Get Organized! W-9 2019

Here is the 2019 W-9 for GO!.

Click here for a full size version you can save.

We are an Scorp so we should not receive a 1099 form your company.

Thank you!

Felonies, Background Checks & Hiring

A few years back an EECO law was put in place regarding pre-employment inquiries about arrest and convictions. To summarize the law, you can no longer have a check box on your company’s employment application that asks about felony convictions. The reason for the law is that this practice causes a “significant disadvantage” to individuals based on ethnicity and race. To put it bluntly people with black and brown skin are arrested and convicted disproportionately more compared to people with white skin.

So you are probably thinking “But Jackie, we cannot have convicted rapists in our clients home.” Per the EEOC, up front criminal history screening “do not help employer accurately decide if the person is likely to be responsible, reliable, or safe employee.” So to ensure your company does not have practices that discriminate against protected classes you should:

  1. Not have a upfront screening process like the ‘Have You Been Convicted of a Felony’ check box that make an applicant ineligible for employment before being interviewed.
  2. Once you are ready to offer an applicant the job, get their permission to run a background check.
  3. It is helpful to have a 3rd party handle the background check so you and your employees do not find out about history that is not relevant to employment at your company.
  4. Do not google. Mugshots and arrest records are “not proof that (the applicant) engaged in criminal activity.”
  5. Know your state’s laws regarding background checks because your state may have more strict laws that the EEOC.

For more information on this topic visit the EEOC.

Tax Reform – Meals & Entertainment

Meals & Entertainment Changes

GO! does not give tax advice but we will share what we learned at QBConnect.

Always check with your CPA for tax advice since there are so many grey zones and your CPA is the person that will need to deal with the IRS if there is an audit.

Entertainment

No longer deductible so those country club dues, golf outings and baseball games can no longer be deducted on your taxes says Intuit’s Jim Buffington, CPA.

The IRS is doing a good job of clarifying this change (link below) but they are not providing a good summary of changes to meal rules.

Coffee, Food, Meals

In a bizarre, turn of events, coffee and related break room food and drink supplies are now only 50% deductible.

While coffee seems like a staple for an office since the dawn of the office, many companies have gone a bit overboard with meals and snacks kept at the office.

What about coffee and tea for clients that come onsite?

Well, it may be difficult to stop employees from using the supplies and since meals with clients are also 50% deductible, even coffee and tea supplies for onsite client meetings are 50% deductible.

Employee meals were the main focus in the discussion of meals at this training.

Convenience is the magic work for employee meals.  If the meeting is at the convenience of the employer, the meals are 50% deductible.  Think of this as mandatory meetings during the work day.  Note the word mandatory.

Employee Celebrations are still 100% deductible per the QBConnect training.  So if you have a celebration, all employees are invited and attendance is not mandatory it means that this not not at the convenience of the employer, it’s the convenience of the employee.

New Accounts for QuickBooks

The trainers at QB Connect suggest that all meal related accounts are noted with 50% or 100% to clarify account usage to your CPA.

Office Food & Bev 50% – Recode of transactions previously coded to office supplies.

All Staff Celebrations 100% – Rename All Staff Meals and recode all company meeting expenses to a new account.

Meals – 50% Deductible – This now includes all company meeting food, travel meals, and business meeting meals which include meetings with clients.  The rule is at least one employee must be present at the meal.  Remember, the names of all who attended meal, their title and reason for meeting must be written on the receipt.

Entertainment – Non-Deductible – Make sure this account is created as an Other Expense type so it is not included in Net Profit.

The IRS is still not providing very good guidance on this topic which means things are left up to interpretation.  Link to IRS page

 

Markup vs. Margin

For those unfamiliar with accounting terms discussions of markup verses margin may feel a bit daunting.

Some people can do math in their head and easily remember numbers.  For those of you new to these terms or if is hard for you to remember what markup is needed to get the margin you need to stay profitable, here are some tools.

These are the formulas:

Markup % = Gross Profit / Cost
Margin % = Gross Profit / Price

Here is a table of examples assuming the cost of an item is $100.

Cost Markup Gross Profit Price Margin
100 20% 20 120 17%
100 25% 25 125 20%
100 30% 30 130 23%
100 35% 35 135 26%
100 40% 40 140 29%
100 45% 45 145 31%
100 50% 50 150 33%
100 55% 55 155 35%
100 60% 60 160 38%

Here is a link with examples and definitions.

Getting Personal with your Personnel Files

Do you have all your employees files in the right place? The following information applies to Oregon, but it’s very good advice. Be sure to check your state regulations to see if there any differences.

Oregon ORS 652.750 requires employers to allow their employees access to their personnel/pay records upon request. What records are those you might ask? BOLI defines these records as ones “used to determine the employee’s qualifications for employment, promotion, additional compensation, termination or other disciplinary actions.”

Here’s a sample list from BOLI for Personnel Files:

  •          Job announcements
  •          Applications
  •           Resumes
  •          Records of Promotion
  •          Pay increase documentation
  •          Performance reviews
  •           Supervisor notes pertaining to named personnel actions
  •          Disciplinary actions; records of verbal and written warnings
  •          Notices of termination

All I9s should be in separate I9 Binder saved in a secure location. Here is a LINK for more information about how long to retain I9s (remember to audit I9s annually).

Finally, we have the Payroll File, which is also to be kept separate. This includes:

  •        Forms authorizing all deduction of pay
  •       W-4s
  •       Health Benefit and Retirement deductions
  •       And all other reimbursements to the company including purchase reimbursements

If it impacts payroll, there must be a signed document on file.  The only except to this rule is garnishments including child support.  You must have a signed document if you reduce the pay rate for an employee.

As our world becomes increasingly digital it’s important to stay digitally organized. Most of these files are no longer stored in cabinets and it can get messy with multiple devices these days. The good news is you don’t have to leave your desk to begin organizing them. Start today!

Here is a LINK to additional Q and A’s

iWire Directions for 2018

Oregon changed the iWire website and the rule about when you have to submit 1099s

W-2 iWire Filing with QuickBooks

“2013 was the first tax year where the Oregon Department of Revenue had the authority to assess

penalties for non-filing via the iWire system.  The Department is not assessing penalties for 2013 data, because they want to make sure that all businesses are aware of the requirement going forward. For tax year 2014, the Department will begin assessing penalties for non-filers and late filers.” – Oregon Dept of Rev Rep

QuickBooks E-file your State W-2s from QuickBooks article

What you will need:

Any documents needed to check the W-2 information

Third party preparers: Your EIN and contact information

Employers contact information

In QuickBooks:

Employees > Payroll Tax Forms & W-2s > create State W-2 E-file

Continue > Continue >ChooseState(if necessary) > Get QuickBooks Data > OK

Review Data as needed.

In Excel:

Choose Start Interview from QuickBooks Payroll State W-2 toolbar > Check the box > Next > Choose File location > Save > Next > Review Company Information > Next > Enter Submitter Type information (contract bookkeepers – you are a 3rd party) > Enter submitter and Employer contact information > Next > Create W-2 file.

Print directions as needed > OK > Save workbook now? Yes > Choose location and save.

Go to Oregon iWire

Take me to iWire (big blue button on right side) > File W2s and 1099s using iWire > Properly Formatted Text File > Enter Submitter’s contact information.  Do not enter EIN dash > Follow prmpts to upload and EFW2 file > Browse to text (txt) file > Submit.

Print page with confirmation number.

Archive confirmation page, Excel file and txt file.

You will receive an email confirmation as well.

1099 –Wire Filing

Companies that generated ANY TYPE of 1099 must submit information to iWire.  There is no longer a minimum threshold before you have to submit 1099s to iWire.  QuickBooks does not support E-Filing of 1099s to States.  You can add all your 1099 information into a pre-formatted spreadsheet located here.  On the right side bar you will find:

What you will need:

Completed 1099 forms

Third party preparers: Your EIN and contact information

Payer’s BIN, EIN, and contact information

Go to Oregon iWire

Take me to iWire (big blue button on right side) > File W2s and 1099s using iWire > Choose Manual Entry (or Spreadsheet from DOR Template) > Enter submitter’s contact information > Follow prompts to add all 1099 information manually or upload the excel document.

When you have entered all 1099 information, choose Review and Send your submission to the Oregon Department of Revenue > Review information – Compare Summary information with 1096 > Submit.

Print page with confirmation number.

Archive confirmation page.

You will receive an email confirmation as well.

Independent Contractor Tests

It is very important that you classify workers properly.  The mistake of classifying an employee as an independent contractor can be costly.

What is the definition of an Independent Contractor per the IRS?

20FactorTestforIndependentContractors

Here is an example of the type of form your company should have for Vendor On-boarding.

Example Independent Contractor Questionaire

And just for good measure, GO! is considered an Independent Contractor and here is our current W-9.

GO! W9 2017

Mileage and Travel Reimbursements

You cannot deduct commuting costs so make sure you understand what is considered commuting – See the image furnished by the IRS below.

Reimbursements are part of an Accountable Plan which requires:

Business Connection: Proof of business necessity

Substantiation: Original receipts, mileage log, reimbursement request form.

Return of Excess Amounts: Return of unused advances.

IRS Info

Non-Accountable Plans are defined as:

Fixed daily or monthly amounts

No documentation of miles or expenses

Any payment to employee that does not meet the Accountable Plan requirements i.e. is considered a Non-Accountable Plan must be taxed as wages. Employee will need to substantiate and deduct on personal return.

IRS Info

What about per diem?

Considered reimbursement only if employees return an expense report in a reasonable period.

Per Diem FAQs

Remodelers Advantage Summit 2016

Round Table Ice Breaker Handout

Color Style Handout 2

Contingency Planning Handout

EE Contingency Plan Checklist

Contingency Plan Example

Three Questions to Ask Your Subcontractors

1. Who will contact us if you cannot work?

2. Do you have a backup?

3. Will we be invoiced timely in case of your accident or injury?

4 Reasons to Review Your Tax Return

Do you or someone from your accounting team review the tax return each year?

Set of nine different vector check marks or ticks in circles conceptual of confirmation acceptance positive passed voting agreement true or completion of tasks on a list

Your tax return preparer expects you to and with good reason.  In the flurry of tax season, numbers get inverted.  Sometimes an extra zero or two gets added.  And beyond being a second set of eyes for errors, you and your staff know your business much more intimately than your tax preparer.  Did they misunderstand some data you provided?

Top 4 Reasons to Review Your Tax Return

1.  Compare your accounting data to the tax return to locate process changes:

What was reported differently on the return?

Are there things about your accounting system that you could change to save time for your preparer?

Are the numbers different?  If so, why?

2. Helps remind you to enter Journal Entries and Depreciation:

What journal entries did the tax preparer provide?  If none, ask for them.

If there are more than a couple journal entries, what needs to change so adjustments do not need to be made at tax time?

Ensure the depreciation expense is entered in your accounting system

Ask for the current year projected depreciation so you can write off 1/12 each month.

3. A great time to do a Fixed Assets Review:

Ask for the detailed depreciation schedule.

Review it for accuracy.  Are there assets on the books that you disposed of or sold years ago?

Keep a copy of the schedule on hand to note assets that are disposed of or sold in the current year.

4. Save time during next tax season by Locking the Period:

Did you lock the period after providing information to your preparer?

If not, users may have added or removed transactions from the prior year.

Are the numbers on the tax return different than what you have in your accounting system now?

If so, locate what has been changed, change it back as of 12/31 and then make the necessary change as of 1/1.

Then ensure you lock the books so changes cannot be made.