Tag Archives: QuickBooks consulting

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.


2017 Standard Mileage Rates

From the IRS website:

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.   The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

 

Go to the following link for more information:

 

2017 Standard Mileage Rates for Business, Medical and Moving Announced

 

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.


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.


Non-Profit Guidance for New DOL Overtime Rules

There has been an important update on the new DOL Overtime Rules that were set to go into effect on December 1st. Yesterday a U.S. District Judge issued an injunction against the new rules. This means that the new overtime rules will not go into effect on December 1st. The injunction stops implementation or enforcement of the new  rules until further action is taken by the Department of Labor, most likely through appealing the ruling. At this point it is uncertain when, if ever, the new rules will go into effect.

 

We will keep you apprised of any new developments. Please check our website as well for any updates. Contact us if you have any questions about how this will affect your business.

 

Many of our clients have asked for information pertaining to the new Department of Labor rules for overtime, especially as they pertain to the not-for-profits.  The link below takes you directly to Q&A excepts from the Department of Labor’s webinar for the not-for-profit sector.

 

https://www.dol.gov/whd/overtime/final2016/webinarfaq_np.htm

 

Even if a non-profit only engages in non-commercial, charitable operations, the Individual Coverage test may apply to specific employees because of their duties.

 

Examples:

Q1:  How does an employer handle an employee who works part time doing business enterprise and part time charitable enterprise? Is overtime only required when an employee passes 40 hours of enterprise work in a week?

 

A1:  There are two ways that an individual employee may be covered under the Fair Labor Standards Act (FLSA) and entitled to its protections: individual coverage and enterprise coverage.

 

A nonprofit organization is not considered a covered enterprise under the FLSA unless it engages in ordinary commercial activities that result in sales made or business done that meets the $500,000 threshold. If an nonprofit meets this threshold, its employees are covered by the FLSA and entitled to overtime for work performed over 40 hours a week regardless of how the employee spends their time.

 

Even if a nonprofit organization is not covered on an enterprise basis as described above, it may have individual employees who are covered individually and therefore are entitled to the FLSA’s protections. An employee who engages in interstate commerce or in the production of goods for interstate commerce or in the protection of goods for interstate commerce is covered by the FLSA and is entitled to overtime pay for time worked over 40 hours in a week.

 

Q2:  So we have a Special events position that makes donation requests to sell at our annual basket auction fundraiser. If any of those requests will be made or received from across state lines she would be individually covered even if we don’t earn $500,000 in sales revenue as an agency? She would be covered because of the Individual test?

 

A:  Generally, employees who make phone calls across state lines are individually covered under the Fair Labor Standard Act (FLSA). For further assistance with coverage principles under the FLSA, please refer to Fact Sheet #14 at:

 

https://www.dol.gov/whd/regs/compliance/whdfs14.pdf

 

or contact your nearest WHD district office at:

 

https://www.dol.gov/whd/america2.htm

 

 

We also found this article, provided by the National Council of Non-Profits to be informative:

 

https://www.councilofnonprofits.org/trends-policy-issues/overtime-regulations-and-the-impact-nonprofits

 

As always, please don’t hesitate to call us at 928-778-0079 with your specific questions about these rules and how they apply to your Organization.

 

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.


Overtime rules for Business Owners

There has been an important update on the new DOL Overtime Rules that were set to go into effect on December 1st. Yesterday a U.S. District Judge issued an injunction against the new rules. This means that the new overtime rules will not go into effect on December 1st. The injunction stops implementation or enforcement of the new  rules until further action is taken by the Department of Labor, most likely through appealing the ruling. At this point it is uncertain when, if ever, the new rules will go into effect.

We will keep you apprised of any new developments. Please check our website as well for any updates. Contact us if you have any questions about how this will affect your business.

Since the release of the new overtime regulations from the Department of Labor, we have received many questions from our business clients. One reoccurring question we would like to address is how/if the new overtime rules will affect the business owner’s salary. An employee who owns at least 20 percent equity interest in the enterprise in which they are employed and who is actively engaged in its management is not subject to the salary level requirements of the overtime regulations. This rule applies to LLCs, Partnerships, S Corporations, Corporations or any other entity type. Because of this, the final rules recently released should not have an effect on business owners who own 20 percent or more of their company. Any owners who own under 20 percent would have to apply the standard overtime tests and requirements. If you have any questions about your specific situation, 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.


DOL Final Overtime Rules Presentation

There has been an important update on the new DOL Overtime Rules that were set to go into effect on December 1st. Yesterday a U.S. District Judge issued an injunction against the new rules. This means that the new overtime rules will not go into effect on December 1st. The injunction stops implementation or enforcement of the new  rules until further action is taken by the Department of Labor, most likely through appealing the ruling. At this point it is uncertain when, if ever, the new rules will go into effect.

We will keep you apprised of any new developments. Please check our website as well for any updates. Contact us if you have any questions about how this will affect your business.

Thank you for attending the seminar on the new DOL Final Overtime Rules.  We’ve attached (in blue below) our presentation to the website for you and those that were not able to attend.

Below in green is a link to the Department of Labor’s fact sheets. These can be very helpful if you have questions about a particular industry or type of employee.

 

https://www.dol.gov/whd/fact-sheets-index.htm

 

DOL Final Overtime Rules Presentation

 

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.


Mandatory Rules for Overtime Pay Have Changed

There has been an important update on the new DOL Overtime Rules that were set to go into effect on December 1st. Yesterday a U.S. District Judge issued an injunction against the new rules. This means that the new overtime rules will not go into effect on December 1st. The injunction stops implementation or enforcement of the new  rules until further action is taken by the Department of Labor, most likely through appealing the ruling. At this point it is uncertain when, if ever, the new rules will go into effect.

We will keep you apprised of any new developments. Please check our website as well for any updates. Contact us if you have any questions about how this will affect your business.

On May 18, 2016, President Obama finalized the Department of Labor’s new rule updating regulations regarding overtime compensation for salaried employees. Starting December 1, 2016 any salaried employee paid under $47,476 must be paid overtime for working more than 40 hours in a week. Non-discretionary bonuses and incentive payments can be included, up to 10%, in the salary calculation. Please contact us if you have any questions or see the link below for more information from the Department of Labor.

 

https://www.dol.gov/whd/overtime/final2016/index.htm

 

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.


INCREASE IN PENALTIES FOR FAILING TO FILE AN INCOME TAX RETURN

On February 24, 2016, President Obama signed a new law banning income taxes on Internet Services.  This law also included a provision increasing the penalty for failing to file a tax return.

 

The higher failure-to-pay penalty is effective for returns to be filed after calendar year 2015, so it applies to this tax return season.  The penalty is equal to 5 percent of the amount of additional taxes owed for every month that your return is late, up to a maximum of 25 percent.

 

Remember there are 2 penalties:  A failure-to-file penalty AND a failure-to-pay penalty.   If you have a balance owing it is always better to file the returns timely and pay when you can or set up an Installment Agreement Payment Plan with the IRS.  You can also pay your tax balance by credit card.

 

Filing an extension ONLY delays filing the return.  If you owe tax, the tax must be paid by April 15 to avoid a failure-to-pay penalty.

 

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.

 


Tax-Exempt Church Schools – Frequently Asked Questions

As we enter tax season, important questions that have been in the back of our minds for the past year float to the surface.  Attached is an article from the American Institute of Certified Public Accountants (AICPA) addressing frequently asked questions regarding Tax-Exempt Church Schools that we would like to share with our clients.  As the season progresses, we will share these frequently asked about topics and other important accounting and tax issues as they arise, so stay tuned…..

Tax Exempt Church Schools FAQs

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.


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.