New Form NC-4 EZs or NC-4s

A new law was recently enacted by the North Carolina General Assembly, and will go into effect January 1, 2014. Under House Bill 998, taxpayers can no longer claim a personal exemption for themselves, their children, their spouse, or any other qualifying dependents. Also, many tax credits and deductions that have an impact on North Carolina Withholding tax are no longer available, effective January 1^st. Because of this new law, employers must have employees submit new Employee’s Withholding Allowance Certificate (Form NC-4 EZ or Form NC-4). Recipients of pension or annuity payments must complete and provide to their payer a new Withholding Certificate for Pension or Annuity Payments (Form NC-4P).  The North Carolina Department of Revenue will notify employers and pension payers of the new law requirements by mail.

If you have any questions, please contact us. You can also contact the North Carolina Department of Revenue directly through a help number: 1-877-252-4487 (this phone number will only be available until February 28, 2014).

 

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

How to Avoid Fraud in the Workplace

International Fraud Awareness Week (November 3-9) relayed the importance of awareness, detection and prevention in regards to fraud. For International Fraud Awareness Week, the CPA Practice Advisor recently posted an article regarding how to avoid fraud in the workplace. In that article, the Association of Certified Fraud Examiners listed the top 5 tips that will help employers detect and prevent fraud:

1. Be proactive: Adopt a code of ethics for employees and management that must be followed, and make it known that unethical behavior will not be tolerated.
2. Establish hiring procedures: Every company should have formal employment guidelines that are strictly followed. Conduct thorough background checks and take ethical compliance into consideration during performance reviews.
3. Train employees: All employees should be trained in fraud prevention. Employees should know how to report suspicious activity and understand the warning signs of fraud.
4. Conduct regular audits: Surprise audits are the most effective and should be done routinely, especially in financial and inventory departments.
5. Call an expert: If fraud examination is not practiced by your business, hire an expert to conduct regular examinations.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

The New Minimum Wage

 

The current federal minimum wage is $7.25 an hour, but that number could be increasing soon. Last Thursday, the President announced his support of legislation that would increase the federal minimum wage from $7.25 to $10.10. According to the Huffington Post, the “federal minimum wage is actually worth $2 less today than it was in 1968”. As the cost of living goes up, minimum wage follows suit. The last minimum wage increase occurred on July 24, 2009, when minimum wage was increased from $6.55 to $7.25 an hour.

Some states have already begun the process of increasing minimum wage.  New York and Connecticut have approved measures that would increase the minimum wage to $9 an hour and organizers in South Dakota, Massachusetts and Idaho are working to get the same wage increase on their ballots for voting in 2014. California lawmakers have approved an increase of minimum wage to $10, which will take effect by 2016, and New Jersey residents have voted to raise minimum wage to $8.25 an hour. The CNN Money website reports that “as of January, New Jersey will join 19 other states and Washington, D.C., in having minimum wages that exceed the federal level”.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

Fewer Americans Expecting to Retire

USA Today recently posted an article regarding a study that shows 37% of people do not expect to ever retire. These findings come from a survey done by Wells Fargo. Survey respondents said that “paying monthly bills is their highest priority, and saving for retirement is a distant second”. On a good note, half of the survey respondents reported that they will have enough money to retire, which relays the importance of developing a retirement account as early as possible. But experts say it is never too late to start saving for retirement. To get a jumpstart on planning for retirement, open a savings account immediately and start depositing funds routinely. Try to cut your current expenses and utilize as many tax efficient retirement plans as possible (401k, Roth IRA’s, Traditional IRA’s). When it comes to planning for retirement, earlier is better, but it is never too late. If you have questions about planning for retirement, contact us!

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

Flexible Spending Accounts Rules Changing

Workers who have health flexible spending accounts will be getting some good news! The United States Treasury Department has announced that it will be relaxing the rule that says account holders must use up their funds by the end of the year, or the funds will be lost. Employers now have the option to allow employees who participate in these health flexible spending accounts to carry over up to $500 to the next year. Health flexible spending accounts, commonly known as FSAs or HSAs, are accounts that hold pre-tax dollars to pay for out-of-pocket medical expenses. Roughly 14 million families use flexible spending accounts already, and these changes may encourage even more workers to sign up for these plans. Employers may implement these changes in their company as early as the 2013 plan year.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS to Delay Start of Tax Season

The Internal Revenue Service has announced that the beginning of tax season could be delayed by up to two weeks, due to the government shutdown. Accounting Today notes that the "16-day government shutdown came during the peak period for preparing IRS systems for the upcoming tax season, which involves programming, testing and deployment of more than 50 systems" (Accounting Today). Considering that the government shutdown closed about 90% of the Internal Revenue Service's operations for 16 days, the delay is not a surprise. The Internal Revenue Service will announce the official start of the preparation for the upcoming tax season in December. This delay will not affect when tax returns are due. Taxpayers will still be required to file their returns by April 15th, and companies will still be required to send W-2 and other tax forms by January 31st.

If you have any questions, please contact us.

 

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

2013 Payroll Adjustments Required for Noncash Fringe Benefits

 It is now time to calculate noncash fringe benefits and other amounts which must be added to 2013 payroll prior to year end. This can be done now; you need not wait until the end of the year. We are available to help you with the computations, and can also assist you in getting the information into your payroll system or correctly reporting it to your third party payroll processing service.

 

Generally, noncash fringe benefits paid during the calendar year are added to the last payroll of the year. We understand how busy December is, and the difficulty of accumulating information through the end of the year in time to have us do the calculations and then get it into your last payroll run.  To alleviate this pressure, IRS rules allow you to cut off your calculation as early as October 31st. By acting now, you can gather the information, get it to us, have your computations back, and then decide in which of the remaining payrolls of the year you want to include noncash fringe benefits.

 

If you have questions or would like assistance with calculations or payroll processing related to fringe benefits, please call us now. At the latest, we must calculate your fringe benefits before your last payroll in December.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com