MD’s New Alcoholic Beverage Tax
June 3, 2011 | 
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As you are probably aware, Governor O’Malley signed off on the new 9% sales tax rate on alcoholic beverages in May. The new law is more complicated than many people thought it would be. Everyone who sells alcoholic beverages — e.g. restaurants, bars, caterers, liquor stores — should make preparations in their businesses and accounting systems. Here are some FAQs put out by the Comptroller’s Office on how they intend to administer the tax to help you prepare.
If you have any questions about how this tax will affect you or your business:
Health Care Law Will Benefit Women-Owned Businesses
May 17, 2011 | Subscribe to our RSS Feed
As we have mentioned in previous blog posts, the Patient Protection and Affordable Care Act provides tax credits to employers with fewer than 25 workers (with average salaries of less than $50,000) to provide health insurance. The credit is offered on a sliding scales, as you can see in this health care credit table, with the full credit offered to companies with 10 or fewer employees (with an average wage of $25,000 or less), phasing out for larger companies.
What does this mean for women-owned businesses? Sources show that the majority of women owned businesses have fewer than 25 employees, making most of them eligible for this tax credit. From 2010-2013, the full credit covers 35 percent of a company’s premium contribution. Beginning in 2014, the full credit will cover 50 percent of contributions for up to two years for plans purchased through state health insurance exchanges. If you are eligible, this is a big help for your business. Make sure you are positioned to take advantage of the credit.
Questions?
tammy.schneider@glassjacobson.com
Update on the 1099 Reporting Requirements
May 11, 2011 | Subscribe to our RSS Feed
Now is a good time to update some topics this blog has addressed in the past.
Remember those nasty new 1099 reporting rules that were being thrown around? The ones that would have required you to report every entity you paid $600 or more to for services or goods? Well I am glad to report that President Obama has signed legislation which scraps this requirement. Also gone is the requirement that rental property owners file 1099s on payments of $600 or more for goods or services. Lawmakers listened to their constituents and lobbyists who complained that this additional reporting was going to be huge burden.
Form 1099s will still be necessary for contract labor/temporary help who are paid more than $600. This leads to a transition for something I have reported on in the past: whether or not to pay this temporary help with a 1099 or a W-2 as if they are an employee because of the definition of what constitutes an employee and subsequent state unemployment audits.
A client reported that he paid a temporary worker as an employee for working only a couple of days. This person then turned around and filed a claim for unemployment benefits for which our client was found liable thus affecting their unemployment insurance rate.
Clearly this is a case of being damned if you do and damned if you don’t. If you happen upon someone who really knows how to work the system you could be cheated. You will have to decide which situation offers the least risk.
Questions?
larry.goldberg@glassjacobson.com
Update on 1099 Reporting Requirements
May 11, 2011 | Subscribe to our RSS Feed
Now is a good time to update some topics this blog has addressed in the past.
Remember those nasty new 1099 reporting rules that were being thrown around? The ones that would have required you to report every entity you paid $600 or more to for services or goods? Well I am glad to report that President Obama has signed legislation which scraps this requirement. Also gone is the requirement that rental property owners file 1099s on payments of $600 or more for goods or services. Lawmakers listened to their constituents and lobbyists who complained that this additional reporting was going to be huge burden.
Form 1099s will still be necessary for contract labor/temporary help who are paid more than $600. This leads to a transition for something I have reported on in the past: whether or not to pay this temporary help with a 1099 or a W-2 as if they are an employee because of the definition of what constitutes an employee and subsequent state unemployment audits.
A client reported that he paid a temporary hygienist as an employee for working only a couple of days. This person then turned around and filed a claim for unemployment benefits for which our client was found liable thus affecting their unemployment insurance rate.
Clearly this is a case of being damned if you do and damned if you don’t. If you happen upon someone who really knows how to work the system you could be cheated. You will have to decide which situation offers the least risk.
Questions for Larry?
larry.goldberg@glassjacobson.com
8 Facts about IRS Penalties
April 27, 2011 | Subscribe to our RSS Feed
When it comes to filing a tax return – or not filing one – the IRS can assess a penalty if you fail to file, fail to pay or both. Here are eight important points the IRS wants you to know about the two different penalties you may face if you do not file or pay timely.
1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and explore other payment options in the meantime. The IRS will work with you.
3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
6. If you timely filed a request for an extension of time to file and you paid at least 90 percent of your actual tax liability by the original due date, you will not be faced with a failure-to-pay penalty if the remaining balance is paid by the extended due date.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.
Questions?