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Family and Medical Leave Act: How It Works

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Nitya LLC - Family and Medical Leave ActThe Family and Medical Leave Act was designed to help your employees take the time necessary for qualifying medical and family reasons. Click through to see how FMLA affects your business and how to implement best practices.

FMLA was established in 1993 to protect workers who needed to take time off from their jobs for their own medical issues or those of closely related family members. The act provides up to 12 weeks of unpaid leave for personal or family reasons that must meet qualifying criteria. How does FMLA affect your business? Let’s take a closer look.

  • Job protection. Any employees who take time off afforded to them by FMLA must have their jobs protected during the time-off periods. They may not be terminated while on leave and may return to the same positions they were in before they left. If those jobs are not available, they must be placed in comparable positions with the same salary, benefits and seniority.
  • Provisions for eligible workers. Employees are also eligible for additional provisions from their employers including continued group benefits with the same contributions from the company. Employees must not be denied FMLA or fear retaliation from their employers if they elect to take this time off for their own or a family member’s care.
  • Nonqualifying employees. However, not everyone is eligible for FMLA. Companies with fewer than 50 employees do not meet the requirements for offering leave. Part-time workers who have not worked enough hours within a consecutive 12-week time frame prior to the need also do not qualify. Regarding elder care, it is only available for parents. And caring for pets is not considered an FMLA-protected event.
  • State-by-state qualifications. Some states have dropped the employee threshold for FMLA. For example, Oregon uses 25 employees as its cutoff for organizations that do not have to provide leave protection. Other states have expanded the definition of family to include such categories as domestic partners, such as in Maine and California. Some states, like Connecticut, offer FMLA for individuals donating bone marrow or an organ.

Have you recently reviewed your policies to ensure that you are compliant under FMLA?

Start planning your tax strategy today by calling 301-728-0808 now or request your free consultation online and we’ll contact you to discuss how we can reduce your tax burden.

The Life of an Estimate in QuickBooks Online

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Nitya LLC - QuickBooksEstimates—or quotes, or bids—are useful tools when you’re pitching a sale of products or services. Here’s how QuickBooks Online handles them.

Sales estimates are standard procedure in many professions. You wouldn’t authorize a car repair without one. Nor would you OK a remodeling job on your kitchen or a summer’s worth of yard landscaping without knowing what the costs will be upfront.

Estimates don’t have to be formal documents. You could scribble a proposal for products or services and their prices on a paper napkin and have your customer sign it. But as we’ve said before, the quality of your sales documents reflects on your company’s professionalism as well as its image.

QuickBooks Online offers specialized tools to manage this step in the selling process. You can create detailed estimates that the site can easily convert to invoices when you get an approval. And QuickBooks Online reports help you monitor the progress of your quotes. Here’s how it works.

A Dedicated Form

You probably already know how to create an invoice. If so, you shouldn’t have any trouble generating estimates because the forms are very similar. To get started, click the + (plus) sign in the upper right corner of the screen. In the Customers column, click Estimates. A form like this will open:

QuickBooks Online provides a form template for your estimates.

Open the drop-down list in the Customer field and select the correct one (or +Add new).

Note: If you click on +Add new, you’re only required to enter your prospective customer’s name to create an estimate; contact detail, of course, will not appear on the form. You can go back later and complete a customer record, but it’s best to at least enter a physical and email address. Click +Details to open the complete record, then save what you provide there.

The word “Pending” should appear below the Customer field. This refers to the status of your estimate. Click the down arrow to the right of it, then on the down arrow in the small window that opens to see what options you’ll have later. If you want to copy someone else on the estimate, click the small Cc/Bcc link to the right and provide the email address(es).

Enter (or select by clicking on the calendar graphic) the Estimate date. If your offer is only good for a limited period of time, enter an Expiration date; otherwise, leave that field blank. Then go down to the Product/Service grid and select the items for which you’re providing an estimate, one on each line. Fill in the Qty field and check the labeled box if the item is taxable.

If you had created a product record for it already, the other fields should be completed automatically. If not, click +Add new. The Product/Service information pane should slide out from the right side of the screen. Here again, you’re only required to enter a Name, but you should really create the whole record and save it to return to the estimate. If you’ve not been through this process before, we can walk you through it.

You can add a discount to the estimate as either a percentage or a dollar amount in the lower right corner of the screen. You can also edit the customer message that appears in the lower left and attach any files necessary. When you’re done, save the estimate.

Estimate Options

You can work with your estimate from the Sales Transactions screen.

If you’re not already there, click the Sales link in the left vertical toolbar, and then the All Sales tab and the Estimates bar. Find your estimate and look at the end of the row, in the Action column. If you want to convert your estimate to an invoice, click Create invoice. In the window that opens, indicate whether you want to invoice:

  • A percentage of each line item,
  • A custom amount for each line, or,
  • The total of all lines.

Look over your invoice when it opens, complete any other fields necessary, and save it. Your estimate’s status has now been changed to Closed, and the new invoice created from it will appear on the Sales Transactions screen. It will also be included in the Estimates By Customer report.

If you can create an invoice, you can create an estimate. The tricky part comes in when you have to amend an estimate before you bill it – or even alter it and resubmit it. If you’re going to be working with estimates extensively, let us help you get it right from the start.

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Does your business ever provide estimates (bids, quotes, etc.) to customers? QuickBooks Online can help you create them.

Did you know that you can add a discount when you create a customer estimate in QuickBooks Online? Ask us about this.

QuickBooks Online can convert an estimate to an invoice with one click, but amending before sending it can be tricky. We can help.

Did you know that QuickBooks Online contains an Estimates By Customer report, so you can easily keep track of their status? Call us at 301-728-0808 to get started now or request your free consultation online.

How Do You Handle Multistate Taxes?

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small business meetingNo matter where your company is headquartered, there’s a good chance you conduct business across other state borders. How do taxes work in this situation? Click through to learn about multistate taxes and how to ensure that your business is compliant.

If your business is headquartered in one state, but you sell your products across the border, do you have to pay taxes in the recipients’ state? This answer depends largely on whether you have what is referred to as a “nexus,” meaning an establishment in the recipients’ state. So what is a nexus and what constitutes an establishment?

Any of the following might create a nexus in a given state:

  • A temporary or permanent office
  • A warehouse
  • A storage locker
  • A sales representative based in that state

The rules have a lot of subtleties, however, and each state may have slightly different interpretations of how the rules work, further complicating the issue. Take for example, New Jersey, which does a lot of cross-border business with New York and Pennsylvania. It says any of the following may create nexus:

  • Selling, leasing, or renting tangible personal property or specified digital products or services
  • Maintaining an office, distribution house, showroom, warehouse, service enterprise (e.g., a restaurant, entertainment center, business center), or other place of business
  • Having employees, independent contractors, agents, or other representatives (including salespersons, consultants, customer representatives, service or repair technicians, instructors, delivery persons, and independent representatives or solicitors acting as agents of the business) working in the state

Of course, regulatory changes and court cases can change this interpretation at any time. Indeed, the New York State Department of Taxation and Finance issues more opinion letters on sales tax issues than on all other state taxes combined.

So, what’s your best bet? With 45 states imposing a sales tax, it’s essential you stay in touch with us to ensure that you pay every dime you owe — but no more! Give us a call today.

From individual tax returns to complex tax strategies for small businesses, we institute cutting-edge tax strategies that are reliable, legal, and effective. Call our Rockville, MD CPA firm now at 301-728-0808 to find out how we can decrease your tax obligations. We offer a free consultation to new clients so contact us today.

Payroll Taxes: Who’s Responsible?

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Payroll Businessman working Financial accounting conceptAny business with employees must withhold money from its employees’ paychecks for income and employment taxes, including Social Security and Medicare taxes (known as Federal Insurance Contributions Act taxes, or FICA), and forward that money to the government. A business that knowingly or unknowingly fails to remit these withheld taxes in a timely manner will find itself in trouble with the IRS.

The IRS may levy a penalty, known as the trust fund recovery penalty, on individuals classified as “responsible persons.” The penalty is equal to 100% of the unpaid federal income and FICA taxes withheld from employees’ pay.

Who’s a Responsible Person?

Any person who is responsible for collecting, accounting for, and paying over withheld taxes and who willfully fails to remit those taxes to the IRS is a responsible person who can be liable for the trust fund recovery penalty. A company’s officers and employees in charge of accounting functions could fall into this category. However, the IRS will take the facts and circumstances of each individual case into consideration.

The IRS states that a responsible person may be:

  • An officer or an employee of a corporation
  • A member or employee of a partnership
  • A corporate director or shareholder
  • Another person with authority and control over funds to direct their disbursement
  • Another corporation or third-party payer
  • Payroll service providers
  • The IRS will target any person who has significant influence over whether certain bills or creditors should be paid or is responsible for day-to-day financial management.

Working With the IRS

If your responsibilities make you a “responsible person,” then you must make certain that all payroll taxes are being correctly withheld and remitted in a timely manner. Talk to a tax advisor if you need to know more about the requirements.

From individual tax returns to complex tax strategies for small businesses, we institute cutting-edge tax strategies that are reliable, legal, and effective. Call our Rockville, MD CPA firm now at 301-728-0808 to find out how we can decrease your tax obligations. We offer a free consultation to new clients so contact us today.

How to Improve Your Cash Flow

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exchanging moneySlow paying customers, seasonal revenue variations, an unexpected downturn in sales, higher expenses — any number of business conditions can contribute to a cash flow crunch. If you own a small business, you may find the suggestions that follow helpful in minimizing cash flow problems.

Billing and collections. Your employees need to work with clear guidelines. If you don’t have a standardized process for billing and collections, make it a priority to develop one. Consider sending invoices electronically instead of by mail. And encourage customers to pay via electronic funds transfer rather than by check. If you don’t offer a discount for timely payment, consider adding one to your payment terms.

Expense management. Know when bills are due. As often as possible, pay suppliers within the period that allows you to take advantage of any prompt-payment incentives. Remember that foregoing a discount in order to pay later is essentially financing your purchase.

Take another look at your costs for ongoing goods and services, including telecommunications, shipping and delivery, utilities, etc. If you or your employees travel frequently for in-person meetings, consider holding more web conferences to reduce costs.

Inventory. Focus on inventory management, if applicable, to avoid tying up cash unnecessarily. Determine the minimum quantities you need to keep on hand to promptly serve customers. Systematically track inventory levels to avoid overbuying.

Debt management. Consider how you use credit. Before you commit to financing, compare terms from more than one lender and keep the amount to a manageable level. For flexibility, consider establishing a line of credit if you do not already have one. You will be charged interest only on the amount drawn from the credit line.

Control taxes. Make sure you are taking advantage of available tax breaks, such as the Section 179 deduction for equipment purchases, to limit taxes.

Develop a cash flow budget. Projecting monthly or weekly cash inflows and outflows gives you a critical snapshot of your business’s cash position and shows whether you’ll have enough cash on hand to meet your company’s needs.

Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track.

Find out how to cultivate a prosperous and long standing business with accounting solutions and tax strategies that yield profitability, sustainability, and growth. Contact our CPA firm at 301-728-0808 to work with a knowledgeable business consultant or request your free consultation online.

Do You Have a Business Continuity Plan? You Should

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Business continuity plan in a blue folder.What if disaster strikes your business? An estimated 25% of businesses don’t reopen after a major disaster strikes.1 Having a business continuity plan can help improve your odds of recovering.

The Basic Plan

The strategy behind a business continuity (or disaster recovery) plan is straightforward: Identify the various risks that could disrupt your business, look at how each operation could be affected, and identify appropriate recovery actions.

Make sure you have a list of employees ready with phone numbers, email addresses, and emergency family contacts for communication purposes. If any of your employees can work from home, include that information in your personnel list. You’ll need a similar list of customers, suppliers, and other vendors. Social networking tools may be especially helpful for keeping in touch during and after a disaster.

Risk Protection

Having the proper insurance is key to protecting your business — at all times. In addition to property and casualty insurance, most small businesses carry disability, key-person life insurance, and business interruption insurance. And make sure your buy-sell agreement is up to date, including the life insurance policies that fund it. Meet with your financial professional for a complete review.

Maintaining Operations

If your building has to be evacuated, you’ll need an alternative site. Talk with other business owners in your vicinity about locating and equipping a facility that can be shared in case of an emergency. You may be able to limit physical damage by taking some preemptive steps (e.g., having a generator and a pump on hand).

Protecting Data

A disaster could damage or destroy your computer equipment and wipe out your data, so take precautions. Invest in surge protectors and arrange for secure storage by transmitting data to a remote server or backing up daily to storage media that can be kept off site.

Protecting Your Business

If you think your business is too small to need a plan or that it will take too long to create one, just think about how much you stand to lose by not having one. Meet with your financial professional for a full review.

Find out how to cultivate a prosperous and long standing business with accounting solutions and tax strategies that yield profitability, sustainability, and growth. Contact our CPA firm at 301-728-0808 to work with a knowledgeable business consultant or request your free consultation online.

Source/Disclaimer:

1Source: U.S. Small Business Administration, www.sba.gov/content/disaster-planning.