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.

Nearing Retirement? Time to Fortify Your Finances

Your financial goals for retirement can seem far off, but follow the steps below and you will be able to achieve them:

1.      Save More: Tax-free growth is a sure-fire way to boost wealth. Contribute to Health Savings Accounts, which can be used as a long-term savings plan for retirement as well as for storing money for medical expenses. Experts also recommend paying for things with cash or checks, as that causes you to realize how much money you actually have. Contribute to your savings account every month.

2.      Bring Joy Back to Investing: Invest in stocks that you have actual interest in with extra money, and watch your investments grow. CNN Money recommends investing in LinkedIn, Skyworks, and Walt Disney.

3.      Make Your Home an Asset: Purchase a modest home at the lower end of your range. Over 30 years, this decision can save you six figures. You would save $162,000 by buying a $300,000 house instead of a $375,000 house, if you put $75,000 down and take out a 30-year mortgage with 4.4% interest. Also, consider renting out a property if you can do so. The average monthly rent in the United States is $1,089, versus the average monthly mortgage which is $900.

4.      Invest Against the Grain: Invest in slower economies to reap bigger gains, and boost your stake in undervalued small-company shares (which have historically outperformed).

5.      Use Funds to Tap High Municipal Yields: According to CNN Money, “Tax-exempt municipal bonds now offer a yield of more than 2% for intermediate-maturity issues, versus and after-tax equivalent of about 1.5% for regular bonds”.

6.      Cut the Cost of College: Cut your college student’s cost of living by considering co-ops rather than dorm rooms, pick a less selective school to get more aid, and invest in 529 savings plans for children.

7.      Boost Your Income: Know the income you will have at your disposal come retirement time. CNN Money notes that 35% of 401(k) investors who become aware of their income after retirement change their savings habits, and three-quarters of those people boost their savings an average of 25%.

For the full article from CNN Money, follow this link.

US Unemployment Drops to 6.3%, Lowest in 5 ½ Years

 

The unemployment rate dropped to 6.3% this month, which is the lowest the rate has been in 5-1/2 years. In March, the unemployment rate was 6.7%. In April of this year, employers added 288,000 workers to their payrolls, which was more than expected and positively contributed to the rate decrease. The job gains in April were the highest since January of 2012. Another attributing factor to the rate decrease is the number of people working or looking for work dropped sharply. Those who are not actively looking for work are not considered unemployed. The hiring that occurred in April was broad-based and included higher-paying jobs, such as manufacturing (12,000 new positions), construction (32,000 new positions), and professional and technical services, such as accounting and engineering (25,100 new positions).

http://www.nbcnews.com/business/economy/job-market-heats-april-unemployment-rate-drops-6-3-n95431

NCDOR Reminds Taxpayers of Use Tax Obligations

The North Carolina Department of Revenue has issued reminders to taxpayers of certain use tax obligations on remote sales. North Carolina use tax is due by individuals and businesses on tangible personal property and certain digital property purchased, leased, or rented inside or outside the state for storage, use, or consumption in North Carolina. Use tax is also due on taxable services sourced to North Carolina. Each and every taxpayer has an obligation to pay use tax. Even if a retailer does not collect tax, consumers are still required to report and pay the use tax. The use tax is calculated at the same rate as the sales tax. If you have any questions about sales and use tax, please contact us!

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Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).