SWG BLOG


Ohio’s Minimum Wage Going Up Jan. 1

By Daniel Slagle, CPA
October 13, 2017
Category: State of Ohio

On Jan. 1 Ohioans making minimum wage will get a pay raise.


Workers making the state minimum wage of .15 an hour will now receive .30 an hour. The pay for tipped employees increases from .08 to .15 an hour.


The Ohio Department of Commerce announced the increase on Sept. 29.


The current federal minimum wage is .25.


The 15-cent raise is the largest in Ohio since January of 2015.


Tags: State of Ohio minimum wage raise Ohio Department of Commerce

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and


Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million in gross receipts file quarterly, and pay a rate component on any taxable receipts over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million in gross receipts file quarterly, and pay a rate component on any taxable receipts over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million in gross receipts file quarterly, and pay a rate component on any taxable receipts over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million in gross receipts file quarterly, and pay a rate component on any taxable receipts over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million in gross receipts file quarterly, and pay a rate component on any taxable receipts over

Top Questions Ohio Business Owners Have About Unclaimed Funds

By Vera Vest
October 05, 2017
Category: Small Business

1) Do I have to file even though I don’t have any unclaimed funds to report?


Yes. If you don’t have any unclaimed funds to report, you are still required to file a Negative (NONE) Annual Unclaimed Funds Report. The negative report is required to verify that you have examined your account records and have no unclaimed funds to report. There are two types of entities that are not required to file – political subdivisions of the State, and hospitals that are tax exempt under IRS 501 (c)(3).


2) What are Unclaimed Funds?


        -Unclaimed funds are typically considered any funds not redeemed by a customer, client, or employee within a set time; accounts that have gone dormant.

        -Most accounts go dormant within 3 to 5 years, except for payroll checks, which become dormant after 1 year. To be considered unclaimed the funds must have been dormant for the specified amount of time, and the holder of the funds has been unable to locate the owner. (See a full list of Nature of Funds Codes )

        -Once the funds are turned over to the State, the State will maintain the funds until they are claimed by the rightful owner or their heirs. Safe deposit box contents, stocks, bonds, stamps, and other items that can be converted to cash can also be considered unclaimed funds. On occasion, the State will auction off such physical items and maintain the proceeds on file for the rightful owner. Personal items such as jewelry, photographs, letters, etc. are not accepted by the Division of Unclaimed Funds.


3) Are there types of unclaimed funds that don’t need to be reported?


        -There are three main categories of unclaimed funds that do not need to be reported.

              i. Wages (Paychecks) .00 or less.

              ii. Merchandise gift certificates and or unredeemed gift certificates

              iii. Business to business transactions (As an exemption to the exemption, there are a few specific types of business to business transactions that DO need to be reported. Equity, dividend, and interest payments from business to business still need to be reported. Funds payable due to an insurance policy or membership deposit are also not exempt.)


4) What is the deadline to file the Annual Unclaimed Funds Report?


        -The annual deadline for most businesses is November 1st. The annual deadline to file for life insurance companies is May 1st.


5) Is there a penalty for not filing?


        -There are heavy penalties for not filing or under reporting unclaimed funds.

        -The civil penalty for failing to file your Annual Report of Unclaimed Funds can be as much as 0.00 per day. There are also criminal penalties of up to 0.00 a day for failing to report, or under reporting, unclaimed funds. An interest of 1% per month on the balance of the funds due can also be assessed. 


6) Is there a minimum amount of unclaimed funds required to report?


        -There is no minimum amount to file the unclaimed funds report. Paychecks under .00 do not need to be reported. Any other accounts under .00 to need to be reported, however they can be combined and reported as an aggregate total. (More details)


7) What do I do if I have unclaimed funds to report?


        -If the amount is .00 or more, you must send a letter to the account holder at their last known address, and wait at least 30 days for them to respond to collect their funds. 

        -If the amount is over 00.00, the notification letter is required to be sent via certified mail with return receipt requested.

        -You must keep a record of the account, including:

                 • Holders’ name and last known address

                 • Amount of the account

                 • Nature of the funds (see the instructions for a list of codes)

                 • Account holders’ social security number or EIN

                 • Relationship code of the account

        -If the notification letter is returned or you do not receive a response after 30 days, you will include the account in your annual unclaimed funds report and the value of the account will be transferred to the Division of Unclaimed Funds.


8) What does the Division of Unclaimed Funds do?


        -The Division of Unclaimed Funds holds unclaimed funds until the rightful owner of the funds, or their beneficiaries, claim them. There is no deadline to claim funds. 

        -The Division maintains a searchable database for unclaimed funds, searchable at www.missingmoney.com





References

http://www.com.ohio.gov/unfd

http://www.missingmoney.com/

https://www.unclaimed.org/what/

http://codes.ohio.gov/orc/169.03

http://codes.ohio.gov/orc/169.12

http://www.com.ohio.gov/documents/unfd_DocumentationRequirementList.pdf

http://www.com.ohio.gov/documents/unfd_OUF-1UnclaimedFundsReportingForms.pdf

http://www.com.ohio.gov/unfd/ClaimantFAQ.aspx

http://com.ohio.gov/documents/unfd_AnnualReportOfUnclaimedFunds.pdf

Tags: Unclaimed Funds State of Ohio Filings Unclaimed Funds Report UF

10 Fall Fun Facts from SWG

By Vera Vest
September 21, 2017
Category: Fun

SWG Fall Fact #1


SWG Fall Fact#2


SWG Fall Fact#3


SWG Fall Fact#4


SWG Fall Fact#5


SWG Fall Fact#6


SWG Fall Fact#7


SWG Fall Fact#8


SWG Fall Fact#9



SWG Fall Fact#10
Tags: fun facts swg vsquared fall fall fun facts image post

Meal and Entertainment Expenses

By Daniel Slagle, CPA
August 11, 2017
Category: Small Business

Recently I have had many inquiries about the full deductibility of meals & entertainment expense on the tax return.  Unfortunately there are many variables that effect that determination therefore I have opted to include the actual codification of this deduction to hopefully clarify the rules and assist our clients with the ability to “fit” their individual situation to meet the rules.


In general, IRC Sec. 274(n) allows a deduction for only 50% of otherwise allowable meal and entertainment expenses. However, this restriction doesn't apply to the following types of expenses:


1. Expenses for meals and entertainment able to be included in the gross income of a non-employee who receives a Form 1099.


2. Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees other than certain highly compensated employees (a company picnic, for example).


3. Expenses for items made available to the general public (like promotional popcorn or "comp" items provided for publicity).


4. Expenses for meals and entertainment sold by the business for adequate compensation

.

5. Expenses able to be excluded from gross income as a de minimis fringe benefit.


6. Expenses for tickets to charitable sporting events if (a) the event is organized to benefit a nonprofit organization, (b) 100% of the net proceeds are contributed to the organization, and (c) volunteers are used for substantially all the work in staging the event.


7. Expenses that are treated as compensation to the employee (for example, reimbursement of an employee's meals for a job-related move).


Perhaps the most common of these is the de minimis fringe benefit exception. A de minimis fringe benefit typically involves an item with such a small value that accounting for it would be impractical [IRC Sec. 132(e)(1)]. This could include occasional employee cocktail parties or picnics, group meals, and coffee and doughnuts furnished to employees.


If you have any further questions please feel free to contact our office at any time.
Have a great day
Dan


Reference


Checkpoint Source:PPC's Practitioners Tax Action Bulletins 

© 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.


                

Tags: business deductions business expenses meals & entertainment de minimis fringe benefit

What is the C.A.T.?

By Vera Vest
August 08, 2017
Category: CAT

No, it’s not a tax on household pets, or internet memes.


CAT stands for Commercial Activity Tax. It is an annual tax imposed on the privilege of doing business in Ohio. The CAT has been in effect since 2005. It applies to all types of businesses, and to basically all business entities: corporations, LLCs, partnerships, all the way down to sole proprietorships.  The CAT replaced the Ohio Corporate Franchise Tax and the Ohio Personal Property taxes for businesses.


Unlike Sales and Use taxes, the CAT is not a transactional tax. Businesses aren’t able to directly pass the cost of the CAT to their customers. It is considered a cost of doing business in Ohio, and should be included with other overhead costs such as rent, utilities, and labor.


The tax is based on gross receipts from business activities in Ohio. If a business has more than 0,000 of Ohio gross taxable receipts per calendar year they must register for the CAT.


CAT is filed and paid annually or quarterly, depending on the gross taxable receipts of the company. Businesses with gross receipts between 0,000 and million file annually on May 10th, and pay an Annual Minimum Tax (AMT). Businesses with over million in gross receipts file quarterly, and pay a rate component on any taxable receipts over million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers Small Business Ohio

SMB Tax-Smart #4: Bonus!

By Vera Vest
August 01, 2017
Category: Small Business

Above and beyond the Section 179 deduction mentioned in Tax-Smart #3, your business can also claim first-year bonus depreciation equal to 50% of the cost of most new equipment and software placed in service by 12/31/17!


Note that 50% bonus depreciation deductions can create or increase a NOL – Net Operating Loss -  for your business’s 2017 tax year. 


Tags: SMB small business Tax-Smart Section 179 deduction depreciation

SMB Tax-Smart #3: The Big 179!

By Vera Vest
July 26, 2017
Category: Small Business

Under the Section 179 deduction privilege, and eligible business can often claim deductions for the ENTIRE cost of:


New and used equipment

Software additions

Eligible real property costs


Be aware - if your business is already expected to have a tax loss for the year you cannot claim a Section 179 deduction that would create or increase an operating loss. 


Tags: small business tax-smart SMB Section 179

SMB Tax-Smart #2: Employ Your Kid!

By Vera Vest
July 18, 2017
Category: Small Business

If you are self-employed, you’ll want to consider employing your child to work in your business. Especially during the summer! Doing so has tax benefits in that is shifts income (which is not subject to the Kiddie tax) from you to your child. Like Tip #1, this tip is doubly beneficial – it reduces the business income, and provides your child with earned income that they can save for expenses like a car or college. 


Do remember that the wages paid must be reasonable given the child’s age and work skills, and that too much earned income for the child can have a detrimental impact on need-based college financial aid eligibility. 


Tags: SMB SWG Tax-Smart small business

SMB Tax-Smart #1: Start Saving!

By Vera Vest
July 12, 2017
Category: Small Business

Saving to a retirement account isn’t just a strategy for down the road. Make your money pull double -duty – reduce your current tax load while increasing your retirement savings. Contributing to a SEP-IRA or a SIMPLE-IRA can be an effective strategy even if your business is only part-time.


We have tax planning appointments available to discuss your unique tax situation. 330-499-9948


Tags: small business SMB savings IRA

SWG Small Business Tax-Smart Strategies 2017 Series

By Vera Vest
July 07, 2017
Category: Small Business

In the coming weeks, we’ll be discussing several tax-smart strategies for mid-year tax planning purposes. Even with uncertainty about this year’s tax rates and rules, there are things you can do to improve your situation. Please don’t hesitate to contact us if you want more details or would like to schedule a tax planning strategy session. 

Tags: Small business SMB Tax-Smart 2017 strategies

QuickBooks Backup Files - A Quick Review

By Vera Vest
January 09, 2017
Category: Quickbooks

What It Is: A complete backup of your company file


Why We Need It: Having the correct format of QuickBooks backup file (a .QBB or .QBM file, rather than a .QBX or accountant’s version) allows us to not only get a “big picture” view of your data, but makes it far easier to locate any accounting errors or issues so they can be corrected as soon as possible.


QB logo                                                                  Sharefile Logo


When We Need It: It depends on if/ how often we perform compilations and returns for you. We’ll need your backup file either on a monthly, quarterly, or annual basis, but we’ll definitely need it at the end of the year no matter what. The sooner you send us the backup files, the more time we have to review your information.



How To Send It To Us: The easiest, fastest, and most secure way to send us your backup file is through the SWG Client Portal. Just look for the upload files link in any or our email signatures (Image 1)


Email signature upload link

or visit our team pages on the slaglewolf.com site to find upload links there as well (Image 2).



Image 2: Sharefile link on slaglewolf.com


Either way, once you click the upload link you will come to the upload file box. (Image 3)


Image 3: Upload file box


You can either “drag and drop” the backup file, or click “Browse files” to navigate through the File Explorer to where the file is saved. Once you’ve selected the file, just click “Upload” and the file will be sent directly and securely.


*****Important Reminder***** 

Once your QuickBooks file has been sent, please send us the password to the file in an email, or call the office to relay it over the phone. 


Once we have your password on file we will only need you to resend it if you have to update or change it for some reason, such as upgrading your version of QuickBooks.


How to create a QuickBooks backup file: If you’re not already doing this, it’s a good idea to create a backup on a regular basis, and store it somewhere away from the main company file, either on a flash drive or a cloud storage (please note, you cannot keep your main active file on cloud storage, the file will eventually become corrupt and unrecoverable due to the way cloud drives save and sync files. But it’s perfectly safe for backup files to be stored in the cloud, just make sure to save them to the computer before using them). How often you create a backup file will depend on how much data you enter and how often you make entries. Some companies might be fine with monthly or biweekly, while other may need weekly or even daily backups.


Requirements:  You must be in single-user mode to perform a backup feature. To switch to single-user mode, be sure that no one else is logged into QuickBooks. Choose File > Switch to Single-user Mode, and follow the prompts to switch and log in again. When you have finished backing up your company file, you can choose File > Switch to Multi-user Mode to return to multi-user mode.


To back up your company file:


Choose File > Back Up Company > Create Local Backup.


Step 1


Select Local Backup.


Step 2


Click the Options button.  The Backup Options window will open


Step 3


Click Browse and select the location where you want to save your backup copy.  If you have a file hosting service (such as DropBox), flash drive or other removable media, find the item from the list.  You may need to open additional folders.  When you have chosen, click OK. (Make sure to note where you’re saving the file, that will make it easier when you need to locate it to upload it.)


Step 4


Select the additional options as needed. When complete click OK.

Add the date and time of the backup to the file name (recommended)

Limit the number of backup copies to this folder to #

Remind me to backup when I close my computer file every # times

 Verify data:

·         Complete verification (recommended)

·         Quicker verification

·         No verification


Step 5


Click Next.

Select Save It Now, and click Finish. The backup will begin to process.


Step 6


Images and Create Backup file instructions from https://payroll.intuit.com/support/kb/1000660.html


Summary:


1) Send in your backups as soon as possible.


2)  Create backup file in QuickBooks and save to an easily findable location.


3) Upload file via the SWG Client Portal, email the file (if it’s under 9 MB in size), or drop off a flashdrive containing the file.


4) Email or call in your QuickBooks file password to the office.

Tags: Quickbooks backups small business SMB Sharefile

A Few Notes for the Upcoming Tax Season

By Lauren Mihok
December 19, 2016
Category: Year End

As another year comes to an end, all of us at SWG come together to finish up tax planning season and go right into tax season! We like to keep our clients privy to the everchanging landscape of the tax code. Below are some notable items to keep in mind for your 2016 taxes:



1.       For the child tax credit and the American Opportunity Tax Credit, preparer due diligence has increased for the 2016 tax year & we are required to now obtain the following documents for all qualifying children:

a.       A copy of the child's social security card

b.       A letter with the child's name & the parent's name with the parent's address on the letter. (i.e. a letter from the school, medical records which show both the parent's name & child's name with the home address, or court records)

c.       If you are the non-custodial parent & it is your year to claim the child you will need a form 8332 (Release of Exemption) signed by the custodial parent.

If you are un-sure if you receive the child tax credit, we will contact you for this information prior to completion of your return.

 

Due to the firm being subject to preparer penalties under the new due diligence requirements, we are mandating we have these documents prior to filing applicable returns. We cannot continue to provide our stellar services if we go out of business because of excessive preparer penalties!

 

2.       Tax returns claiming the earned income tax credit & or the additional child tax credit will not be processed by the IRS until February 15th. This means refunds with these credits could potentially be received late February to early March regardless of how early the return is filed.

 

3.       IRA max contributions have remained unchanged at ,500 (for tax payers over the age of 50 the max contribution is ,500)

 

4.       Mileage Rates:

Business mileage rate for 2016 is at 54.5 cents per mile

Charity mileage rate is at 14 cents per mile

Medical mileage rate is 19 cents per mile

 

5.       The shared responsibility penalty (penalty for not having health insurance) has increase to 5 per person, 7.50 per dependent or 2.5% of the modified adjusted gross income. The penalty is the higher of the two.

 

6.       Partnership returns (Form 1065) are now due on March 15th.

 

7.       Corporate returns (those filing 1120 for a C-corp) are now due April 15th.

  

8.       To claim the college tax credits (American Opportunity Credit, Lifetime Learning Credit, Tuition & Fees Deductions) for the 2016 tax year we will need the form 1098T with box 1 showing the amount paid. If there were amounts paid & they do not show up on box one of the form, you will need to contact the college to obtain a corrected form showing the true amount paid. Without a 1098T showing an amount paid in box one of the form for the tax year, the IRS may negate the college credits on your tax return.

Tags: Year End end of year tax tax code tax code changes

8 Things to Know When Hiring Independent Contractors

By Lauren Mihok
November 18, 2015
Category: 1099

Some of the most common questions our clients have are regarding hiring independent contractors. 1099's and independent contractor classification have become high priorities for IRS audits & payroll tax audits; so it is important that all businesses understand their responsibilities when hiring a subcontractor to perform services for their business. We hope you find this list useful with the year-end closing upon us.


1. REQUEST A W9

Whenever a new contractor provides a service for you, request a W9. This provides the information needed at year-end to issue a 1099. If there is concern that a sub-contractor will not return the completed W9, hold onto the payment for their services until the W9 is returned.

 

2. NO W9 = WITHHOLD 28%

If you do pay a sub-contractor without a W9 on file you are required to withhold 28% for backup withholding.  In the case of an audit, if you haven’t withheld the backup withholding on payments to a sub-contractor and they reveal you should have, your business could be liable to pay the taxes that should have been withheld.

 

3. VERIFY YOU HAVE ALL NECCESARY INFORMATION

When you receive the W9 ensure you have all the information needed by verifying the following:

• EIN is on the W9 if they are classified as an LLC, partnership or a corporation

• SSN and the sub-contractor's legal name  is on the W9 if they are an individual performing the sub-contracted services

 

4. POSSIBLE EXCEPTION

If a sub-contractor is incorporated you do not need to issue a 1099 at year end (with the exception of attorneys and law firms)

 

5. REMEMBER YOUR ABCs

There is an ABC test to determine whether a subcontractor should be considered an employee or a sub-contractor. If the worker doesn’t meet all three of the following requirements the worker should be classified as an employee & be put on payroll rather than issued a 1099 at year end.

 

Test A - Control or Direction of the work - Does the worker determine their own schedule? Do they establish their own hours?

 

Test B - Outside Service- The worker’s service is outside the usual course and/or place of business (businesses without a fixed place of business should rely on the usual course of business rule)

 

Test C - Independent Business or Trade- Does the worker have a separate place of business? Do they have their own worker’s compensation policy? Do they hold their own applicable licenses for their business?

 

6. SUPPLIES OR PRODUCTS – FROM A VENDOR

When you are purchasing supplies or products from a vendor you do not need to issue a 1099 to them.

(The only exception to this is when the product is for resale & the purchases exceeded ,000 to any individual vendor)

 

7. SUPPLIES OR PRODUCTS – FROM A SUB-CONTRACTOR

When a sub-contractor bills you for items purchased & services provided you can issue the 1099 for the total amount paid to them.

 

8. 1099-QUALIFYING PAYMENTS MUST BE REPORTED

On a business tax return reported to the IRS the following questions have to be answered:

"Did the business make any payments in 2014 that would require it to file forms 1099?"

"If yes, did the business file forms 1099?"

In simpler terms, if you don't follow the rules for issuing 1099's, tax preparers are required to let the IRS know when your tax return is filed!



There is a January filing deadline for 1099s, details will be posted on www.slaglewolf.com and SWG’s social media pages as the deadline approaches.  If you still have questions regarding 1099 requirements or sub-contracted labor, feel free to contact our office for further assistance.


Tags: 1099 Contractors SMB Small Business
million, in addition to the Annual Minimum Tax.


There is a monthly fee of 0 for businesses that fail to register for the CAT in a timely manner. Failing to file and pay the CAT carries additional penalties and can affect your business’s ability to conduct business in Ohio. 


References

http://www.tax.ohio.gov/commercial_activities.aspx

http://www.tax.ohio.gov/commercial_activities/faqs/cat.aspx

http://www.news-herald.com/article/HR/20140917/NEWS/140919566


Tags: cat CAT C.A.T. AMT small business Ohio tax

Annual BWC True-Up

By Vera Vest
August 04, 2017
Category: BWC

The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.


What does “True-Up” even mean?


Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total. 


Ok, so it’s an adjustment. Where does BWC come in?


The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.


So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?


Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.


Do I really need to file a BWC True-Up?


Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.



References

https://www.quora.com/In-accounting-what-does-the-term-true-up-mean

https://www.bwc.ohio.gov/downloads/blankpdf/ProspectiveOverviewPA.pdf

https://www.bwc.ohio.gov/downloads/blankpdf/prospectivetrueupinstructions.pdf


Tags: BWC True-Up Employers