July 1, 2015
Many of you may be aware that as of July 1, 2015, the Healthy Families Act of 2014 requires employers to provide a minimum level of paid sick days to all temporary, part-time, and full-time employees. All businesses, with very few exceptions, MUST pay this.
Employers are required to:
- Allow eligible employees to use accrued paid sick leave upon request or notification. Employers are not required to provide additional paid sick leave if they already have a sick leave or PTO policy providing an amount of leave that may be used for the same purposes and under the same conditions of the new law.
- Show the amount of sick leave hours available to an employee on a pay stub or a document issued the same day as the paycheck.
- Maintain records of accrued paid sick leave for three years. Returning employees are entitled to carry over unused sick leave for up to a year. The employer is not obligated to pay out unused sick leave at the end of a season or at the time of termination, resignation, or retirement.
There are two ways to handle employee paid sick leave. Please review the options below and determine which method is best suited to you.
- Accrual Method - Starting July 1, 2015 or first day of hire (whichever is later), employees will begin accruing 1 hour for every 30 hours worked, which calculates to .0333 per hour worked (regular and overtime hours apply). Employees are eligible to start using accrued sick pay once they have worked 90 days. Employers can limit the amount of sick leave an employee can take to a minimum of 24 hours (three days), per year. With this method employers must allow carryover to the next year, but can cap it at 48 hours (six days).
- Front Load Method - Starting July 1, 2015 or first day of hire (whichever is later), employees will get 24 hours (three days) of sick leave up front. Employees who have worked more than 90 days can start using sick leave immediately. Otherwise, new employees will have to reach 90 days worked before they can use sick leave. This method is considered a "use it or lose it" plan. Employers are not required to allow carryover to the next year.
As July 1st is quickly approaching, you will need to communicate the method you have selected with your payroll preparer to ensure that sick pay records are setup and tracked correctly. Also, please note that even if you already offer a sick pay policy, you may need to adjust it to remain in compliance.
The CalChamber has made available a paid sick leave checklist to help you through this process; a PDF copy it available to download from our website at this link.
If you have any questions regarding this topic, please don't hesitate to contact our office. One of our qualified Core Accounting Services Department staff members would be happt to assist you.
The government's sea of acronyms is enough to make anyone bored, but there is one acronym worth getting excited about: IC-DISC. IC-DISC stands for Interest Charge-Domestic International Sales Corporation, and it can be an ideal option for growers, manufacturers, or food processors that export overseas.
Never heard of it? Don't worry - you can still reap the benefits. An IC-DISC is a corporation formed in the United States that gives special tax treatment on sales of, or commissions on, qualifying export products. IC-DISCs are not subject to federal tax on export income, which can save businesses substantial amounts of money over time.
This type of corporation has its roots in the early 1970s, when Congress enacted DISC legislation to help encourage the U.S. export trade and shore up the economy by encouraging companies to stay on American soil.
Done correctly, an IC-DISC is a corporation on paper only, making it easy to set up and maintain. And the benefits may be substantial, according to Nate Miller and Jeff Bowman, Grimbleby Coleman CPAs and Partners. "An IC-DISC may reduce your business' federal income tax," according to Miller. "In fact, you may save approximately 8 percent of your net export income."
A properly set up IC-DISC will allow your business to pay commissions to the IC-DISC based on your export income - potentially up to 50 percent. That commission is not taxable and is considered a tax deduction, which can cut your regular taxable income.
With an IC-DISC, you'll then receive cash back in the form of a dividend, which will also be taxed at a reduced rate. In short, you could save money all around.
"Many growers in the Valley export overseas," Miller says. "For those growers, it's important to set up an IC-DISC as soon as possible - unfortunately, the tax benefits are not retroactive, so the savings from the establishment of an IC-DISC come only after the corporation is formed."
You may set up an IC-DISC even if you have an established partnership, S corporation, or LLC; in those cases, the IC-DISC will act as a subsidiary. IC-DISCs are slightly more difficult to set up if your business is a C corporation, but the benefits are still worth the trouble.
To setup an IC-DISC, Jeff Bowman, Ag Team lead, recommends beginning the paperwork in June, so it is completed by the start of the Fall harvest.
Establishing an IC-DISC is best left to a qualified certified public accountant. Our Grimbleby Coleman ag team has extensive experience helping growers and manufacturers save money through IC-DISCs. Please call Jeff Bowman or Nate Miller to learn more.
Upon earning her Associate of Science degree in Accounting and Business from Modesto Junior College, Tami began her career as a bookkeeper in 2005 and soon joined Grimbleby Coleman in 2006. She is currently a Core Accounting Services Supervisor with a focus on cloud-based accounting solutions utilizing software such as Intacct, Quickbooks and Bill.com. Tami is certified in both Intacct and Bill.com and in the last year alone, Tami assisted five clients with system conversions from outdated accounting software to Quickbooks. In her personal time, Tami enjoys staying fit by exercising with her husband and attending her son's baseball games on the weekends.
May 29, 2015
Cloud accounting is the modern method of financial management that lets users access their business financials from anywhere while using any device, as long as they are connected to the internet. The "cloud" is another name for "web-based", which means that both your software and data are "live" and always available to you. A few widely recognized software platforms are QuickBooks Online, Intacct and Bill.com.
In order to bring this new technology to small businesses, Grimbleby Coleman has developed a cloud accounting team, led by Lisa Mazza, CPA and a Principal in the firm. Part of the Core Accounting Services department, the "Cloud Team" provides tactical accounting services and cloud software assistance to help business owners improve their operations and financial reporting.
In addition to cloud support and strategy, the Core Accounting Services department also assists businesses by filling various roles, including outsourced Chief Financial Officer, Controller and Accounting Managers. Many businesses rely on outsourced accounting services to either launch or manage their cloud-based accounting systems - especially QuickBooks, Intacct and Bill.com.
As mentioned by Lisa Mazza, "Cloud accounting is a game changer for the business world and we've embraced the technology. Many of our clients are constantly on the move. If business owners are able to access their data on the go, simply with their phone - that's a huge benefit for them."
Top 4 Benefits of Cloud Accounting:
- Cash management - allows quick identification of cash sources and uses; management and approval of bill payments
- Ability to review actual financial reports - in real time
- Eliminates overhead such as an extensive network servers and dedicated I.T. personnel - the only requirement is an internet connection
- Cloud accounting software is always up to date - and is typically updated more frequently than packaged software
QuickBooks, and particularly QuickBooks Online, has evolved as the universally-recognized industry standard in small-business bookkeeping. It is one of the easiest accounting systems to use and is preferred by most small business owners and their accounting staffs. Additionally, there is an extensive list of plug-in options that are industry - and task - specific.
For most QuickBooks users, 0ur team recommends QuickBooks Online due to the ease of remote
access, constantly updated software and the ability for multiple users to easily use the account. Transitioning a client's books from the QuickBooks desktop version to the online software is a common task for our cloud accounting team. The team is also well-versed in moving clients from other software, such as Peachtree and Sage 100 ERP (formerly MAS 90 and 200), often because the businesses were looking for a more streamlined accounting process.
Intacct and Bill.com
Intacct and Bill.com are two other useful cloud accounting tools that many of our clients have come to rely on. Through Intacct, companies can take advantage of powerful reporting options that are 100% customizable, allowing for combined financials across multiple locations and entities. Its powerful inventory features are also particularly helpful for companies with multiple retail locations or businesses. It's a very cost-effective accounting option given the extent of the robust software.
Bill.com streamlines the bill-paying process for many small businesses. Our Bill.com experts can help companies with invoicing, billing, and accounts payable management. Bill.com synchronizes well with both QuickBooks and Intacct and lets owners remain in full control of a streamlined bill-paying process from anywhere...anytime. It also eliminates pesky manual work, such as signing and mailing checks, thanks to the online electronic payments option.
More About our Cloud Accounting Team
"We've created a software-knowledgeable culture in our firm through extensive training and by providing the tools and support necessary for our team to excel as experts in the online accounting area," explains Lisa. "By investing heavily in training, our team members are innovative, dependable resources for clients."
In the last two years, our Accounting Technicians have dedicated over 300 hours towards earning cloud accounting certifications across QuickBooks Online, Intacct and Bill.com. Tami Davis is our resident expert in Intacct and is certified in Bill.com. Karen Sanders, LeeAnne DeCosta, Carmen Gusman, Lisa Blanke and Elizabeth Hart have all earned QuickBooks Pro Advisor certificates. Amanda Cabral is a certified QuickBooks Pro, in addition to being certified in both Intacct and Bill.com.
If you are looking for a streamlined, real time accounting solution for your business, we strongly urge you to explore a cloud accounting solution. To learn more about the Core Accounting Services team, please click here.
May 8, 2015
These days, it's not just doctors and lawyers who are saddled with years of college debt. The average American college student graduates owing $28,400, according to the Institute for College Access and Success. How can recent college graduates possibly get ahead when they owe so much?
The government has a vested interest in keeping student debt low, and it has designed several tax incentives that can help keep expenses to a minimum. Read on to find out which one might be right for you or your family.
* The American Opportunity Tax Credit pays up to $2,500 per college student. Here's how it works: If your household makes less than $90,000 per year (or $180,000 if filing jointly), the government will credit the first $2,000 of your student's expenses and 25 percent of the next $2,000. The $2,500 credit is tax-free, too. The American Opportunity Tax Credit is the best option for many families, and it can be claimed for four years of schooling.
* The Qualified Tuition Program, or 529 plan, is ideal for people who are saving for college in advance. Parents or grandparents may contribute to - or even pre-pay - a student's education expenses. Here's the catch: The QTP is available only through eligible institutions, and students must be enrolled at least half-time to qualify. This option is also ideal for households that earn more than $180,000 and have the means to save money on a regular basis.
* The Lifetime Learning Credit is perfect for households earning less than $127,000 jointly (or $64,000 for single filers). You may be credited $2,000 per return, and you can claim the credit for as long as you or your student is in school. The Lifetime Learning Credit may also be applied to courses to acquire or improve job skills.
Three important additional reminders!
- IRAs can be withdrawn without penalty if used for education
- Series EE or I bonds qualify for interest income exclusion
- Interest paid on student loans is tax deductible!
Let the experienced accountants at Grimbleby Coleman help you find the solution that works best for you and your family. Call us today to begin planning your college payment strategy. To learn more about the American Opportunity Tax Credit, Qualified Tuition Program or the Lifetime Learning Credit, please visit the IRS website.