How to Keep Your Records Safe in Case Disaster Strikes

It is always a good idea to have a plan for what to do if and when disaster strikes. A disaster recovery plan is especially important when it comes to keeping your tax and financial records safe. The Internal Revenue Service provides taxpayers with some basic steps to take now to be prepared in case of emergency:

1.      Backup Records Electronically. Ask for your bank statements to be emailed rather than mailed, and scan tax records and insurance policies into an electronic format. Always remember to backup these files and keep them in a safe place.

2.      Document Your Valuables. Take photos or videos of the contents of your home and/or business. Visual records can help prove the value of lost items. They will also help with insurance claims or casualty loss deductions on your tax return. Store these pictures or videos with a friend or relative who lives away from the area.

3.      Update Emergency Plans. Review your family’s emergency plan every year, and update when changes are needed.

4.      Get Copies of Tax Returns or Transcripts. Visit IRS.gov to obtain a copy of Form 4506, the Request for Copy of Tax Return, to replace lost or destroyed tax returns.

Do you have a disaster plan for your important records? Let us know in the comments below.

New IRS Pay System

The Internal Revenue Service recently announced their new web-based payment system-IRS Direct Pay- on their website. IRS Direct Pay allows taxpayers to pay their tax bills or make estimated payments directly from checking or savings accounts without any fees or pre-registrations. Taxpayers will receive instant confirmation that their payment has been submitted, and bank information is not retained in the system after payments are made. To pay online using Direct Pay, taxpayers follow five easy steps: provide tax information, verify identity, enter payment information, review and electronically sign the transaction, and print of record your online confirmation number. Direct Pay also offers 30-day advance payment scheduling, payment rescheduling, or cancellations, and a payment status search. If you have any questions about your tax payment options, please contact us!

Federal Workers Owe IRS $3.3 Billion

The Internal Revenue Service has released data that shows roughly 3.3% of federal employees and retirees owed $3.3 billion in unpaid taxes of September 30^th, 2013. Federal employees and retirees either could not pay the full amount owed with a return, or the Internal Revenue Service conducted an audit and discovered that more is owed than was paid. The data, released after USA Today requested the information under the Freedom of Information Act, broke down delinquency rates by departments and independent agencies. At the low end of the scale was the Treasury Department, which had a 1.2% non-compliance rate. The government departments with the highest non-compliance rates were the Department of Housing and Urban Development (5.29%), the Department of Veterans Affairs (4.28) and the Army (4.28). The article from CNN Money is linked here.

Seattle Approves Highest Minimum Wage Increase in the Country

On June 2^nd, Seattle’s city council unanimously approved an increase to the city’s minimum wage that would bring the wage to $15 an hour. This wage is the highest minimum wage in the nation by far. Washington has the nation’s highest state-level minimum, which is $9.32. The federal minimum wage is only $7.25. Seattle’s wage increase will take place over the next several years, based on a scale that considers the size of and benefits offered by an employer. The increase will apply first to large businesses in 2017, and then spread to all businesses by 2021. Many states and cities are following the relatively new trend of raising minimum wage. Most recently, Michigan raised the hourly minimum wage to $9.25, and many states have passed or are considering proposals to adopt a $10.10 minimum wage.

The Best and Worst Small Business Credit Cards

In 2009, Congress passed consumer-friendly reforms with the Credit Card Act, which included banning bait-and-switch pricing, exorbitant interest rates, and other shady practices. Unfortunately, small business credit cards were not included in the act’s reform measures. Because small business credit cards are not exempt from rising interest rates and shady practices, it is very important that business owners choose carefully when selecting a credit card. CardHub has created a list of the best and worst credit cards for small businesses, based on the protections the companies offer that are similar to the Credit Card Act of 2009.

The top three credit cards for small businesses that score over 50% of the Credit Card Act protections are:

1.      Bank of America (100%)

2.      American Express (60%)

3.      Capital One (60%)

Other credit cards that had 50% protection or lower are listed below:

4.      Chase (45%)

5.      CitiBank (30%)

6.      Discover (30%)

7.      U.S. Bank (30%)

8.   Wells Fargo (30%)

6 Factors for Deciding Whether or Not to Pay Interns

Are you planning on hiring interns this summer? Many companies hire interns as “volunteers” without payment, or pay interns less than the minimum wage. But the fact is that internships are most often considered employment, and can be subject to the federal minimum wage and overtime rules. Under the Fair Labor Standards Act, interns in the for-profit sector who qualify as employees must be paid at least $7.25 per hour, and not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek.

There are certain cases in which an individual involved in an internship or training program may do so without receiving compensation. The United States Department of Labor uses the criteria outlined below to determine whether or not an intern must be paid. If all of the factors listed below are met, the Fair Labor Standards Act does not apply to the intern, and therefore the interns are not required to receive compensation.

1.      The internship is similar to training which would be given in an educational environment.

2.      The internship experience is for the benefit of the intern.

3.      The intern does not displace regular employees, and works under close supervision of existing staff.

4.      The employer that provides the training derives no immediate advantage from the activities of the intern.

5.      The intern is not necessarily entitled to a job at the conclusion of the internship.

6.      The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you have any questions, please let us know!

Health Savings Accounts Contribution Limits Raised for 2015

The Internal Revenue Service has increased the annual limitation on deductions for Health Savings Accounts (HSA) for 2015 according to an announcement made in April. The increase will raise the individual contribution limits to high deductible health plans to $3,350, and the limit for family coverage in a high deductible plan to $6,550. The Internal Revenue Service defines high deductible health plans as a “plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expense do not exceed $6,450 and $12,900 for individuals and families, respectively”. This increase is effective as of calendar year 2015.