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Upcoming Tax Dates & More!

TAX DATES : January 31

Businesses provide Forms W-2 and most 1099s to employees and other payees.

File Forms W-2 and 1099-Misc Reporting non employee compensation in box 7 with the SSA and IRS, respectively.

Employers file form 941 for fourth quarter or For 944 for 2017.

Employers file form 940 for 2017

Farm Employers file Form 943 for 2017.

File Form 945 to report income tax withheld for 2017 on all non payroll items, including backup
withholding and withholding on pensions, annuities, IRAs, and gambling winnings.

Note: Forms 940, 941, 943, 944, and 945 are each due February 12 if respective taxes are deposited in full and on time.

Applicable large employers (ALEs) provide Form 1095-C to employees; all other providers provide Form 1095-B to covered individuals.

SOCIAL SECURITY TAXABLE WAGE BASE FOR 2018

On October 13, 2017, the Social Security Administration (SSA) announced that the maximum earnings subject to the social security component of the FICA tax would increase from $127,200 to $128,700 for 2018.

Please contact us if you have any questions about the information in this article.

 

New York States Paid Family Leave Program

Starting January 1, 2018, the New York State Paid Family Leave Program will provide New Yorkers job-protected, paid leave to bond with a new child, care for a loved one with a serious health condition or to help relieve family pressures when someone is called to active military service.

 

This premium for this insurance will be paid by employees rather than employers and will be withheld through payroll withholding with a maximum of 1.65$ per week.

For Employees:

Paid Family Leave starts January 1, 2018 and phases in over four years:

2018: 8 weeks 2019-2020: 10 weeks 2021: 12 weeks

 

General rule of thumb: Employees covered by DBL (NY’s statutory disability insurance) now you will automatically get PFL starting next year.

Here’s what it takes to be eligible to go out on paid leave:

You must make it through what’s called a qualification period.

  • If you work 20 or more hours per week, you must have been employed at least 26 consecutive weeks at your current employer.
  • If you work less than 20 hours a week, you must have completed at least 175 work days at your current employer.
  • If you change jobs your time worked at the previous employer does not count. In other words you start over with a new qualification period.
  • Time out on DBL (statutory disability insurance) does not count towards your qualification period.

 

Qualified types of care include: Physical care, emotional support, visitation, assistance in treatment, transportation, arranging for a change in care, assistance with essential daily living matters, personal attendant services, traveling to pick up medication.

 

For Employers:

 

As of July 1, 2017 you can begin withholding premiums of up to $1.65/week and your current NY Statutory Disability Insurance Policy will automatically include coverage beginning on January 1, 2018.

 

Questions? Check the website here : ny.gov/programs/new-york-state-paid-family-leave

New IRS & NYS Requirements

In order to reign in tax fraud new procedures have been imposed on taxpayers and tax professionals. Please understand that the CPA community was informed late in the process nor did they participate in the drafting of these new procedures. They are:

– IRS requires certain questions be answered in order to receive the following tax credits: Earned income credit, Child tax credits and education credits.

– New York State now requires authentication of the taxpayer by providing their drivers license’s document number, identification number, issuance date, expiration, and state of issuance or a state identification card if they do not have a valid drivers license.

Phishing: Are you the next target?

A client of ours contacted us regarding a suspicious phone call she had received. A woman claiming she was from the IRS told our client she owed the federal government money for tax payments she hadn’t payed. What makes this case especially interesting? Our client happens to be a foreign national, and was threatened with possible deportation from the Country if she didn’t pay the amount owed to the federal government.

We’ve seen these scammers target certain demographics most vulnerable to these types of tactics, and in todays world, personal information such as your address, name, social security number are going to be the pieces of information that these scammers are going to try and use to convince you of who they are. REMINDER: The IRS will NEVER call or email you, always and only through written correspondence should you owe them any sort of payment.

Should you receive one of these calls, and you are being spoken to in a threatening manner, take down their number & hang up. To help the proper authorities deal with these scammers please click the link below to report the incident. https://www.irs.gov/uac/report-phishing

Thinking of Divorce? Here’s some Advice:

Untangling the affairs of a failed marriage is full of financial & tax pitfalls. It is prudent to speak to an impartial professional before either party engages in the service of an attorney. The major items of concern are whether divorce is the only option, what do both parties really want?

8 Important things to consider when going through this process:

•Timing of the divorce

•Payment of Alimony

•Custody if minor children & child support

•Property Settlement

•Health Insurance

•Qualified Retirement plans & IRA

•Business Interests

•Filing of back, current and future tax returns

Attention to tax and financial issues helps the parties involved create certainty and avoid problems later on.

Department of Labor and Issuing Forms 1099: Cause for concern

The IRS is referring to the US and NYS Departments of Labor taxpayers who were issued a single Form 1099Misc that was reported on their Form 1040 Schedule C and who had not been issued a Form W-2 and reported no wages on line 7 of their Form 1040.

To summarize the situation in laymen’s terms, the IRS is informing the US and NYS Departments of Labor which individuals earned all their income from one company as an independent contractor to look into whether they should be reclassified as an employee.  Receiving as single Form 1099 and having no other source of earned income is a strong indication that the worker maybe an employee and not an independent contractor.

The department of labor will be using this information to determine which companies they need to audit. If your company is audited and they determine that the workers should be reclassified as employees, as an owner of your company you will be personally liable for the payroll taxes due plus penalties and interest.

Please be aware that there are many factors that determine whether or not a payee who has performed work for a company should be classified as an independent contractor (IC) versus an employee. The most important factor is a written contract between a business and a contractor. If you do not have a contract you will have a very difficult time defending your practices in an audit.

In order to determine how you should proceed it is our recommendation that a law firm that specializes in labor law be retained to perform a “self-audit”. As part of a self-audit, they will review your company’s contract with your IC’s and the actual procedures that are followed. For many firms the conditions set in an IC’s contract and what actually occurs are quite different. If that is the case you stand a great chance of losing if and when the Department of Labor audits you.

Hackers: One step further

The efforts of hackers have gone one step further, like a biological evolution, they continue to find ways to steal personal information. A computer virus doesn’t necessarily infect your computer from opening an infected email, or clicking on an advertisement on a website. What some hackers are doing now is they go into your web browser, check to see if you have any bookmarks for your personal banking, etc. then redirecting the link to a site that mimics the website you are trying to access. When you type in your information you are giving them the keys to your account.

You are left vulnerable to simply giving away your personal passwords, emails and other private information to hackers without you noticing. We know all too well what this can do to a business, as one of our clients experienced such a hack and was left with their assets stolen or frozen. In an age where we are starting to live our lives with the internet as an integral part of our sense of communication with the rest of the world, private information faces an all too real danger.

And not just from individual hackers anymore, there are now organized cybercriminal gangs, government surveillance, as well as hacks from nation states. As cited by noted tech guru Dan Kaminsky in his Black Hat Keynote speech, a study by the National Telecommunications and Information Administration indicates that “Half of all Americans are backing away from the net due to fears regarding security and privacy”.

Our advice: remove all current bookmarks on your web browser that link to any online banking sites, or any other site that requires personal username IDs or passwords. It may require that you input the site’s url, but it is better to be safe than sorry.

Your Most Trusted Advisors

Yesterday a client made me realize how much a CPA needs to know and is responsible for. She graciously said that you need to be a special person to do the kind of work that we do.

I came to realize that Marvin and I have both been working in the field of accounting for better than 30 years and have accumulated plenty of useful and not so useful knowledge over the years.

Everyone needs to take advantage of the build up knowledge that their CPA possesses. They have just about seen it all, and they are your most trusted advisor. As we stated in our previous blog, the first person that needs to be advised if you are contemplating a divorce is your CPA. You will also need a CPA’s advice when it comes to business and investment planning, estate planning and elder care issues to name a few.

If you have any of the above issues, please feel free to give us a ring or drop us a note.

Brexit Reactions

Stock Markets around the world have been hit hard, but what should an individual investor do?

We like to follow Warren Buffet’s Strategy which is to invest in Quality Stocks and be in the market for the long haul.

The Doomsday-sayers have it wrong, while the markets are still down as a reaction to the passage of the UK’s referendum to leave the European Union. A nice rebound occurred over the last two days, those who panicked and sold out have been the big losers.

A well balanced portfolio containing blue chip common and preferred stocks mixed in with some alternate investments such as REITS and stock and commodity ETF’s is the best defense in a time of high volatility. Be certain that your portfolio contains defensive(i.e. Consumer Staples) and utility stocks. If all else fails you will still be getting a nice return from their dividends.

Remember, take a deep breathe, don’t panic and always think about the long term.