Workplace Etiquette

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As a business owner or employer, you have a long list of priorities when it comes to how to run your workplace. Somewhere at the top of that list should be workplace etiquette, more specifically sexual harassment, discrimination, and gender bias. In today’s society, more and more attention is being paid to biased hiring, treatment, and payment. Not only is it your legal obligation as an employer to protect your employees from harassment under Title VII of the Civil Rights Act (more information can be found at https://www.eeoc.gov/laws/statutes/titlevii.cfm), but as a savvy employer you know that the price to pay for low morale, low productivity and lawsuits due to harassment is steep. There are some basic and easy steps that you can take to protect yourself and business from potential lawsuits and your employees or coworkers from biased treatment and harassment. Even as an employee, it is extremely important for you to know your rights and what you are guaranteed at your workplace.

The first step to take is to create a clear, gender neutral, and strict discrimination and harassment zero tolerance policy for your business. This policy should outline and define what exactly sexual harassment, gender bias, and discrimination is. It should explain what is considered appropriate and inappropriate behavior, what constitutes harassment and discrimination, and how exactly to report a conduct violation. The standards for behavior should be exceedingly clear and easy to understand, as well as be applicable to everyone, regardless of title or position. The policy should also include a statement that each claim will be investigated thoroughly in a timely fashion and that there will be no toleration for any retaliation against anyone who files a claim. In your Employee Handbook there should be an outline of the disciplinary actions to be imposed if and when a claim is verified.

Your company should express in writing very clear hiring and promotion criteria available to everyone. This criteria should be gender and racially neutral to ensure that everyone has a fair chance at meeting the requirements regardless of outward appearance or identification. This will also help ensure that jobs/promotions are given to those selected based on their ability alone.

Salaries should be regularly reviewed with special attention paid to the differences presented between genders, races, etc. This practice will ensure that your workplace is being fair and adhering to your harassment and discrimination policy.

Make sure you and your employees are comfortable talking about the uncomfortable. Discrimination and sexual harassment are gender neutral offenses. Anyone can be harassed or discriminated against. Thus, everyone should feel comfortable reporting a violation they have either experienced or witnessed. Be certain that your employees are well versed in your policy, what their rights are, and how you are planning on protecting them. Annual training sessions in harassment and discrimination recognition and prevention are highly recommended. These sessions should cover definitions of sexual harassment and discrimination of all kinds, your policy, how it is enforced, procedures it includes and the monitoring process. It is important on this subject that you clearly state how seriously all complaints are taken.

Do you want additional clarity on ensuring your establishment is a safe and friendly one? Here is a PowerPoint we found very enlightening! https://elpnet.org/sites/default/files/portfolio/breaking_down_bias_v1.0_september_2016.pdf

We at Mazur & Associates, Certified Public Accountants and Business Advisors are here to guide you. We are available by telephone and email, so please call (732) 936-1230 or email steve@mazurcpas.com to schedule an appointment today!

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Identity Theft: Protect Yourself

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Identity theft: we’re all afraid of it, but what if there was a way to alleviate that fear? Understanding identity theft and knowing how to protect yourself is the best way to ease your mind.

What is tax related identity theft, anyway? In simple terms, tax related identity theft is when someone steals your Social Security Number (SSN) and uses it to file a fraudulent tax return to claim the tax refund.

How do you know if you’ve been victimized? There are a lot of warning signs and signals that you may be in danger or are being victimized by an identity thief. If the IRS or your personal tax professional contacts you about more than one tax return filed under your name and SSN, if you owe additional tax or have collection actions taken against you for a tax year that you have not filed a return for, or if your IRS records indicate that “you” received some sort of income from an employer you do not work for, you may be in danger of having your tax identity stolen. Also possible is a scenario in which you may discover that a return has already been filed using your SSN AFTER you efile your return. The IRS may also contact you via a letter stating that they have received a suspicious tax return filed under your SSN. Receiving this type of correspondence indicates that you are in danger or have been victimized.

Now you know what tax related identity theft is and what the warning signs are. But what do you do if you think your tax identity has been stolen? First, you will not be able to efile your tax return to the IRS. However, you still will have to file your tax return on paper and pay any taxes due, if any. If it is determined that you are a victim of tax related identity theft, you should file a complaint with the Federal Trade Commission at https://identitytheft.gov. You should place what’s called a “fraud alert” on your credit records. You can do so by contacting any of the following major credit bureaus: Equifax, www.Equifax.com, 1-888-766-0008, Experian, www.Experian.com, 1-888-397-3742, or TransUnion, www.TransUnion.com, 1-800-680-7289. Next you should contact your bank or other financial institutions and close any account, financial or credit, which may have been tampered with or used without your permission.

If you feel as though your SSN has been stolen or compromised, the prudent course is to respond to any IRS notice immediately by calling the number provided on that notice. Complete IRS Form 14039 (Identity Theft Affidavit) if your efiled return is rejected due to a duplicate being filed under your name or if you are instructed to do so by the IRS. The Form 14039 can be found at https://www.irs.gov. Print the form and attach it to your paper return. Then mail your return using certified mail as per the instructions on the form and website. You will receive an acknowledgement letter back from the IRS. Typically, each identity theft case takes 120 days to resolve, but often the process can involve more than six months and multiple correspondences from the IRS.

Reducing your risk for tax related identity theft is absolutely doable for everyone. One mandatory precaution is to always install security software with firewall and anti-virus protection (which most computers come with; it is also available for purchase at major electronics stores like Best Buy). Also, make sure you use secure and strong passwords on all your accounts and change them every sixty (60) days. Further, always safeguard your social security card and tax records in a secure place (do not carry that information around with you). Another “must do” is to avoid phishing emails, calls, and text messages. (Phishing is the act of sending emails as if you were someone you are not in order to get the person you are communicating with to give your personal information like account passwords or credit card numbers). These forms of communication are used by potential thieves, usually posing as a legitimate representative of an organization like your bank and credit card companies or even the IRS. If you receive a message with a link or downloadable attachment, do not open it unless you are sure that the person sending it is really who they claim to be. Remember, the IRS does not contact taxpayers by email or any other type of electronic communication such as text message nor will they ask for personal or financial information using these mediums. Another way to reduce your risk and make sure you are not being victimized is to monitor your credit report and review your Social Security Administration earnings statement once a year.

Now that you are equipped with the knowledge and tools, you can protect yourself, your business, and your family from tax related identity theft. But how do taxpayers stay on top of the latest trends with this nagging issue? They call their accounting firm for help! We at Mazur & Associates, Certified Public Accountants and Business Advisors are here to guide you should you feel you’ve become a victim of tax-related identity theft. We are available by telephone and email, so please call (732) 936-1230 or email steve@mazurcpas.com to immediately schedule an appointment!

Minimum Wage Increase: Crisis or Blessing?

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Most small businesses are aware of the increase in the minimum wage this past January (2017). Most are also aware that this increase is the first step in a five year plan to increase the minimum wage to $15 dollars an hour. In light of the fact that, according to the Economic Policy Institute, the minimum wage has not provided workers with a “fair and livable wage” since 1968, this wage increase is a positive change. Many workers celebrated this change and continue to celebrate the five-year plan being implemented in 40 states across the country.

However, not everyone is rejoicing. Small business owners are feeling a bit conflicted, and understandably so. However, higher minimum wages could lower the employee turnover rate and keep company morale up. A boost in minimum wage can actually boost business and cash flow.

Although the positive aspects of an increased minimum wage benefits both employers and employees, there are some downsides. A higher minimum wage can also prevent the growth of a business by preventing an owner from hiring the extra personnel needed to expand. And almost all small business trade associations don’t see the need to raise the minimum wage and view it as another cost burden impacting a business’ profitability. It can also force a business to downsize just to stay afloat.

The three (3) states in our region have quite different hourly minimum wage tax requirements. In New Jersey (NJ), the minimum hourly wage is $8.44. In New York (NY) the hourly minimum wage rate is $9.70, while In Pennsylvania (PA), the minimum wage is merely $7.25 per hour.

In addition, the above three states have differing rules amounts withheld from employees for unemployment and disability insurance. New Jersey has the most onerous burden for both employees and employers: in 2017 employees and employers must pay taxes to the Department of Labor for unemployment and disability insurance on wages until they earn $33,500.00. New York State employees have disability taxes withheld on .5% of their wages up to a maximum of $31.20 per year, while employers pay into the unemployment fund until the employee earns $10,900.00. Pennsylvania requires unemployment taxes be withheld from employees at a 0.07% rate with no annual earnings limit while employers remit unemployment tax on the first $9,750 in employee earnings.

So what is a small business owner to do? Businesses have to comply with minimum wage laws after all.

Our advice is for you to be aware of four basic things to help you comply with minimum wage requirements while making sure you are not one of the businesses forced to downsize due to a minimum wage increase in your state.

• You need to know the exact jurisdiction that your business is in so you can comply with the appropriate requirements. Your postal zip code is not always an accurate indicator of jurisdiction, so a little research may be required. Additionally, if you have employees working from multiple locations or working remotely, determining the jurisdiction that they are actually working in becomes increasingly difficult.
• There are different minimum wage requirements based on the size of your business, the employee benefits you offer, your industry type, and the type of work your employees do. As a business owner, you should make an effort to learn what tax breaks you may be eligible for based upon these factors. A good way to stay on top of changing rates and requirements is to sign up to receive alerts for changes and rate rises through your payroll software.
• Having access to exactly how many hours each employee works at any time is helpful when trying to comply with minimum wage and overtime requirements, whether your employee is salary or hourly based. Ensure that you have this information available at all times.
• If you pay employees in a particular city, the local council can call meeting and change the minimum wage rate at any time. And State Departments of Labor or Revenue may introduce minimum wage increases, although these changes generally take more time to implement. A great example of a change was the requirement for New York State employers to withhold Paid Family Leave (PFT) from employees effective on July 1, 2017!

It is imperative to be aware of these changes as they are rapid, sudden, and not always communicated throughout the community. We recommend that you get on the email list for your local or state Department of Revenue or Taxation in an attempt to remain informed on any changes regarding minimum wage or new withholding tax requirements.

But how do most business owners stay on top of their business AND remain informed about the constantly changing minimum wage requirements?—They call their accountants for help! We at Mazur & Associates are here to help you make sure that the minimum wage increase doesn’t cause your business to downsize and experience financial hardship. We are available via telephone and email. Call (732) 936-1230 or email steve@mazurcpas.com and set up an appointment today! www.MazurCPAs.com

 

Trends That Will Impact Your Business in the Near Future

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Recently Mazur & Associates had two of our staff members attend the Annual NJCPA Convention in Atlantic City from June 15th -16th, 2017. Our CPA’s came back to our office saying that one of the most informational and timely sessions they participated in was conducted by Mr. Gene Marks about how technology, the millennial generation, and the Trump Administration are going to effect the cash flow of small businesses.

A bit of background on Gene Marks: He is a columnist, author, and small business owner. Gene also earned his Certified Public Accountant credential and once worked at KPMG as a senior manager. He writes for numerous publications including the Washington Post, Forbes Magazine, and Huffington Post website. He has written five books on business management and has been featured as a keynote speaker on multiple occasions. He also owns Mark Group PC, a technology consulting firm geared towards small and medium sized businesses.

At the conference, our staff members heard Mr. Marks speak about keeping an eye on technology, tax changes under the Trump Administration, and attracting millennials to your workplace.

On technology: Mr. Marks stressed that keeping up to date with human resource campaigns and platforms is imperative for a small business. He suggested using accounts payable automation and making sure you back up your information in the could using up to date systems and software. “The smart business leaders are thinking about 2018 and 2019 right now,” Mr. Marks stated.

On the Trump Administration: In order to prepare for any tax-related changes made by the new administration, Marks suggested that companies make sure they are being paid the proper amounts on time by looking through and managing their accounts receivable ledgers. Another tip given was that, to save money, companies should take a look at the research and development tax credit again.

On millennials: Marks gave a few statistics on millennials that may come as a shock to some business owners.
• Millennials represent about half of the workforce in the United States, which means statistically, a large portion of your potential workforce will be from this generation. In order to build your staff, you will need to know how to attract and accommodate them as employees.
• 72% of millennials look for jobs that offer flexible work schedules and 68% look for work from home options. Firms that offer perks and amenities such as educational opportunities, generous paid time off and good healthcare benefits are the most competitive when it comes to attracting millennials.
• Two thirds (2/3) of millennials prefer socially conscious organizations in the workplace and rank independence/flexibility over compensation. This generation is considered to be the most tech savvy generation ever, with the largest percent of immigrants since the early 1900’s. Keeping up to date on both social progression and technological advancement will be key components for businesses targeting the millennial market.
• Millennials seem to be very focused on healthcare benefits; it is their top requested benefit. Marks suggests that a level funded healthcare plan (a hybrid plan with both group insurance and self-insurance) may be a good fit for both businesses and potential millennial employees. He also notes that health saving accounts (HSAs) are growing in popularity, making that another option to consider when revising and potentially revising one’s employee benefit plan.

– MazurCPAs.com

Tax Advantaged Savings Accounts for Medical Expenses

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One of the most important things in life is maintaining proper health care, but this comes with many costs. To make these health care costs less of a burden on taxpayers, Congress has designed many tax-favorable programs.

Health Savings Accounts (HSAs)
An HSA is a U.S. trust or custodial account set up for the exclusive purpose of paying the account beneficiary’s qualified medical expenses. Only eligible individuals can set up HSAs, which is determined on a month-by-month basis. You are deemed an eligible individual for a month if:
•    You are covered under a high-deductible health plan (HDHP) on the first day of that month;
•    Are not also covered by any other health plan that is not an HDHP;
•    Are not entitled to benefits under Medicare
•    Cannot be claimed as a dependent on another person’s tax return.

The maximum amount that an eligible individual can contribute to an HSA for the tax year is equal to the sum of the monthly limits for all the months during the tax year that the individual is deemed eligible. The monthly limit is 1/12 of the annual limit (subject to inflation). For 2016, the annual limits are:
•    $3,350 for self-only coverage ($279.16/month)
•    $6,750 for family coverage ($562.50/month)
•    If you are age 55 and older by the end of the year, you can make an additional “catch up contribution” of up to $1,000 a year.

You (the eligible taxpayer), or any other person on your behalf (including family members and employers) can contribute to an HSA. Other than employer contributions, all contributions made are deductible on your tax return, depending on whether or not you itemize deductions. Distributions from HSAs that are used to pay qualified medical expenses are not taxed.

Other Tax Favorable Programs

•    Medical Savings Accounts (MSAs), including Archer MSAs and Medicare Advantage MSAs. Archer MSAs may receive contributions from both you and your employers, but not both in the same year. Contributions are deductible, depending on whether or not you itemize deductions. Employer contributions to an Archer MSA are not included in income. Distributions from an Archer MSA that are used to pay for qualified medical expenses are not taxed.

•    Health Flexible Spending Arrangements (FSAs): Both eligible individuals and employers can contribute to an FSA. They are not includible in income, and reimbursements from FSAs that are used to pay for qualified medical expenses are not taxed.

•    Health Reimbursement Arrangements (HRAs): these are limited to receiving contributions from an employer only. They are not includible in income, and reimbursements from HRAs that are used to pay for qualified medical expenses are not taxed.

We at Mazur & Associates CPAs have the expertise and knowledge to help you decide on the type of medical expense savings account that best fits your situation.  Please don’t hesitate to call us with any questions, or schedule a face to face meeting at our office. Our phone number is (732) 936-1230.

Choosing a Business Entity Type that Suits Your Needs

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Mazur & Associates: Choosing a Business Entity Type that Suits Your Needs.

Whether or not you have been in business for 20 years or you have just formed a business, you may benefit from reviewing the various forms of business to make sure that your current structure meets your needs from both a non-tax and tax point of view. There are several forms of businesses, and each of them have different tax implications. They are as follows:

Corporations and S Corporations

Corporations:

• Taxable Income
When determining income taxes due on its taxable income, corporations (excluding S corporations) use the following schedule:

• Dividends Paid to Shareholders
When corporate income is distributed to shareholders as dividends, the corporation receives no deductions for the payments, and the income is taxed again to the shareholders, although this comes with some advantages:
• Individual shareholders have a relatively low tax rate (at most 20%) on qualified dividends
• A corporation may deduct reasonable amounts of compensation paid to shareholders employed by the company. By paying out corporate earnings in the form of tax-deductible compensation, double taxation of the earnings is avoided.
• Leasing business property or equipment to your corporation is another way to draw out corporate earnings. Your corporation deducts the rent expense, and you declare the rent as income.

Corporations may receive an “accumulated earnings penalty” if it keeps more earnings and profits necessary to meet reasonable requirements. The penalty is equal up to 20% of accumulated taxable income, and is designed to encourage corporations to pay taxable dividends to shareholders.

• Alternative Minimum Tax (AMT)
Regular corporations may be subject to the alternative minimum tax (AMT), unless they are qualified as a “small” corporation. A small corporation has average annual gross receipts for all three-year periods beginning after 1993 and ending before the current year of no more than $7.5 million.

S Corporations:
S Corporations do not pay corporate income taxes at the federal level. The S corporation’s income, losses, deductions, and credits are passed through to its shareholders to be included on their tax returns. This avoids double taxation, as the corporate income is only taxed once to its shareholders.

Limited Liability Company (LLC)
LLCs typically have one owner or have several co-owners, known as “members”. The LLC’s income generally is taxed to the owners individually, and a Limited Liability Company has more freedom in allocating income and deductions among the owners than an S corporation.

Partnership
Partnerships have more than owner and do not pay federal income taxes at the entity level, but still have to file an annual informational return with the IRS (Form 1065). The partnership agreement addresses how business profits and losses will be divided among the partners.

Sole Proprietorship
Sole proprietors report their business income and expenses on Schedule C, which is an attachment to the individual income tax return. Net earnings from the business are taxed directly to the owner. To minimize self-employment taxes, plan to take as many deductions as possible on Schedule C.

Determining which business type fits your current needs requires a thorough and thoughtful analysis, which is something we at Mazur & Associates can provide to you. Reach out to us to with any questions or schedule a face to face meeting at our office. Our phone number is (732) 936-1230.

IRS Warns Taxpayers to Stay Alert in Light of Recent Tax Scams

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The Internal Revenue Service (IRS) is warning taxpayers to stay alert against an increase of IRS impersonation scams. These scams can come from automated calls and other new tactics. The scammers will usually call and demand tax payments for iTunes and other types of gift cards.

The IRS has seen an increase in “robo-calls” where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their “tax bill.” These fake calls generally claim to be the last warning before legal action is taken. Once the victim calls back, the scammers may threaten to arrest, deport or revoke the driver’s license of the victim if they don’t agree to pay.

“It used to be that most of these bogus calls would come from a live-person. Scammers are evolving and using more and more automated calls in an effort to reach the largest number of victims possible,” said IRS Commissioner John Koskinen. “Taxpayers should remain alert for this summer surge of phone scams, and watch for clear warning signs as these scammers change tactics.”

In the latest trend, IRS impersonators are demanding payments on iTunes and other gift cards. The IRS reminds taxpayers that any request to settle a tax bill by putting money on any form of gift card is a clear indication of a scam.

Some examples of the varied tactics seen in 2016 are:
•    Demanding payment for a “Federal Student Tax.” .
•    Demanding immediate tax payment for taxes owed on an iTunes or other type of gift card
•    Soliciting W-2 information from payroll and human resources professionals.
•    “Verifying” tax return information over the phone.
•    Pretending to be from the tax preparation industry.

With the revelation of this tax scam, it is important for taxpayers to not forget any past scams and to always stay alert for potential fraudulent incidents. In 2015, there was another tax scam that the IRS warned taxpayers about, and this was the impersonation of charitable organizations. The IRS suggested that taxpayers use the tools on irs.gov to check out the status of charitable organizations before they donate, be wary of charities with names that are similar to familiar or nationally known organizations, and to not give or send any cash, always contribute by ways that will provide documentation of the gift (such as check or credit card). Taxpayers should also be alert of scams after any natural disasters, because it is common for scam artists to impersonate charities to get money or private information from taxpayers.

Since these scams can take many forms and scammers are constantly changing their strategies, knowing the telltale signs is the best way to avoid becoming a victim.

The IRS will never:
•    Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
•    Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
•    Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
•    Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card or wire transfer.
•    Ask for credit or debit card numbers over the phone.
If you get a phone call from someone claiming to be from the IRS and asking for money and you don’t owe taxes, here’s what you should do:
•    Do not give out any information. Hang up immediately.
•    Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.
•    Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
•    If you think you might owe taxes, call the IRS directly at 800-829-1040.

If you think you have been the victim of an IRS scam, do not hesitate to call Mazur & Associates CPAs at 732-936-1230, and we will help you through your problem from start to finish.