A Look Inside The New Tax Plan. The Standard Deduction vs. Itemizing

There has been so much hype about the new tax plan. I have received numerous calls and emails with concerns, so I thought I would cover a big piece of it for New Yorkers.

The first thing you need to consider before you worry is do you Itemize your deductions or have you been taking the Standard Deduction the past few years? If you have not been Itemizing in the past you are not likely to now - the amounts all doubled. If you file Single - it went from $ 6,350 to $12,200  if you file Head of Household $9,350 to $18,000 and if you file Married $12,700 to $24,400.  

This is not a huge break though because the Personal Exemption has been cut completely. In the past we could deduct from taxable income either the Standard or Itemized Deductions PLUS an exemption of $4050 (2017) for each member of the family. In two or three person households the amounts will equal closely to the new higher Standard Deduction – not much of a change for you…other filing combinations will be impacted differently. The overall issue is if you pay very high real estate taxes on your main home or vacation home you
will likely loss deduction.  

Keep in mind – if the RE Taxes you pay are a business deduction - for example; - rentals or farming there is no loss at all. This rule only applies to personal property or that held for investment only. The main thing to remember is that the brackets have changed significantly for lower to mid-income taxpayers. The rates did not change a whole lot, but how they are applied did. In the analysis I did for people over the past month most came out fairly close to what they are paying now. 

Overall, as with anything else some will be helped and some will be hurt. We are too far gone to ever make this a truly fair system. Those of us in NY will not see much benefit at all, but I want to leave you with this thought. There are many (not living in NY or CA) that will be helped hugely by these changes. We need to get the GDP growing. I hope they have found a way.

Google vs. The Professionals

Don’t get me wrong I use google every day. The web has become a primary source of information. It provides us with research and access to more information than we ever thought we “needed”. I do see some danger though as people have become accustom to just flipping out their phone and fact checking everything as if it can replace trusted advice.

As a professional in the consulting business I am starting to see the trust in the internet grow. There are articles and blogs about taxes, business strategy, HR problems, valuation and business plans some of which are factual and well-written and with sound judgement and others not so much. 

My worry and purpose for this article is because people are now using Google to justify their decision making and actions. Instead of seeking sound individualized advice based on their situation they are finding the answer that they like best, meets their needs and going with it. Using it is as their defense for action. Yes, scary I know…

The danger as I see it is people are relying on advice that does not apply. Every state has different laws and regulations, the tax code overlaps and does not apply to every return the same way. The events of a similar situation can have drastically different outcomes based on where you are located.

The moral of my story is this, when something as important as your business is the subject of your google search back it up by confirming with a professional that has the knowledge and experience to adequately assess the facts and provide you with sound advice. Google is great, but can you really believe everything you read?




Planning and Projections

If you are a calendar year business, November should be your planning month. (Fiscal year companies – the advice is the same only the month may change.)

Regardless of the size of your company it is an excellent time to reflect on the first 10 months of the year and to look ahead to the next. You need to be deciding if this is the right time to purchase something to reduce taxes and how that purchase will affect cash flow.

So many people go see their Accountant for tax planning this time of year with incomplete and inaccurate books and no real plans. In order to get the best results for that time and money you really need to do your homework a little beforehand. I do advocate for doing a full budget process even in small companies; especially if you are planning to grow your business. It is not critical the process be executed fully to reap benefits from some of the steps.

At the very least do some analysis:

Look at your sales, expenses, margins and work force, make sure your financial house is in order. Determine if your assets are working for you or against you. Would replacing a piece of equipment increase productivity?

Set some goals for you and your team: Studies prove giving your team goals helps motivate them to Set goals for advertising and a related spending plan. Too many companies advertising in a vacuum, if you can’t measure the effectiveness of those dollars you may be wasting money. You may be surprised how spending a few hours can positively affect your bottom line and your cash flow.

Let us know if we can help you with any planning process or get you started on your way.

The Employee Handbook - Friend or Foe?

So many small businesses do not have Employee Handbooks. I hear a wide variety of reasons why, but the most common is that they just don’t get around to it. I have also heard it is too expensive and too hard to make one size that fits all for “their” employees. I suppose if you have only one employee then you likely don’t need one, but for those with two or more keep reading.

If you have one – GREAT – my question to you is – “Are you following it?”. If you have a 100+ page Employee Handbook and you don’t even know what is in there, you likely have a bigger problem than not having one at all. It may shock you, but having a Handbook and then breaking your own rules sets a precedent. The DOL is not too keen on allowing you to only apply the rules when it’s convenient for you as an Employer. My suggestion is to review your current book and either cut it down to something you can truly follow or eliminate the Employee Handbook and then opt for written Employment Agreements with each employee. Each can be customized for the position and the standard boiler plate parts you need added in to cover more adequately than a Handbook you ignore.

For those of you that do not have one yet. Do something good for your business and prioritize it. Most often I find that employees welcome having the rules given to them in writing - especially when they are followed by all. Make sure you get an Employee Handbook customized to your business and needs. Yes, some DOL rules apply to every employer and employee, but many rules are determined by the number of Full-time Equivalent (FTE) Employees you have working for you at one time. Other rules can really be what you want them to be, custom to the company.

Employers with sound Handbooks that are followed have a bit of insurance when dealing with some difficult employee issues. If you lay out the rules in writing and make sure they are followed by management then you may be able to save precious points on your unemployment rate when terminating a troublemaker. It also aids in hanging on to the good employees you want to keep. Rules may feel like your foe, restrictive and difficult when trying to get some things done, but rules are also a great friend, they are an equalizer and short road for unloading an employee who is not helping your bottom line.

By: Kimberly Manrow EA 

How to know if it's really the IRS calling or knocking on your door

Original Link:  https://www.irs.gov/newsroom/how-to-know-its-really-the-irs-calling-or-knocking-on-your-door

FS-2017-07, April 19, 2017

Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.

Note that the IRS does not:

  • Demand that you use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for your debit or credit card numbers over the phone.
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. Generally, the IRS will first mail you a bill if you owe any taxes. You should also be advised of your rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

The IRS instructs taxpayers to make payments to the “United States Treasury.” The IRS provides specific guidelines on how you can make a tax payment at irs.gov/payments.

Here is what the IRS will do:

If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for Federal employees and contractors. You have the right to see these credentials.


IRS collection employees may call or come to a home or business unannounced to collect a tax debt. They will not demand that you make an immediate payment to a source other than the U.S. Treasury.

Learn more about the IRS revenue officers’ collection work.

The IRS can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask for payment on a prepaid debit card or gift card. Taxpayers can learn about the IRS payment options on irs.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency. 

Learn more about Private Debt Collectors.


IRS employees conducting audits may call taxpayers to set up appointments, but not without having first notified them by mail. After mailing an official notification of an audit, an auditor/tax examiner may call to discuss items pertaining to the audit.

Learn more about the IRS audit process.

Criminal Investigations

IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment. 

Learn more about the What Criminal Investigation Does and How Criminal Investigations are Initiated.

Beware of Impersonations

Scams take many shapes and forms, such as phone calls, letters and emails. Many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts.

Know Who to Contact

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
  • Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

See also:


How to know it’s really the IRS calling or knocking on your door: Collection

Revenue officers are IRS civil enforcement employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return.  Their role involves education, investigation, and when necessary, appropriate enforcement.

Generally, home or business visits are unannounced because scheduling appointments for such matters would be inconsistent with their proactive and urgent nature. For example, many urgent and complex cases involve employers’ employment tax withholding requirement.

Revenue officers carry two forms of official identification.  Both forms of Identification have serial numbers – and you can ask to see both.

Revenue Officer Visits

    • The vast majority of collection cases begin as letters (called “notices”) sent to taxpayers because the case is unresolved.  A significant number of these cases are also previously worked by the Automated Collection System – an IRS program that tries to resolve the taxpayer’s account over the phone directly with the taxpayer after a notice sent to the taxpayer was unsuccessful at resolving the situation.  
    • A small portion of the revenue officers’ work involves proactive outreach to employers, called Federal Tax Deposit Alerts, sent at the earliest sign that a business taxpayer is falling behind on payroll tax deposits. These are generally not preceded by a notice.

See also:

How to know it’s really the IRS calling or knocking on your door: Audits

The IRS examines or audits tax returns to verify that what the taxpayer reported is correct. This doesn’t mean that the taxpayer has made an error or been dishonest. In fact, some examinations result in a refund to the taxpayer or acceptance of the return without change.

There are various reasons the IRS may telephone or visit a taxpayer at home during an audit, but at that point the taxpayer would be well aware of the audit.   

Audit Contacts

    • After mailing an initial appointment letter we may call to confirm and discuss items needed for the audit. An audit may include an interview with the taxpayer or his or her Power of Attorney, if one is appointed, and sometimes include a tour of the taxpayer’s business operation.
    • Third party contacts – if while examining one taxpayer’s return, we need information from someone else, we will first issue a letter to that third party requesting the information.  After that we may contact them by telephone.


This week (12/1/16), a new nationwide rule on overtime pay was supposed to take effect. But last week, in response to a legal challenge, a federal judge in Texas issued a preliminary injunction blocking the change. The Obama administration sought to raise the salary cap for workers eligible for overtime pay to $47,500 a year; about double the current cap. The rule would affect millions of workers, requiring employers to pay them time-and-a-half for every hour exceeding 40 hours in a given week. The worst part is many companies have already prepared for the change.

The injunction will likely push President Obama’s executive order past the 1/20/16 inauguration which is when he’s out of office. It’s unlikely President-Elect Trump will agree to the same executive order.

What does this all mean for you, the small business owner?
I’m always hesitant to predict what will happen in the future, but at the very least, this new law is on-hold for the time being. When things become more clear, I will be happy to update you further.

In the meantime, if you have any questions regarding anything specific to your situation – please feel free to contact my office at (315) 258-8780 or Kim@asterfg.com


Strategy for the Future

by Kimberly S. Manrow 

As I sit and listen to the politicians and their party leaders of the last two weeks, I am finding myself more concerned about the future of my own business than ever before. This is shaping up to be an election like no other in my business life; leaving me feeling like I need two plans for the future. Business is about seizing opportunity, capitalizing on the right risks and be willing to change with the tide.  The real question is which tide will be coming? They could not be more different on the most important business issues that will reshape the small business climate.

We as small business owners will need to pay close attention to events over the next 3 months and consider having a strategy to deal with the fallout depending on which candidate actually wins. One of the worse places in business to be is unprepared for the winds of change.

I expect few changes for 2016 that will strongly affect many of us, our leaders are too caught up in power struggles to be bothered with tax stuff right now. But there is a long list of employment issues, regulation changes and inflationary concerns coming that will affect every business in this country. 

Most small business owners are often too busy to think much about the future, we spend most of our time just trying to keep up and stop to smell the roses once in a while. I challenge you to think about how $15.00 minimum wage will affect you directly, but more so the burdensome inflation that will come out of it. What are you going to do for all employees’ compensation levels when that happens? How are you going to deal with the new salaried employee rules already law coming December 1? These are just the beginning of new regulation… but what if the floodgates open and you are not ready for it? How long will it take you to take action?  History does repeat itself, which means the ones most poised to seize the day will reap the most benefit.

Most of the clients we have talked with all stated they will have to raise prices to stay in business depending on who wins this fall.  How much are you going to have to raise prices to survive? The planning process can be very enlightening consider exposing yourself and your business to some reflection and critical analysis – think about how well you might sleep being a bit ahead of the curve. 

The DOL’s New Overtime Rule Effective 12/01/16

by Kim Manrow & Josh Amidon

As some of you may know, the US Department of Labor made a long-anticipated (or dreaded, depending on your viewpoint) change to rules on overtime pay under the Fair Labor Standards Act. President Obama acted in another sweeping Executive Decision aimed at Business Owners in a still weak economy.

As a quick recap, the changes include:

·        Increases the minimum annual salary for exempt employees from $23,660 to $47,476 (or from $455/week to $913/week).

·        Increases the minimum annual salary for exempt highly compensated employees from $100,000 to $134,004.

·        Automatically increases or update these thresholds every three years.

Some other fast facts about the new law.

·        Although the rule was published last month, the changes don’t go into effect until 12/1/16. The only way this could change is if Congress writes a bill to overturn/change the rule – which is very unlikely, because it would have to survive a veto from President Obama.

·        The tests for determining who is an exempt employee have not changed.

·        All For-Profit and Not-for-Profit entities with Gross Sales over $500,000 must comply

·        We expect special rules and additional exemptions to come out once the DOL starts to answer the thousands of inquiries very concerned business owners look at the impact this will have on their business.  

Lastly, please keep in mind – this is only the federal rule. The New York State limit was already above the Federal Minimum of $455.00, at $ 600.00.  The new Minimum Wage Laws have prompted NY to make adjustments, but will likely now base their decision on the Federal Mandates.  That information is not yet available.

We urge you to spend some time and review how this decision will affect your business.  Many companies are talking layoffs mixed with price increases.  Also, be aware that the DOL aggregates income, so if you own multiple companies they will add  $500,000 threshold and also look hard at employees doing multiple jobs at different rates.

We will keep you posted on rulings, filed court cases and MOUs for the latest news of this costly new regulation.

We know this can be very confusing, this is why we have HR professionals who can assist in navigating your company through these new laws and guidelines. Please feel free to reach out to us at (315) 258-8780 for more info.     

How much more can the small business owner afford?

We’ve been hearing a lot lately about the potential for an increase in minimum wage and potentially looking to pay more of our employees’ overtime.  In an effort to do something good for those individuals employed in New York State, our state lawmakers have updated the NYS FMLA law making it the most progressive paid family leave law in our country.  The provision becomes fully effective in 2021 but will start with an initial change in 2018.

Currently, an employee is entitled to up to 12 weeks of unpaid job-protected leave.  As of January 1, 2018, the employee will be eligible for 8 weeks of paid FMLA and by 2021, it will increase to the full 12 weeks of paid FMLA time off. 

How will this affect small businesses and their employees? 

The employer is affected because the initial start-up money will be skimmed off the state’s Workers’ Compensation Fund which is paid into by employers.  That means that you could end of paying more for your Workers’ Comp coverage. 

Once the fund is established it will continue to be funded by a payroll deduction on the employee.  They are claiming that this will only be 0.5% (roughly $.70) per week in 2018 ending up at $1.40 per week by 2021.  This amount will be determined by the state who is empowered to decide on a percentage deduction.  Experts are already estimating that this could actually cost employees up to 5 times that much by 2021.

Small Businesses should start planning now for these definite and potential changes.  If you should have any questions or need further information, please contact hour HR team at 315-258-8780.

Can using a subcontractor affect your safety record and/or safety program?

by Rhonda Sheffield

If you own a construction company, the answer can definitely be YES.

There are a lot of factors to take in to consideration when using a new subcontractor or vendor but there is one area that is most often overlooked.  This one mistake could be very costly to your company and you personally depending how your company structure.  Now you may ask “Why would it be costly to my company?”  Well, let’s say for example that one of their workers causes an incident at your workplace.  This may involve one of your employees getting injured, getting a visit from an OSHA inspector – or even worse yet, you may have an innocent bystander get injured which could even open you up to potential lawsuits. 


The best prevention, before starting a relationship with any new subcontractor or vendor, you should review their workplace safety habits.  Here are 5 easy steps to protecting yourself, your company and your workers.


1.      Prequalify your subcontractors/vendors.  Don’t be afraid to ask for their written safety programs, permits and licenses.


2.      Pre-job task and risk assessment.  Have a method for evaluating the risks of the work the subcontractors will be performing on your job site.  You should require them to also adhere to your safety program and policies.


3.      Training and Evaluation.  This should be a requirement before they even step foot on your job site.  Make sure that they have all necessary PPE and training and/or licensing to perform such work.  It might not hurt to even have them review the safety procedures they have been taught with you so that you know that they understand the importance of safety.


4.      Job Monitoring.  Include all onsite workers in to your morning safety or pre-shift tailgate meetings.  Complete weekly inspection walk-throughs to include those areas worked by the subcontractor employees.


5.      Post-job evaluations.  This is something you would or should be doing anyway.  Be sure to include those areas completed by the subcontractors/vendors.  The quality of the finished work is ultimately your responsibility.  It is your reputation on the line.


If you should have any questions, please do not hesitate to contact us at (315) 258-8780.

How Important Are Job Descriptions?

Are formal job descriptions really necessary?  Are you currently utilizing job descriptions for all current positions?  Are your employees aware of what their job qualifications and responsibilities truly are?

If you answered “NO” to any or all of these questions, you may want to read the rest of this article to find out the benefits of job descriptions.

While there is no state or federal law requiring you to have or provide job descriptions, they can be a helpful tool for both legal and practical reasons.

Some of the most important reasons to have them and hand them out to your employees are:

  • They are a useful communication tool.
  • They can help you or your team identify the right candidate for the right job.
  • Legally they could help with potential new hires who may need “reasonable accommodations”.  The job description would serve as a starting point for the conversation with the applicant on which duties they may or may not be able to perform without such accommodations.
  • Gives clear and legitimate minimum qualifications for any position.
  • Assists with justifying an employee’s exempt status.

Not sure how to write them up or where to start?  Feel free to consult with our Human Resource Generalist at 315-258-8780.


Worker’s Compensation Costs causing you pain?

Here are a few easy tips to help you lower these costs:

  • Establish an accident-prevention program.
  • Investigate all accidents, not just ones resulting in claims. 
  • Report accidents promptly. Delays lead employees to contact lawyers.
  • Stay in touch with injured employees and their doctors. That will help you design an appropriate return-to-work plan.
  • Have you checked your coverages lately?  Have you looked in to other worker’s compensation insurance programs such as pay-as-you-go?

For help in setting up any of these programs or for questions,  feel free to consult with our Human Resource Generalist at 315-258-8780.

1099 or W-2, That Is The Question

To this day, many businesses both large and small struggle with the question “Are they an employee or a subcontractor? Do I issue them a W-2 or a 1099?” Does this sound familiar?

It’s the beginning of a new year and we are thinking about taxes, W-2s and 1099s and I’m sure like most companies the subject of W-2s vs. 1099s comes up every year.  Your next thought may be “Oh well, I’m a small business, they won’t bother me.” Trust me, this could not farther from the truth. 

Recently, a local small business owner who had similar situation and ended up paying the penalties or fighting it at an Unemployment Insurance Hearing.  The penalties and interest you could be charged for misclassification can be very steep.  The state may also look to collect workers’ compensation and unemployment premiums for unreported wages. 

 Feel free to consult with our Human Resource Generalist at 315-258-8780. 

For Small Businesses: IRS Raises Tangible Property Expensing Threshold to $2,500,000 Simplifies Filing and Record Keeping

*Taken from the National Society of Accountants’ Newsletter*

The Internal Revenue Service today simplified the paperwork and recordkeeping requirements for small businesses by raising from $500 to $2,500 the safe harbor threshold for deducting certain capital items.  

The change affects businesses that do not maintain an applicable financial statement (audited financial statement). It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

The new $2,500,000 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.
"We received many thoughtful comments from taxpayers, their representatives and the professional tax community, said IRS Commissioner John Koskinen. "This important step simplifies taxes for small businesses, easing the recordkeeping and paperwork burden on small business owners and their tax preparers."

Responding to a February comment request, the IRS received more than 150 letters from businesses and their representatives suggesting an increase in the threshold. Commenters noted that the existing $500 threshold was too low to effectively reduce administrative burden on small business. Moreover, the cost of many commonly expensed items such as tablet-style personal computers, smart phones, and machinery and equipment parts typically surpass the $500 threshold.

As before, businesses can still claim otherwise deductible repair and maintenance costs, even if they exceed the $2,500 threshold.
The new $2,500 threshold takes effect starting with tax year 2016. In addition, the IRS will provide audit protection to eligible businesses by not challenging use of the new $2,500 threshold in tax years prior to 2016.

For taxpayers with an applicable financial statement, the de minimis or small-dollar threshold remains $5,000.


If you have any questions or concerns about the above the new requirement, please don’t hesitate to reach-out and contact us at (315) 258-8780.

End Of Year Hustle & Bustle

As we all know, the busy holiday season is filled with responsibilities. You have shopping, cooking and travel plans to pull together and execute – and this is just your personal responsibilities.  

When it comes to your business, you have just as many responsibilities – if not more this time of year.  Believe it or not, it’s time to start thinking about the following:    

                1099s                                     W-2s                      1094s & 1095s

These are only the basic employee forms that need to be printed and distributed to employees and/or subcontractors.  These are items that we may have processed for you in years past.  If you would like us to continue processing them, please just let us know.

This year the W-2s and the 1094s and 1095s all need to include the medical benefit information.  Depending on the size of your company, this could be a pretty intense process. 

NOW is the time to make sure that your employee’s social security numbers and addresses are all correct.  An incorrect address could cause a delay in your employee getting their W-2.

If you have any questions, we are here to help.  Start 2016 off on the right foot, contact us for any assistance that you may need to be able to enjoy your holiday season and to lighten some of your work load.

2015 is almost over. So what do I need to file this year?

If you are confused about Obamacare, you are not alone.  Just when you think you understand the rules and the new reporting procedures, something changes.  We hope this article helps to eliminate some of the confusion for you.

If you are a small business that employs less than 50 full-time employees, including full-time equivalent employees on average during the year, then you may be exempt from this reporting.  However, if you are a small self-insured employer, then these reporting requirements also apply to you.  So first, ask yourself these 2 questions:

 Do I have more than 50 full-time equivalent employees?

 Am I a self-insured employer?

If you answered NO to both of these questions, then you will have no additional reporting requirements for 2015.  If you answered YES to one or both, please read on.

Starting for 2015, not only will the employer have to file W-2s, but they will also need to report a 1095B or a 1095C for each applicable employee.  These forms are required if the employer offers an insured or self-insured group health plan or does not offer any group health plan.  In addition, small, self-insured employers will also need to file a 1095B to report employees and their family members who have coverage under the self-insured plan.

Employees will need to receive their copy by January 31st, the same date as the W-2 requirement.  For Tax Year 2015, we actually have until February 1st since January 31, 2016 falls on a Sunday. 

The penalties on failing to provide these forms to the IRS can result in a fine of $250 per return.

Custom Accounting Services has been attempting to get health care information from its payroll clients since the beginning of 2015 to help eliminate the end of the year scramble.  If you as an Employer have contributed to your employee’s health care or HSA benefits, please contact us today for reporting this information.  Some of you have been keeping us up to date, but some of you we have not heard from.

 Feel free to consult with our Human Resource Generalist at 315-258-8780.

What can I legally deduct from an employee’s paycheck?

Are you currently deducting the sale of your company’s products and services purchased by your employee from their paycheck?  Have you given your employee a payroll advance/loan and are currently deducting payments from their checks?  Are you sure this is legal?

As of November 6, 2015, Section 193 of the NYS Labor Law has been amended and clarified the meaning of deductions “for the benefit of the employee.” The deductions would benefit the employee by providing financial or other “support” for the employee, his or her family, or a charitable organization designated by the employee.  This “support” must fall into one of the following categories:

  •           Health and welfare benefits
  •           Pensions and retirement benefits
  •           Child care and educational benefits
  •           Charitable benefits
  •           Dues and assessments
  •           Transportation
  •           Food and lodging

As of November 6, 2015 the following deductions are no longer “authorized” from an employee’s wages:

  •          Repayment of loans, advances and overpayments that are not in accordance with the regulation
  •           Employee purchases of tools, equipment and attire required for work
  •           Recoupment of unauthorized expenses
  •           Repayment of employer losses
  •           Fines or penalties for tardiness, excessive leave, misconduct or quitting without notice
  •           Contributions to political action committees, campaigns and similar payments
  •           Fees, interest or the employer’s administrative costs

The changes to Section 193 of the NYS Labor Law will also change the way an employer may recover overpayments of salary due to mathematical or clerical errors and repayment of wage advances.  These deductions are still possible, but need to be handled in a specific way.  Feel free to consult with our Human Resource Generalist at 315-258-8780.

Employee or Subcontractor, how do I know which to classify a worker I am using?

The penalties for misclassifying an employee or a contractor can be very stiff.  If you are found to have “willfully” violated the Fair Play Act, you could be subject to civil penalties of up to a $2,500 fine per misclassified employee for a first violation and up to $5,000 per misclassified employee for a second violation within a five-year period.  You could also be subject to criminal prosecution for violations with a penalty of up to 30 days in jail and up to a $25,000 fine and debarment from Public Work for up to one year, and that is just for your first offense.

The New Standards for assistance with this question presumes that all workers for an employer are “employees” unless they meet all 3 of the criteria that have now been established. 

In addition to this standard, for all sole proprietors, partnerships, corporations and other entities, a 12-part test has been created to assist with determining if an entity should be considered “separate business entity” from the contractor for whom it is providing a service.  If an entity meets all 12 of the criteria, it will not be considered an employee of the contractor but instead will be considered a separate business that itself will be subject to the same criteria.

Last year, did you employee a worker as a subcontractor and wasn’t sure if that was correct?  Did you issue a 1099 for that person instead of a W-2?  

The time to issue 1099s and W-2s is just around the corner. Let the professional team at Custom Accounting Services clear up any confusion for you. 

Contact us today at 315-258-8780 for further information on how our team can be of assistance to you.

Employee Performance Reviews

Employee Performance Reviews can be one of the most painful part of managing employees.  Some managers may enjoy going to the dentist more than performing this part of their job.  But, why is this process so painful?  It is an extremely vital part of the company/employee relationship and when done correctly, it can make a company stronger.

First off, we have to make sure we have set the expectations of the employee that will be the basis of the review.  Secondly, we have to ensure we have explained the standards and guidelines we have put forth.  This should be done as part of the orientation process or whenever an employee switches positions.

Now that we know that is done, we need to outline how we want the review to work.  Most managers look at it as a counseling session and this is why it might be a dreaded task.  Performance reviews should be about the overall employee relationship.  View this as a discussion and not an integration.  Many companies will use forms and checklists so it becomes very formal and cold.  Be open and honest with the employee, as well as, ask for feedback about the company.  Also, ask the employee to give feedback about their own work.  What do they feel is rewarding?  Areas they may want more training?  Most important of all is close the meeting with a plan.  Review the review to make sure both employee and manager are on the same page.

Feel free to consult with our Human Resource Generalist at 315-258-8780.