Five Small Business Pitfalls to Avoid

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Businesses of any size are all born from one thing: The desire and drive to solve a problem. The entrepreneurs that started the business were full of fire, optimism, and had amazing momentum for achieving their goals at a rapid pace. At this speed, sometimes there are issues that pop-up unexpectedly, or potential disasters along the way that are easily side-stepped.

 

42% of small businesses fail because there was no real market need, while another 29% simply ran out of cash. Regardless of “why” and “how”, there is no shortage of data on how difficult it is to keep a small business running. And while everyone knows that facing challenges and speed bumps along the way is part of the process, it doesn’t make the learning or recovery process any simpler.

 

Here is our list of five business pitfalls to avoid in order to help your company grow stronger:

 

  1. Tax Blunders

For any business, tax season is all year long. Taxes, and avoiding tax blunders, should always be at the forefront of the employers’ mind. For example, always make sure to separate personal from business expenses accurately and properly. Filing taxes late could mean penalties or fees, which don’t come cheap. Most importantly, however, is making sure you are calculating employee payroll properly. Clearly understanding employee and payroll taxes is important. Not taking the time to do so could a series of consequences in motion.

 

  1. An Incomplete or Poorly Written Employee Handbook

A thoughtful and complete employee handbook should cover everything from paid time off and unexpected absences, to workplace conduct, social media, and sexual harassment. Pay special attention to state and local changing regulations to ensure the organization remains in compliance throughout the year when it comes to drug-related laws, background checks, and leave entitlement.

 

  1. Understanding Overtime
    There are a number of questions around overtime laws, including who is exempt, who is entitled, and if there are any penalties for small businesses. Covered, non-exempt employees are entitled to overtime pay. Exempt employees or those who are not required to be paid overtime include movie theater employees, salary employees, and farm workers, among others. Non-compliance means employers could be subject to penalties including back pay to impacted employees.

 

  1. Missing Documentation and Paperwork

As a new business gains momentum in the industry, it can be difficult to keep track of all the incoming documents and necessary records for future reference. The most important items to keep include receipts, bank statements, invoices, payroll records, or employment tax records. Some small businesses have reported losing their employer identification number (EIN) issued by the IRS. Try locating the EIN on the original application documents, the paperwork used to open a business bank account, or the forms used to file for any necessary state or local licenses.

 

  1. Getting Distracted

Building a business, client base, and brand takes lots of work and focus—it’s hard! But business owners can easily become distracted and taken away from the main focus of their mission and vision. Some of the main distractions to avoid are success envy and lack of organization, and social chatter. Entrepreneurs naturally will be aware of the success of others who have also just recently launched their business. Financial or business milestones can be inspiring…and create jealousy. A disorganized business owner is obvious from the client’s first interaction with them, in most cases. Customers need to know that the business can handle their needs without confusion or distraction.

 

As easy as it is to feel like things are running smoothly, it is important to keep a close eye on financial records and company data. Things can go quickly from feeling like they are perfect in considering what assets to offload in order to avoid closing the doors. Contact Vensure to get assistance in staying organized, focused, and ensure the bulk of the administrative work is not on the shoulders of the business owner.

 

 

 

Small Business Trends: Startup Statistics – The Numbers You Need to Know

State Minimum Wage Increases On The Rise

Almost every week there is another report on minimum wage increases. Awareness of these changes is important to every business, large or small. In recent months several states have increased their minimum wage, including Connecticut, Hawaii, Maryland, Michigan, Minnesota, Massachusetts, Rhode Island, and Vermont. A few of the upcoming minimum wage changes are listed below.

Connecticut
The new minimum wage law in Connecticut includes three annual wage rate increases. The first increase raises the rate to $9.15 on January 1, 2015, to $9.60 in 2016, and to $10.10 in 2017.

Massachusetts
On January 1, 2015, the minimum wage in Massachusetts will increase to $9.00 per hour, to be followed by an increase to $10.00 per hour on January 1, 2016 and $11.00 per hour on January 1, 2017. The law states the Massachusetts minimum wage law must always be at least $0.50 higher than the effective federal minimum wage rate.

Rhode Island
The third consecutive annual minimum wage increase for Rhode Island is effective on January 1, 2015 and will increase the current rate to $9.00 per hour. The increase allows Rhode Island to engage in competitive hiring with neighboring states.

Vermont
Minimum wage increases in Vermont are set to begin January 1, 2015, with the current rate rising to $9.15 per hour. Additional annual increases will go into effect beginning January 1, 2016 with the rate increasing to $9.60 per hour, followed by $10.00 per hour in 2017, and $10.50 per hour in 2018. Starting in 2019, the Vermont minimum wage will annually increase by 5% or the Consumer Price Index percentage increase. The amount used will be determined by which of the two percentages is the lowest. Beginning January 1, 2015, employees receiving tips as a portion of their wages, must be paid a minimum of one-half the state minimum wage.

Additional Minimum Wage Increases
Presently, several state wage laws include annual minimum wage increases, effective on the first day of January. The Consumer Price Index is typically used to determine the rate increases. State labor departments normally announce the new wage rate in October for the following year.

You can keep on top of all changes in minimum wage laws applying to your business by checking the state government web sites for each email notifications and other important wage law information available for employers. Look out for email notifications from Vensure regarding these changes as well.

State Taxes and PEO Reporting Mysteries Uncovered

Tax administration can be a complicated topic, to say the least. As such, we decided to take an opportunity and concentrate on some of the highlights, as well as provide an overview by state. We hope that this brief overview of PEO reporting and tax administration helps to answer many of the questions that you may have in this ever changing world.

Federal Taxes

Withholding, FICA, OASDI and Unemployment

Reported and paid under VenSure’s account number.

State Taxes

State tax administration is not quite as cut and dry as Federal taxes are. Each state falls in one of a few categories for VenSure clients: PEO reporting, Client reporting or hybrid reporting.

PEO Reporting

Reported and paid under VenSure’s account number and rate.

Client Reporting

Reported and paid under the Client’s account number and rate.

Hybrid Reporting

Reported and paid under the Client’s account number with VenSure’s rate. Most states will require additional forms to be completed to transition to this reporting type, please refer to the overview by state for the forms/links.

Online Access

It is very important to note, VenSure requires online access to client’s accounts for any Client or hybrid reporting states. Clients are to provide a log in or agent authorization access to be processed in order to pay and file their taxes.

To Set Up Online Access

Review the overview by state and follow the instructions provided by the state.  If you need assistance logging in or setting up a new account, please contact the corresponding state.

Copies of Tax Returns

Federal and PEO Reporting States

Since the taxes are filed under VenSure’s account number, all clients are combined into one tax return. Because of this, we are unable to supply individual returns; however, we ARE able to provide a system generated report showing the tax liability by client.  Please send an email request to taxes@vensure.com, and we will forward a copy to you.

Client and Hybrid Reporting States

These returns are filed under your individual account numbers, therefore, you are able to pull copies of tax returns and payment information by logging into your state unemployment account online.

As always, should you have additional questions regarding this subject, please feel free to contact us at taxes@vensure.com.

How to Obtain Past Year(s) W-2 Forms from the IRS

NOTICE: We have mailed out W-2s, and you should be receiving them shortly.

Some business transactions require that you show past and present proofs of income. Your W-2s come in handy at this time because they show your wages earned and taxes paid while you were working for specific employers. The Internal Revenue Service recommends that taxpayers keep copies of past W2s for as long as possible. However, things happen and sometimes documents go missing. If you’re missing W-2s from previous years, try to get copies from the respective employers. If that doesn’t work, learn how to get old W-2s from the IRS.

Order Transcript | Online or Phone

Use the IRS Order a Transcript application to view and print your transcript(s) immediately. You may also call the IRS self-service line at 1-800-908-9946 to order your transcript(s). If you order by phone, follow the prompts and select 3, then 1 to quickly complete your order. Once you get your transcript order form, complete it, sign it and send it to the address listed in the instructions. This printout will not include W-2 or state and local information. In addition, you cannot use the online method if you want the transcript sent to an address that is different from what the IRS has on file for you. Give the agency 5-10 business days from the time they receive your signed request.

Order Transcript | Form 4506-T

Request a free transcript from the IRS by filling out Form 4506-T. This method is effective if you want the transcript sent to a different address than what the IRS has on file for you. Include your personal data on the form, such as name, address and Social Security number. On line 6, enter tax form number “1040.” Then, check line 8 to ask for the transcript. On line 9, put the W-2 year(s) that you need. You may request up to four years of prior W-2s on one form. If you need more data, fill out another 4506-T. Mail or fax the 4506-T to the address or fax number that corresponds with your resident state. This information is included on the form.

Request Copy of Actual Transcript | Form 4506

Fill out Form 4506 to request an exact copy of a previously filed and processed tax return from the IRS. This method gives you photocopies of your W-2 attachments for the tax year(s) in question. The W-2s also include state and local information if you were subject to those types of withholdings. You may request up to eight years of tax returns on one form. For more than 8 years, you must attach another Form 4506. At the time of publication, a fee of $50 applies to each tax return you request. Mail the form and your payment to the address listed on the form. Allow up to 75 calendar days to process your request.

Considerations

The IRS provides W-2 transcript information for up to 10 years and copies of tax returns for up to seven years. W-2 data for the present year is not available until the following year after the document has been filed. For example, for tax year 2012, your employer files your 2012 W-2 with the Social Security Administration during the first quarter of 2013. Then, the information is sent to the IRS by the end of the second quarter of 2013. You may request the form from the IRS after they receive it from the Social Security Administration.

How to Obtain W-2s from VenSure

2013 W-2s have been mailed and are now available online. To obtain current and past W-2s online, go to HRP Web and click on Employee Inquires > W-2 Reprint > the year in question. As long as payroll was processed through VenSure, past W-2s will be available online.

State Minimum Wage Increases

Dear Valued Client,
Although federal minimum wage will stay the same, many states have announced increases. Effective January 1st, 2013 these states will be increasing the minimum wage:

  • Arizona to $7.80 per hour
  • Colorado to $7.78 per hour ($4.76 per hour for tipped employees)
  • Florida to $7.79 per hour ($4.77 per hour for tipped employees)
  • Missouri to $7.35 per hour
  • Montana to $7.80 per hour
  • Ohio to $7.85 per hour ($3.93 per hour for tipped employees)
  • Oregon to $8.95 per hour
  • Rhode Island to $7.75 per hour
  • Vermont to $8.60 per hour ($4.17 for tipped employees)
  • Washington to $9.19 per hour

Labor posters are automatically updated and mailed to you through our 3rd party vendor. Should you not receive your updated poster within 30 days of the effective date, please contact your Client Relations Manager for assistance.

Sincerely,
Vensure Employer Services

2014 Tax Reminder – NO ACTION NECESSARY

Dear Valued Clients,

As many of you are aware with the New Year, there are many changes/updates to federal and state tax laws and forms. Vensure is working to get the updated forms and information to our clients as it becomes available; however, not all forms and information regarding changes to laws are made available until well after the beginning of the year with retroactive effective dates. We will be updating the News section of our website to keep you informed of the latest compliance information, as well as sending E-blasts and updating the Client Center with the latest forms. Until such time, please continue to use the existing forms in the Client Center.

The New Year is a good time to have employees review their taxes and make any necessary changes. Please be sure to update HRP Web with any new employee information.

Sincerely,

Vensure

ACTION REQUIRED: W2 Reminder Notice

IMPORTANT REMINDER Regarding 2013 W-2s

Dear Valued Client,

We are fast approaching year-end and W-2 time for 2013. In order to ensure that W-2s are issued timely and accurately, we are requesting that you report to us any cash or non-cash items that have not been previously reported to Vensure through the normal payroll process that need to be included on employees’ W-2s. Examples of this may include, but are not limited to, third party sick pay, fringe benefits, and personal use of a company vehicle. Also, as of the 2012 tax year, the IRS requires the employer paid portion of group medical be included in box 12 of Form W-2. If you are contributing to your employees’ group medical, please provide the amount contributed to each employee’s health care cost. This is not a taxable event to the employee, however it is now required for informational purposes on the Form W-2.

Please consult with your Accounting Department or CPA to determine if any additional information needs to be reported on Form W-2 for 2013 that has not been previously reported to Vensure. We will need to receive this information no later than Friday, December 27, 2013 in order to prevent any penalties or fees for late filing. Any information received after this date will incur penalties and additional fees or may not be accepted.

Please feel free to contact your Payroll Representative or Client Relations Manager if you have any additional questions in regards to this notice.

Sincerely,
Robert Attridge
Vice President of Operations
Vensure Employer Services

New Form I-9 Now Available

New Form I-9 Now Available

The United States Citizenship and Immigration Services(USCIS) released a new Form I-9, Employment Eligibility Verification, on March 8, 2013.

When to use the new form

Employers could begin using the new Form I-9 as early as its release date of March 8, 2013; the USCIS is encouraging employers to use the new form immediately. However, the agency recognizes that employers – particularly those using electronic Form I-9 systems – may need some time to adjust to the new form. As such, employers have until May 7, 2013, to begin using the new form. After May 7, the two versions of the Form I-9 previously available for use (Rev. 08/07/2009 and Rev. 02/02/2009) will not be valid for use.

The most notable changes on the new form

The new form (which bears a revised expiration date of 03/26/2016) contains formatting changes, additional data fields, and expanded instructions. Employers will also notice a revised layout for the form. Aside from the additional guidance provided in the form’s instructions, some of the most notable changes include the following:

  • A two-page form
    The I-9 form itself went from a single page to two pages. Employers are required to retain both pages of the Form I-9 on which the employer and the employee enter information. Employers may copy the Form I-9 as a double-sided page to ease with retention, but it’s also a good practice to keep the Lists of Acceptable Documents with an employee’s Form I-9.
  • New email address & phone number fields
    New to Section 1, these fields are optional for employees to complete. The USCIS has indicated that these are meant to assist the government in contacting employees regarding verification of their employment status. Employees who prefer not to provide the information may enter “N/A” (for “not applicable”) in these fields.
  • A reworked employee attestation section
    This portion of Section 1 has been expanded to be much more prominent and provide more direction for employees. It also comes with additional fields to be completed by an employee who selects “an alien authorized to work until…”
  • A 3-D barcode
    Found in both Section 1 and 2, the 3-D barcode area is a placeholder for future technology to be implemented by the USCIS. This area is not the employer’s concern, but is for USCIS use only. Employers should not write in this space.

New forms not required for existing employees
Employers are not to complete the new Form I-9 for current employees (for whom there is already a properly completed Form I-9 on file). The revised Form I-9 should be used for newly hired employees and for any existing employees whose temporary work authorization requires re-verification.

Please note: With the new Form I-9, employers would be wise to designate an individual within their organization to be in charge of understanding and implementing the new Form I-9 requirements. In the meantime, the federal focus on Form I-9 audits and employer compliance continues, so employers would be wise to take this deceptively simple form seriously.

For access to the new form, please visit Vensure’s Client Center as current year tax forms are updated as they are made available by federal and state agencies.

Sincerely,
Vensure Employer Services

W-2’s – No Action Required

Dear Valued Client,

We have mailed out W-2’s, and you should be receiving them shortly. For copies of W-2’s, please log in to your HRP Web access, and go to Employee Inquires/W-2 Reprint.

Sincerely,
Vensure Employer Services

State Taxable Wage Base for 2013

Dear Valued Client,

As 2013 is merely next week, Vensure would like to share the following State Taxable Wage Base chart for 2013 and 2012 (for comparison).

Effective: January 1, 2013

We appreciate your business and look forward to the opportunity to serve you in the new year.

Kind regards,
Vensure Employer Services