Tag Archives: Homeowners Associations

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.


CITY OF PRESCOTT BUSINESS LICENSE REGISTRATION – MANDATORY AS OF 1/1/17

CITY OF PRESCOTT BUSINESS LICENSE REGISTRATION – MANDATORY AS OF 1/1/17

(passed May 2016)

Effective January 1, 2017, the City of Prescott is requiring anyone who engages in any business, occupation, or profession within the City to obtain an annual city business license.  This new requirement includes:  For-profit and nonprofit, home-based businesses, residential and commercial rentals, special event vendors and promoter/sponsors.  This also includes businesses located within the municipal limits of Prescott, and those that may be physically located outside of the limits but enter the city to engage in business activity.  If you have multiple locations, in the city limits, you will also need a separate license for each location.

The annual business license fee is $35 dollars with no proration. In addition, a $40 annual fire inspection will be required for all businesses located inside the Prescott City limits with the exception of home occupations and residential rental properties with less than three (3) dwelling units on one lot or parcel. License fees are paid online at the time of application.

There are additional fees for vacation rental and structured sober living homes which will be paid in conjunction with the business license application.

There are a few exemptions from the new ordinance that include schools, churches, governments, and employees of licensed businesses.

     For more information and to apply online, please visit the city’s  website at:

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

 

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. www.prescottaccountants.com


Non-Cash Contributions – Have your Documentation

From Western CPE

eTax Alert™

 

Court Shows No Charity in Disallowing $37,315 of Non-cash Contributions (Kenneth Kunkel, TCM 2015-71)

Kenneth and Susan Kunkel claimed a $37,315 charitable deduction for non-cash contributions on their 2011 tax return. The Kunkels claimed to have donated property to four organizations: their church, Goodwill, Purple Heart, and Vietnam Veterans. They had no receipts, photos, or other documentation for the contributions, but claimed that they didn’t need receipts because each donation was less than $250.

What documentation is required?

$250 or more. For all contributions of $250 or more, the taxpayer generally must obtain a contemporaneous written acknowledgment from the donee (§170(f)(8)).

Less than $250. “Separate contributions of less than $250 are not subject to the requirements of Subscribe Share Past Issues Translate §170(f)(8), regardless of whether the sum of the contributions made by a taxpayer to a donee organization during a taxable year equals $250 or more” (§1.170A-13(f)(1)).

$500 or more. Additional substantiation requirements are imposed for contributions of property with a claimed value exceeding $500 (§170(f)(11)(B)).

More than $5,000. Still more rigorous substantiation requirements, including the need for a “qualified appraisal,” are imposed for contributions of property with a claimed value exceeding $5,000 (§170(f)(11)(C). “Similar items of property” must be aggregated in determining whether gifts exceed the $500 and $5,000 thresholds (§170(f)(11)(F)).

What are “similar items?” The term “similar items of property” is defined as “property of the same generic category or type,” such as clothing, jewelry, furniture, electronic equipment, household appliances, or kitchenware (§1.170A-13(c)(7)(iii)).

The court categorized similar items from Kunkel’s list of non-cash items.

Clothing – $21,920
Books – $8,000
Furniture – $3,090
Household items – $1,653
Toys – $1,072
Telescopes – $800
Jewelry – $780

No appraisals and no receipts equal no deduction.
Clearly the clothing and book donations exceeded the $5,000 value and required appraisals to properly substantiate the deduction. All other categories exceeded $250 and required receipts. The court agreed with the IRS’s disallowance of all non-cash contributions.

Tax practitioner idea. Claiming a $6,000 contribution of “household goods” would require an appraisal. Claiming a $3,000 donation of furniture and a $3,000 donation of clothing would not. Categorize the donations carefully.

 

© Vern Hoven and Sharon Kreider 

Western CPE

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.


Document Retention and Destruction Policy

Many clients ask about record retention.  Click on the link below for a suggested record retention policy for non-profits, proposed by the AICPA.  It can be used by just about anyone that has business or non-profit organization records.

Not-for-Profit Document Retention Policy

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.

 


Latest News from IRS Regarding Homeowner Associations

The IRS recently posted this information regarding the tax-exempt status of Homeowners’ Associations.  There is often confusion between Non-Profit Status in the eyes of the Arizona Corporation Commission and in the eyes of the IRS.  Most homeowners associations will not be granted tax-exemption by the IRS, and are expected to file an 1120 or 1120H.  Click on the link below for more information:

TAX EXEMPT STATUS OF HOMEOWNERS’ ASSOCIATIONS

 

Schutte & Hilgendorf CPAs has over 20 years experience invested in the complex accounting and tax treatment of Homeowners’ Associations. We provide audit, review and compilations to homeowners association to help them meet the annual Arizona statutory requirement.  In addition, we provide tax planning and preparation services to Associations all year around.  Call us today to schedule your free initial consultation 928-778-0079.