Affordable Help for Texas Identity Theft Victims

Identity theft victims have a new resource for recovering their identity and repairing their credit: www.idthefthelptx.com. The site provides a wealth of free resources as well as low cost form letters, checklists, and step-by-step instructions to guide victims through the recovery process. The website’s author, Paula Pierce, is a licensed attorney and passionate advocate for identity theft victims in Texas.

 

Most victims can repair their credit without hiring a lawyer – if they have instructions to follow. The website provides proven strategies victims can use along with forms and checklists to help organize the process. The road to identity theft recovery can be long and lonely. Texas victims now have a guide: www.idthefthelptx.com.

EX-CEO EXPLAINS WHY CORPORATE TAX CUTS DON’T CREATE JOBS

As a small business owner, I’ve always known it would take a mighty big tax cut to pay for me to hire additional help. For small businesses, tax cuts are never sizeable enough to defray the cost of a full-time employee. Interestingly, at least one CEO of a publicly traded company agrees. This Linked In article penned by David Mendels, former CEO of Brighthouse, was enlightening.

You can find the article here: https://www.linkedin.com/pulse/chief-economic-advisor-trump-most-excited-group-out-big-david-mendels/.

WHAT’S GOING ON WITH TAX REFORM

The tax reform bills proposed by the House and Senate contain some similar proposals, but the many differences warrant separate examination. While unknown compromises can be expected before any legislation hits the president’s desk for consideration, here are the highlights from both bills:

HIGHLIGHTS FROM BOTH BILLS
House Bill Senate Bill
Lowers corporate tax rate to 20% from 35% starting in 2018.

 

Eliminates common personal deductions: state and local taxes, personal property taxes, deduction for medical bills, unreimbursed business expenses.

 

Significantly reduces the mortgage interest deduction, and limits the property tax deduction.

 

Changes from 7 individual tax brackets to 4. People earning $500,000.00 to $1M a year get the biggest break. Some middle income earners would be bumped into a higher bracket.

 

Raises standard deduction to $12,000 for a single person and $24,000 for a married couple.

 

Eliminates personal exemptions completely. Currently, the personal exemption is $4050 per household member.

 

Raises child tax credit to $1600 from $1000.

 

Imposes a minimum tax on foreign investments of US corporations.

 

Gives an income tax deduction for income from some “pass through” businesses. Those are businesses that report income on Schedule C. Deduction is limited. Lawyers, engineers, consultants, and doctors cannot take the deduction.

 

Changes the capital gains tax structure.

 

 

Lowers corporate tax rate to 20% from 35% starting in 2019.

 

Eliminates common personal deductions: state and local taxes, property taxes, personal property taxes, home equity loan interest, unreimbursed business expenses.

 

Raises the income levels for personal income tax brackets and lowers tax rate for the highest income tax brackets. People earning $1,000,000.00 or more per year get the biggest break.

 

Raises standard deduction from $6350 to $12,000 for a single person. Child tax credit is raised to $1650 from $1000, but the dependent exemptions are eliminated completely.

 

Gives an income tax deduction for income from some “pass through” businesses. Those are businesses that report income on Schedule C. Deduction is limited to a % of the owner’s W-2 income. Lawyers, engineers, consultants, and doctors cannot take the deduction.

 

Excludes business income earned overseas. In other words, companies won’t have to pay US taxes on overseas earnings.

 

Imposes limited tax withholding on independent contractors.

 

Eliminates the 50% business entertainment deduction but keeps the 50% meals deduction.

 

Expands businesses that can use cash method accounting.

 

 

If you have concerns with how tax reform will affect your bottom line, talk to your accountant. The House is scheduled to vote on Thursday, November 16th, and the Senate plans to vote the week after Thanksgiving.  Elected officials want to know whether constituents favor or oppose these bills. Here’s a website that will give you the contact information for your elected representatives: https://whoismyrepresentative.com/.

REMINDER: VOTE!

Two signs indicating separate choices

Early voting began Monday for the November 7 election. What’s on the ballot:

  • 7 proposed amendments to the state constitution:
    • Property tax relief for partially disabled veterans and their spouses who acquired their homes for less than market value through charities;
    • Expands the ability of lenders to make home equity loans;
    • Limits the time an unpaid political appointee can serve when he or she is appointed by the governor;
    • Requires courts to give notice to the Texas Attorney General when a litigant challenges the constitutionality of a state statute and making courts wait 45 days before holding a statute to be unconstitutional;
    • Allows professional sports teams’ charitable foundations to hold raffles;
    • Provides property tax relief to spouses of first responders who are killed in the line of duty;
    • Permits financial institutions to hold prize contests to promote savings.
  • Travis County – $185 million in bonds to finance bike paths, sidewalks, road expansion projects, and a sports complex in Bee Cave.
  • AISD – $1.05 billion in bonds for building improvements and to build an elementary school in the Mueller development.

The League of Women Voters produces an excellent, non-partisan voter’s guide that can be accessed free on their website: https://lwvaustin.org/wp-content/uploads/2013/09/VG-2017-NOV-online-web-site-FINAL.pdf

Employer News: You Must Start Using the New Form I-9

Employers are required to keep an employment eligibility verification form (I-9) on each employee. The form documents the employee’s citizenship status and eligibility to work in the United States. In July, U.S. Citizenship and Immigration Services revised the form for use beginning September 18, 2017. The new form only applies to new hires; employers don’t have to fill out the new form for current employees.

Where is the new form? You can find the new form I-9 in English and Spanish as well as instructions here: https://www.uscis.gov/i-9.

What changed? The changes seem minor. The most significant change is that U.S. citizens born abroad can now use a Consular Report of Birth Abroad (Form FS-240) as proof of status. Minor edits were made to the form instructions.

Keep a copy of the completed I-9 in the employee’s personnel file. I-9 forms do not get filed with any state or federal agency.

Overtime Update

 

It seems a lifetime ago that the Department of Labor (DOL) announced changes to employee overtime rules that would raise the salary threshold for exempt employees.* The rule was to take effect on December 1, 2016. Many employees who had been exempt from overtime would be eligible for overtime pay under the new rule which raised the exemption threshold to $913 a week: $47,476 per year rather than the current $23,660. Employers scrambled to revise job descriptions and policies regarding overtime work to comply with the rule.

Twenty-one states file suit to challenge the new rule. On November 22, 2016, the U.S. District Court in Sherman, Texas granted the states’ motion to prevent the rule from taking effect. The DOL appealed the decision to the Fifth Circuit. Briefing was completed last month, and it appears that the DOL has abandoned the new salary level. Instead, the DOL is seeking information. On July 26, the Federal Register published a request for information posing 11 sets of specific questions for public comment. Questions include whether there should be multiple salary levels for exempt employees based on factors such as inflation, employer size, and census region; how setting different exemption levels for executive vs. administrative employees would affect businesses; and whether the exemption test ought to be based solely on the employee’s duties rather than salary. Comments are due by September 25, 2017. The questions and instructions for submitting comments are here. Anyone can submit a comment, and so far over 65,000 comments have been submitted.

What should employers do? Nothing for now. Now, we wait for the Fifth Circuit to issue an opinion.

See our previous blogs about the overtime rule: 11/29/16 – A Lump of Coal for Admin Employees? Texas Court Blocks Implementation of DOL’s Overtime Rule Change; 11/16/16 $47,476 the Magic Number – Are You Ready?; 10/10/16 – Time’s a Wastin’ – Get Ready for the new Overtime Rule; 5/27/16 – Holiday Gift for Salaried Workers: OVERTIME.

“Be Nice” Policies Employee handbooks revisited

Many employers want to include provisions in their handbooks requiring that employees be polite to each other and act with honesty and integrity. The National Labor Relations Board took the position that such provisions violated the National Labor Relations Act by discouraging employees from union organizing.

Yesterday, the 5th Circuit Court of Appeals clarified that these kinds of handbook provisions do not violate the law as long as a reasonable employee would interpret the policy as a common sense instruction to use professional manners, maintain a positive work environment, and be courteous.

Employers need not shy away from asking for civility in the workplace with a carefully crafted handbook.

The Court decision is Cause No. 16-60284, T-Mobile USA, Inc. v. NLRB, In the United States Court of Appeals for the Fifth Circuit, July 25, 2017.

Year-End Tune Up For Your Small Business


Ah, December . . .  It’s chock full of holiday parties, events, out-of-town visitors, and shopping.

It’s also when small business owners must get things in order for tax season.

It’s also a great time to take stock of the year that is ending and plan ahead for a successful new year.

Here’s a handy checklist to help you perform a year-end business tune up. No list is exhaustive, yet this list is still pretty long. Adjust it to fit your business needs.

Staffing:

Complete performance reviews for all employees and independent contractors.

Review your staffing needs and plan to add, subtract, or reorganize accordingly.

Review job descriptions for independent contractors to ensure they are truly contractors and not mischaracterized employees.

Review personnel files and update I-9s and W-4s as necessary.

Review employee benefits.

Policies & Procedures:

Review your employment policies and procedures to ensure they are up to date and comply with recent changes in the law.

Review your administrative and business policies and procedures to see whether they accurately reflect your current practices.

Sales & Marketing:

Compare your actual sales to your yearly goal.

Identify successes and areas for improvement in the areas of lead generation and conversion of leads to customers.

Adjust marketing plan to match your goals.

Quality:

Check customer satisfaction.

Review customer service policies and procedures.

Identify ways to improve the customer experience.

Financials:

Reconcile accounts.

Collect W-9s from contractors and vendors that need 1099s.

Review yearly journal or transaction entries for accuracy. Especially make sure that income and expenses are properly categorized.

Verify year-end accounts payable and accounts receivable.

Reconcile payroll including comparing taxes paid to payroll returns.

Prepare documents and files for your CPA or tax professional.

Run year-end reports such as a profit and loss statement, budget report, and balance sheet. Compare to last year’s reports.

Prepare next year’s budget.

IT:

Review IT policies and procedures.

If you collect personal information from customers, review your PCI compliance.

Train employees as necessary.

Install security patches, software, and operating system updates.

Consider getting a cybersecurity audit.

Goal Setting:

Review last year’s goals.

Review your long-term goals.

Set next year’s goals.

Adjust your business plan accordingly.

 

Finally, have a successful new year! 

 

A Lump of Coal for Admin Employees? Texas Court Blocks Implementation of DOL’s Overtime Rule Change

On November 22, Judge Amos Mazzant, of the Eastern District of Texas sitting in Sherman, issued a nationwide injunction blocking implementation of the highly-anticipated changes to the Overtime Rule. A group of 21 state attorneys general, including Ken Paxton of Texas, sued to block implementation of the rule which was slated to take effect on December 1.

The rule change would have raised the overtime exemption for salaried executive, administrative, and professional employees from $455 a week to $921 per week.

overtime-faq_645x400-1

In other words, administrative employees making less than $47,892 per year would have been entitled to overtime if they worked more than 40 hours in a week.

The court found that the Department of Labor (DOL) exceeded its statutory authority in issuing the rule change. The court’s decision is available on the Texas Attorney General’s website: http://tinyurl.com/zzdo4mw.

The DOL stated it is considering its legal options. It has not yet announced whether it will appeal the injunction to the 5th Circuit Court of Appeals. The DOL press release can be viewed here: https://www.dol.gov/WHD/overtime/final2016/.

As a practical matter, the ruling comes too late for most businesses.

The DOL announced the proposed rule change on July 6, 2015. The Department received over 290,000 comments to the proposed rule change. On May 18, 2016 the DOL released the final rule and warned the new rule would take effect on December 1.

Larger businesses adopted strategies for complying with the new rule months ago. Businesses that planned to comply and announced those plans to employees will hesitate to change course because of the cost of making changes at this late date, uncertainty whether the ruling will stand, and harm to employee morale.