Category Archives: Arizona Taxes

Arizona Minimum Wage Increase

As of January 1, 2019, Arizona has raised the hourly pay rate for minimum wage workers. Employers are required to pay employees at least the new minimum wage rate and post a notice in the workplace to inform employees of their right to the minimum wage.  Employers with employees who work in the City of Flagstaff, AZ have additional minimum wage requirements.

 

Arizona voters passed Proposition 206, or the Fair Wages and Healthy Families Act, in November of 2016. The law provides employees with earned paid sick leave and set up a series of scheduled increases to the minimum wage that began in January of 2017. Arizona will incrementally raise the state minimum wage to $12.00 per hour by 2020, after which it will rise relative to changes to the Consumer Price Index (CPI), which measures cost of living in the U.S.

 

Effective January 1, 2019, the minimum wage will increase to $11.00 per hour for non-tipped workers in the state of Arizona. The minimum wage for tipped workers is always set at $3.00 less than the general minimum wage, so in 2019 it will be set at $8.00 per hour.

 

Employers with one or more employees who work 25+ hours in the City of Flagstaff are required to pay a higher minimum wage and post the 2019 Flagstaff Minimum Wage Poster in addition to the state and federal minimum wage posters. Effective January 1, 2019, the municipal minimum wage for Flagstaff will increase to $12.00 per hour worked within the city.

 

Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona.   With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting.  We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors).  Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.

 

 

 

 


Schutte & Hilgendorf Individual Year End Letter

2018 Individual Year End Letter

 

 

With the end of the year fast approaching Schutte and Hilgendorf would like to remind you about tax matters and changes from the new tax law that you may want to consider in anticipation of tax season. Please click the title above in order to view the year end individual tax letter. Happy Holidays from everyone here at Schutte & Hilgendorf!

 

 

 

Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona. With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting. We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors). Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.


Schutte & Hilgendorf Business Year End Letter

2018 Business Year End Letter

 

 

With the end of the year fast approaching Schutte and Hilgendorf would like to remind you about tax matters and changes from the new tax law that you may want to consider in anticipation of tax season. Please click the title above in order to view the year end business tax letter. Happy Holidays from everyone here at Schutte & Hilgendorf!

 

 

 

 

 

 

Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona. With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting. We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors). Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.


Tax Tuesday with Inek Contreras


NEW IRS PROPOSED REGULATIONS DISALLOW FEDERAL DEDUCTION FOR ARIZONA TAX CREDIT DONATIONS

 

 

NEW IRS PROPOSED REGULATIONS DISALLOW FEDERAL DEDUCTION

FOR ARIZONA TAX CREDIT DONATIONS

 

The IRS issued proposed regulations (REG-112176-18) on August 23rd that will no longer allow a charitable deduction on the Federal tax return for the Arizona state tax credit donations made after August 27, 2018. This will apply to the Qualifying Charitable Organization, Qualifying Foster Care Organization, Public School, Private School Tuition Organization, Military Family Relief Fund and other tax credits in Arizona.

 

If you do not expect to itemize deductions under the new tax law, this will not have any tax effect on the contributions you would make. Thresholds for itemized deductions for 2018 are $24,000 for married couples filing jointly, $18,000 for head of house hold filers and $12,000 for single filers.

 

If you expect to itemize under the new tax law, the proposed regulations will reduce the deductions you are allowed to claim. We recommend making your Arizona tax credit donation payment before August 28, 2018 to be able to claim the charitable deduction on your 2018 Federal tax return. If you make donations in excess of your 2018 taxes, you are able to carryover the credits on your Arizona tax return for up to 5 years. Depending on your tax situation, it could be beneficial to make donations before August 28th in excess of your expected 2018 tax liability and carryover the remaining credit to future years, to be able to claim the maximum deduction for those donations on your 2018 Federal tax return.

 

In light of this new regulation, the tax credits can still be a great opportunity to redirect your tax dollars and possibly receive a dollar for dollar offset for your contributions. But you will no longer receive the double benefit of the Arizona tax credit and the Federal tax deduction after August 27, 2018.

 

If you have questions, please talk to your tax advisor, or Schutte & Hilgendorf, CPAs.

 

Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona.   With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting.  We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors).  Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona, call us at 928-778-0079 or check out our website at www.prescottaccountants.com.

 

 

 


Tax Exempt Organization Search Tool

Verify the Status of a Charity before you Make a Donation:

 

If you have found the charity you feel deserves your hard-earned money, but you are uncertain of the legitimacy of its charitable status, it is best to do a little research.  Some donations made to “charities” are non-deductible due to the organization’s lack of “charitable organization” status with the IRS.  IRS now has a tool to help you determine if your donation will indeed be deductible.  Following is the latest press release for IRS’s new search tool:

New Tool Provides More Information About Exempt Organizations

 

The IRS launched a new tool on IRS.gov that gives taxpayers fast and easy access to information about exempt organizations. The new Tax Exempt Organization Search replaces the EO Select Check tool.

Here are some things taxpayers will find when they use the new TEOS tool:

  • Images of an organization’s forms 990, 990-EZ, 990-PF and 990-T filed with the IRS. Initially, only 990 series forms filed in January and February 2018 will be available. New filings will be added monthly.
  • More information about exempt organizations than was previously available using EO Select Check.
  • A simplified search process.
  • TEOS is mobile friendly, which provides access to the search tool using smartphones or tablets.
  • Users can access favorable determination letters. These are issued by the IRS when an organization applied for and met the requirements for tax-exempt status. At first, a limited number of determination letters will be available. Eventually, determination letters issued since January 2014 will also be available.

Taxpayers can also use TEOS to find information previously available on EO Select Check. This includes whether an organization:

  •  Is eligible to receive tax-deductible contributions.
  • Has had its tax-exempt status revoked because it failed to file required forms or notices for three consecutive years.
  • Filed a Form 990-N annual electronic notice with the IRS; this applies to small organizations only.

Publicly available data from electronically-filed 990 forms is still available through Amazon Web Services.


New Mandatory Sick Leave Under Prop 206 – Arizona law Effective July 1, 2017

REMINDER: Check your paid-time-off policies to include the new requirements under Prop 206:

In addition to the increased minimum wage in Arizona,the less publicized part of Prop 206 is the requirement for private and municipal employers to provide paid sick leave to all employees beginning July 1, 2017. Under Prop 206, all employees must accrue paid sick time at a minimum rate of one (1) hour of paid sick time per every thirty (30) hours worked (not confined to a work week or pay period). Employers with less than fifteen (15) employees, must provide and allow the use of twenty-four (24) hours of paid sick time per year, while employers with fifteen (15) or more employees must provide and allow the use of forty (40) hours of paid sick time a year.

Under Prop 206, earned paid sick time may be used by employees for the following reasons:

  • Employee’s own physical or mental illness;
  • Care for employee’s family member who has a physical or mental illness;
  • Public health emergency;
  • Absence due to domestic violence, sexual violence, or stalking of employee or employee’s family member

Implementing mandatory paid sick time may present challenges to employers given the many nuances of Proposition 206, including:

  • Part-time and temporary workers are considered “employees”
  • Employers must post a notice in the workplace that outlines employees’ rights and protections under Prop 206
  • Employers are required to retain payroll records for four (4) years
  • Employers must also provide employees either in or on an attachment to the employee’s paycheck: (1) the amount of earned paid sick time available to the employee, (2) the amount of earned paid sick time taken by the employee to date in the year, and (3) the amount of pay time the employee has received as earned paid sick time
  • Employers can require reasonable documentation from an employee after three (3) or more consecutive work days of paid sick time used
  • Employees may use earned paid sick time as soon as it is accrued; however, an employer may require an employee hired after July 1, 2017 to wait ninety (90) calendar days after the start of employment before using accrued earned paid sick time
  • Employers can include accrual and usage caps on paid sick time in accordance with the mandatory requirements
  • Paid sick time can be used in hourly increments or the smallest increment of employer’s payroll system used to account for absences or use of time, whichever is smaller
  • Employers cannot require employees seeking to use earned paid sick time to find a replacement worker to cover the employee’s absence
  • Employers cannot count the use of paid sick time as an absence that leads to discipline or termination
  • Employers are not required to pay out unused paid sick time upon termination

For further information, contact Schutte & Hilgendorf, CPAs at 928-778-0079.

Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona.   With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting.  We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors).  Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.


Prescott becomes a Program City for Arizona Sales Tax

All Prescott and other cities’ sales taxes will now be reported and paid through the State of Arizona.

Effective January 1, 2017, the Arizona Department of Revenue (ADOR) will become the single point of administration and collection of transaction privilege tax (TPT).  Your sales tax return that is due in February will be the first required return to be filed using the new method.  The link for details on the new requirements for reporting sales tax is:  https://www.azdor.gov/News/tabid/74/newsid530/732/Centralized-Licensing-and-Reporting-of-Transaction-Privilege-Tax-TPT-Begins-Jan-1/Default.aspx?utm_medium=email&utm_source=govdelivery

The Arizona licensing fee was due on January 1, 2017.  If you have not renewed your license, you should log onto the aztaxes.gov website and renew.  Information on how to do this may be found at this link:   https://www.azdor.gov/Portals/0/TPTSimplification/license_renewal_fs.pdf

The City of Prescott requires a business license and registration with the city in addition to the required registration with Arizona/Prescott for a sales tax license.  Additional information on this can be found at this webpage:

http://www.prescott-az.gov/business/license/

Residential & Commercial Rental owners have had their license information submitted to the State of Arizona by the City of Prescott for processing.  Owners will receive a letter from the State containing the new Arizona license number and instructions on how to obtain an online account.  Further information from the City of Prescott for commercial and residential landlords and how to register with the state can be found at:  http://www.prescott-az.gov/_d/residential_and_commercial_rental_tips.pdf

Additional information on licensing for Arizona can be found at:  https://www.azdor.gov/Business/LicensingGuide.aspx

 

For additional information, contact Schutte &  Hilgendorf at 928-778-0079

Schutte & Hilgendorf, CPAs offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona.   With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting.  We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors).  Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.


2016 Changes to Arizona Tax Credits

 

Two Arizona bills (SB1216 and SB1217) have made significant changes to the Qualifying Charitable Organization and Foster Care Charitable Organization tax credits for 2016.

 

The allowable credit made to Qualifying Charitable Organizations has increased from $200 to $400 for individuals and from $400 to $800 for married couples.  The allowable credit made to Foster Care Charitable Organizations has increased from $400 to $500 for individuals and from $800 to $1,000 for married couples. These credits are now independent of each other.  Contributions for one of the credits will no longer affect the allowed credit to the other.

 

The deadline to make the contributions for the credits has been extended to April 15th of the subsequent year.  All of these changes were made after and are retroactive to January 1, 2016.

 

If you have any questions about these changes or any other tax questions, please give us a call at 928-778-0079.

 

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting. We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


Protect Yourself From Tax Identity Theft

Tax identity theft continues to rise.  In 2013, $6.5 billion in fraudulent returns were filed.  By 2016, that number is expected to increase to $21 billion.  To make matters worse, it can take several months for the rightful taxpayer to straighten out the confusion.  You can protect yourself by being aware of one of the key ways fraud is initiated–through email.  the IRS NEVER uses email or social media to contact taxpayers directly, so you should never respond to a message from the “IRS” addressing tax concerns via email.

Schutte & Hilgendorf is committed to protecting our clients’ records and follows several security measures to ensure that sensitive data are carefully guarded.  We can help if you have questions about any type of correspondence or request you received involving tax information.

If you have additional questions about this post or any other, please contact us directly at 928-778-0079.

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting.  We are located in Prescott and serve all of Yavapai County, and Northern Arizona.