take tax-free withdrawals (subject to certain limitations). Other rules apply, including that employer contributions can go into only traditional 401(k) accounts, not Roth 401(k)s. Usually a […]

By |June 27th, 2018|401k, roth ira|0 Comments

Payments to Employees Affected by the Local Fires

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During these tragic times businesses may want to help employees affected by the local fires.  The purpose of the following information is to highlight some tax efficient opportunities to help employees affected by the local fires which were declared a qualified disaster by President Trump.  IRC section 139 allow employers to provide qualified disaster relief payments to employees that have incurred unreimbursed expenses due to a qualified disaster (such as the local fires) and have those payments excluded from the employees gross income and included as deductible expense for the business making the payment.   For the payments to be considered qualified disaster relief payments, they should be for either items i. or ii. below, but only to the extent not already covered by insurance.

  1. Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a disaster. This would include expenses related to loss of use.
  2. Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster.

Other items to point out:

To […]

By |October 19th, 2017|business, Community, disaster, relief, tax|0 Comments

Employers Need to Understand Their Employment Tax Responsibilities

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The IRS has issued a fact sheet to remind business owners how critical it is to understand the various types of employment-related taxes they may be required to deposit and report. This fact sheet provides information on some of the more common employment tax topics posed by business owners, including worker classification, Voluntary Classification Settlement Program (VCSP), fringe benefits, officer compensation, and backup withholding and information return penalties. The fact sheet is available at https://www.irs.gov/uac/Newsroom/General-Employment-Tax-Issues .

If you have any questions, please contact your Linkenheimer CPA at (707) 546-0272.

By |November 18th, 2015|business, employer, irs|0 Comments

Health Care—Reporting Reminder for Applicable Large Employers

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The IRS has reminded Applicable Large Employers (ALEs) (generally those with 50 or more full-time equivalent employees) that they are subject to new reporting requirements for 2015. The first statements (Form 1095-C for employees and the IRS, and Form 1094-C for the IRS only) must be provided to employees by 2/1/16 and to the IRS by 2/29/16 (3/31/16, if filed electronically). The reports will provide information about health coverage the ALE offered (or didn’t offer) to each full-time employee, which the IRS will use to determine whether the employer shared responsibility payment applies to the ALE and if the employee is eligible for the premium tax credit. All ALEs are subject to this reporting requirement—regardless of whether they offer coverage or are subject to the employer shared responsibility provisions. The IRS will use the information to determine if the ALE is eligible for transition relief under the employer shared responsibility provisions. If you have any questions on how the reporting requirements effect you and your business, please contact your Linkenheimer CPA.

By |October 19th, 2015|Health care|0 Comments

Paid Sick Leave Update

Entitlement:
An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave. Paid sick leave accrues at the rate of one hour per every 30 hours worked, paid at the employee’s regular wage rate. Accrual shall begin on the first day of employment or July 1, 2015, whichever is later. Accrued paid sick leave shall carry over to the following year of employment and may be capped at 48 hours or 6 days. However, subject to specified conditions, if an employer has a paid sick leave, paid leave or paid time off policy (PTO) that provides no less than 24 hours or three days of paid leave or paid time off, no accrual or carry over is required if the full amount of leave is received at the beginning of each year in accordance with the policy.
Usage:
An employee may use accrued paid sick days beginning on the 90th day of employment. An employer shall provide paid sick days upon the oral or written request of an employee for themselves or a family member for the diagnosis, care or treatment of an existing health condition or preventive care, or specified purposes […]

By |June 22nd, 2015|employer|0 Comments