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Do You Live or Work in Kansas?

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If so, the recent changes WILL AFFECT YOU!

WHAT YOU NEED TO KNOW:

  • These changes are retroactive and apply starting January 1, 2017.
  • Business and rental income (Sole Proprietors, S Corporation and Partnership owners) which was previously exempt from Kansas tax is once again taxable.
  • Increase in tax rates for 2017.  The highest rate will be 5.2% for those with Kansas income in excess of $60,000.  These rates will increase again in 2018 to a high of 5.7%.
  • No taxpayer penalties or interest will be charged for underpayment of taxes due to this change in law as long as the underpayment is paid by April 17, 2018.
  • Limitations on itemized deductions will ease but not in 2017.  Starting in 2018 a portion of medical expense will be allowed and mortgage interest and property tax deductions will phase back in.
  • For W-2 employees, Kansas withholding tax rates were updated on July 1, 2017.  These rates have been updated for the remainder of 2017 at the higher 2018 rates to compensate for the first 6 months of withholding at lower rates.   However, some employees may still not have enough tax withheld for the year.

WHAT STEPS TO TAKE:

  • Consider making higher KS estimated tax payments to avoid a large Kansas tax bill at April 17, 2018.
  • Consider having extra Kansas tax withheld from your paycheck.
  • Contact us to prepare a projection of the Kansas tax you may owe for 2017.

Please contact us if you have any questions or concerns about these changes!

Find the Best Employees to Contribute to Your Company

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Turnover is an often overlooked cost of doing business. Sometimes it can run as high as 25% of salary and benefits. One way to reduce this cost is to hire wisely. It’s an oft-quoted cliché that employees are a company’s most valuable assets. Try generating revenue with unmotivated or unskilled employees, and you’ll soon discover that the cliché rings true.

How do you locate the best employees?

Know what you’re looking for. Before you publish a job announcement or talk to potential candidates, consider the type of skills that would fit best with your company. This may involve clarifying the types of skills that are essential to your company, as well as skills that are specific to the position being filled. For example, if the business prides itself on written communications, you don’t want to hire a candidate who struggles with grammar or balks at the prospect of writing a report.

Look in the right places. Once you’re clear about the type of employee you’re hoping to hire, focus on discovering the best candidates and drawing them to your company. You might post the position on job boards of specific trade organizations, network with local colleges and technical schools, or ask for recommendations from your current employees. In general, the more specific skills you hope to find, the wider net you’ll have to cast.

Make the interview count. Potential candidates are often counseled to conduct mock interviews, and wise employers will hone their interviewing skills too. You want to identify candidates who will be eager to contribute to your company. Asking focused questions and listening with a purpose are key to the interview process. A good interviewer will also attempt to identify “red flags” that indicate potential problems. For example, the candidate may provide vague or rambling answers to simple questions. This could indicate normal interview anxiety, or he or she might be hiding key facts from you – information that could directly affect your hiring decision.

Finding quality employees that will mesh well with your company culture is not an exact science. But, thoughtful preparation and careful interviewing can pay dividends for years to come.

Tax Tips for Newlyweds

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The tax implications of marriage are probably not the first thing on the minds of most newlyweds, but paying a little attention to it now can save time and even money later. Here are a few tips to help those who are about to embark on a new life together.

Tip 1: Notify the Social Security Administration with any name change(s). The IRS has a name match program with the SSA and will potentially reject deductions and joint filing if the name change is not made timely. Do this by filing Form SS-5 with the SSA.

Tip 2: Use Form 8822 to update your address with the IRS if either of you is moving.

Tip 3: Change your name and addresses with your employer and the Postal Service to ensure your W-2s are correctly stated and delivered to the proper address.

Tip 4: If selling one or two residences, make sure you review how capital gains tax laws apply to your situation. This is especially important if one of you has been in your home for only a short time or if either home has appreciated in value.

Tip 5: Review legal documents to ensure legal titles are as you wish them to be. This includes bank accounts, titles on property, credit cards, insurance policies, and living wills.

Tip 6: Recalculate your payroll withholdings and file a new W-4. If both newlyweds work, your combined income could put you into a higher tax bracket. This phenomenon is referred to as “the marriage penalty.” By changing withholdings now, you can avoid a big surprise at tax time.

Tip 7: Review your employee benefits and make necessary changes in health care, insurance, retirement account beneficiaries, and tax-preferred spending accounts. Marriage is a qualified event to make mid-year changes by most employees.

If you or someone close to you has questions about marriage and taxes, give us a call. We’d love to help.

Building Customer Loyalty – A Few Basics

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If your company isn’t showing your customers you care, it’s time to get back to the basics. Your company’s survival depends on it.

Studies have shown that businesses often spend five to six times more to attract a new customer than to keep an existing one. Over the long term, those dollars add up. In fact, a company’s ability to care for its customers often determines its survivability in the marketplace. Make customers happy and they’ll stick with you; disappoint them and they’ll tell their friends.

Building customer loyalty is a matter of focusing on the basics. Does your company need to refocus on any of them?

Hire friendly people. You have probably visited a business where you encountered a grumpy salesperson or a bashful receptionist. Unlikeable staff will not generate repeat business. The staff you employ should enjoy interacting with people. If your employees regularly hide out in the back room instead of greeting clients, it’s time to take a hard look at your hiring practices.

Request customer feedback. This can be as simple as spending a few minutes with a customer to inquire about his or her experience with your company. Be specific. Instead of asking “How was our customer service today?”, ask a more specific question like, “Did our salesperson answer all your questions about XYZ product?” You might also establish a focus group of customers to solicit ideas for improving your products and services.

Follow up. If customers spend valuable time providing their opinions via surveys, suggestion boxes, or focus groups, don’t ignore what they have to say. Let them know that you take their ideas seriously and are looking for ways to implement at least some of their suggestions.

Never stop training. Often employees treat customers rudely or disrespectfully because they simply lack training in proper etiquette. Show them the proper way to answer phone calls, how to make eye contact and smile, how to help without being pushy. With a little focused training, most people can learn good customer service skills. Take time upfront to develop these skills in your employees and you’ll reap dividends in customer loyalty.

Model proper behavior. Simply put, the boss should exemplify top-notch customer service. If your employees see you treating clients poorly, don’t be surprised if they assume that such behavior is acceptable.

Remember: it’s easier to keep an existing client than to beat the bushes for a new one. It’s cheaper, too.

Take These Steps to Help Prevent Fraud in Your Business

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How can you prevent employee fraud in your business? Here are four suggestions.

  • Screen job applicants. Check work references, criminal records, and professional recommendations. By instituting a screening policy, you may save a lot of cash and grief. Just remember to treat every applicant equally, and get written permission for background checks.
  • Reconcile bank accounts. A standard and simple internal control is to separate employees who pay bills and make deposits from those who reconcile accounts. As an owner, making time to personally review deposits and disbursements on a regular basis can deter fraudulent billing or cash skimming schemes.
  • Secure inventory and supplies. This can be as simple as regularly changing combinations on warehouse doors or locking supply cabinets. Laptop computers are especially vulnerable to theft, so make a priority of securing them.
  • Get a cash control review. Having a trained set of eyes inspect your books, records, and operations can pay for itself many times over. Skilled auditors can ferret out scams and help your business develop stronger controls against criminals, both inside and out.

If you’d like assistance with this or any of your business concerns, give us a call.

Accountable Plans Are a Win-Win Business Idea

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Are you looking for a way to give your employees a tax-free benefit that is also tax-deductible for your business? Consider an accountable plan. These arrangements let you reimburse your employees for expenses incurred on behalf of your company, such as driving to the post office or office supply store. With a properly administered plan, you can deduct the reimbursements on your business tax return, yet the payments are not considered income to your employees.

How can you make sure your plan qualifies? Here are three requirements.

  • The reimbursements must be for allowable business expenses. For instance, you can repay employees for hotel and other travel expenses when traveling to a trade convention.
  • Your employees need to keep records of the expenses, and provide those records to you.
  • If you pay or advance your employees more than the actual amounts spent on business items, the excess must be returned to you. Amounts not returned are income to your employee, and are subject to payroll taxes.

Contact us to discuss your policies for repaying employees’ business expenses. We’ll help you make your plan accountable.

Start Preparing Now for New Overtime Rules

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In May, the U.S. Department of Labor updated the rules for paying overtime.

Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $23,660 under current rules.

The changes take effect December 1, 2016, which means you need to begin reviewing your payroll now, as penalties and fines can be assessed for noncompliance.

One important step is to begin tracking hours for your salaried employees.

Contact us if you need assistance in this area.

Improve Productivity With Happy Employees

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Happy employees can have a positive impact on your operations, customer support, and profit level. Here are suggestions for keeping your workforce upbeat.

Lead by example. Demonstrate the personal discipline and commitment you hope to instill in your workers by showing up every day with a positive attitude.

Emphasize the link between attendance and productivity. Absenteeism is a symptom of unhappy employees. Help your employees understand the importance of the role they play in the success of the business.

Learn what motivates your employees. Conduct an online survey to learn if money, recognition, promotion, or time off drives your employees.

Enrich skill sets. Cross-training and job rotation can improve appreciation for overall business operations and mitigate boredom and dissatisfaction.

Create a time-off bank. Modify the traditional offering of vacation, personal, and sick days. Give your employees the responsibility and ability to balance work and home obligations by empowering them to manage total available paid time off.

Other suggestions for a healthy working environment and happy employees include celebrations and team building. While these “soft” methods may seem a distraction from everyday business, your employees will appreciate the effort and your business will profit from the resulting improvements in performance.

What You Need to Know About Hiring Seasonal Workers

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If summertime is a busy time for your business, you may be ready to hire seasonal workers. Here are tax rules to keep in mind.

  • Affordable Care Act exception. When you employ 50 or more full-time employees, you’re considered a “large employer” and are generally required to provide health insurance coverage or pay a penalty. However, the law provides an exception for seasonal workers, defined as those you employ for not more than 120 days during the prior calendar year. In general, your answer to two questions determines if you qualify for the exception. Did your workforce exceed 50 full-time employees for 120 days or fewer during the year? Were the employees in excess of 50 who were employed during that period seasonal workers? If both answers are yes, you’re generally not considered a large employer.
  • Employment taxes. Temporary workers are typically subject to the same employment tax rules as regular employees. You’ll generally have to withhold social security and Medicare taxes, as well as federal income tax from wages. You’ll also have to follow payroll tax deposit rules and employment return filing requirements.
  • Employment tax returns. Special filing rules may apply when you only hire employees at a specific season of the year, such as summertime. For each quarter that you pay wages, you can check the box for “seasonal employer” on Form 941, Employer’s Quarterly Federal Tax Return. By notifying the IRS of your seasonal status, you’re not required to file returns for quarters when you have no wages or tax liability.
  • Please contact us for more information about payroll tax rules, recordkeeping requirements, and documentation for seasonal employees. We’re here to make sure that your busy summer season goes smoothly.
Beautician

A Job Change Can Change Your Taxes

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Planning to change employers this year? As you look forward to starting your new job, you’re probably not thinking about taxes. But actions you take now can have an impact next April – and beyond. Read more