Just for Fun :)

Welcome Michelle Smith!

MichelleLoggins and Associates  is pleased to announce the addition of Michelle Smith to our accounting support staff.
Michelle has lived in Fayette County for ten years with husband, Sam, and two daughters, Kayla and Meghan.  Before joining Loggins & Associates, she was the accounting manager for a local builder/developer/rental property company.  Her interests include reading, scrapbooking and watching both daughers play soccer.
Please join us in welcoming Michelle to our staff!

Technology

5 Simple Ways to Spring Clean Your PC
 

It’s getting warmer and flowers are blooming; it’s time for spring cleaning.  Don’t forget that your computer may need a little cleaning as well.  Of course you can clean the monitor and use canned air to clean the keyboard, but what about all the internal crud that needs cleaning?  Even normal day-to-day internet use can clutter up and slow down a computer in no time.  After only a few months, your PC is running at a fraction of its original speed.  A little internal cleaning can get it running like new – no screw driver needed.  

  • Move Large Files to an External Drive – Photo, video or music collections take up an incredible amount of space.  You can move these types of files to an external hard drive to free up valuable hard drive space.    
  • Remove spyware, malware and viruses – Spyware is the number one culprit of slow running PCs.  Malware (malicious spyware) and viruses can put your security at risk as well as bog down the processing power of your computer.  There are many options available to scan and remove these types of enemies.  There are several options we recommend:  MalwareBytes (www.malwarebytes.org), AVG (free.avg.com) or (www.avg.com), and Ad-aware (www.lavasoft.com).  All offer a free version with limited features, or a option to purchase a full or Pro version with more automated features.  Beware of scanners that sound similar (Ad-ware), and especially beware of any “pop up” warmings that say your computer is infected.  These are scams that try to “scare” you into buying their product. 
  • Remove Old Documents – You should clean out documents & emails that are no longer needed.  If any documents contain sensitive information (tax-related documents), you should use a digital file shredder to permanently remove them.  If you’re not sure about the future need of a document, archive it to an external hard drive.
  • Tune the Registry – In very basic terms, the registry is your PC’s personal database; the computer’s brain that keeps track of everything (software, data, printers).  Over time, your computer’s registry can become bogged down with corrupt and unused data thus slowing things down.  Cleaning is a job for a professional – do not attempt to make any manual changes to your registry – you could cause irreversible damage.  Visit a computer technician or try a trusted software solution like Lavasoft’s Registry Tuner (www.lavasoft.com) or Uniblue’s Registry Booster (www.uniblue.com) which can identify, clean and correct any errors. 
  • Manage Startup Programs – if you have too many programs running at once, it can slow down your PC.  Some programs start automatically when you start Windows.  Check yours for unnecessary programs by going to Start, All Programs, Startup – right click to delete.  This does not remove the software from your machine, it only prevents it from automatically loading. 

Health Reform — Hidden Tax Change

Health care??

On March 23rd, President Obama signed into law health care changes that will impact how you issue 1099s for your business.   There are only a few lines buried in the new law in Section 9006 that will impact businesses in the U.S. drastically.  Planning for that change now can turn a year-end tax nightmare into a January dream come true. 

 
Those few lines mandate that beginning in 2012, all businesses must issue 1099s to everyone they pay more than $600 to during the year.  This changes the 1099 reporting requirement in two ways.  You will need to report payments for services as well as well as tangible goods (materials).  Currently you are only required to report payments for services and legal fees.  You will also be required to report payments to corporations as well as individuals.  These two small changes could impact the number of 1099s you are required to file exponentially. 
 
But still, what does the Health Care reform bill have to do with 1099s?  To help offset the cost of the health care bill, the 1099 provision would help uncover fraudulent deductions and unreported income.  The IRS estimates that more than $300 billion in tax revenue goes unreported each year.   By enforcing tax compliance, they are able to reduce the cost of the health care bill while offering millions in tax credits.   
 
So the question is, “what can I do now to make this change transparent for my company?”  The answer – 1) Start collecting W-9 forms for anyone you pay regardless if it is for services or goods, regardless of whether they are incorporated or not; regardless of the amount, and  2) make sure these tax ID numbers are entered into your accounting program.  When it is time to print out 1099s in January of 2012, you and/or your accountant will no longer need to go through each payee to determine if it they are a service provider, if the company is incorporated or not, then track down the taxpayer ID number.  Now there’s only one criteria – is it over $600?
 
Give us a call for more information on this and many other tax changes resulting from the new health reform legislation. 

 

President signs HIRE Act

Good Afternoon:
 
I am writing to give you an overview of the key tax changes affecting business in the Hiring Incentives to Restore Employment (HIRE) Act enacted on March 18, 2010.   The new law provides hiring incentives, expense extensions and tax credits to help stimulate the hiring of unemployed workers.
 
  • Payroll Tax Forgiveness – a qualified employer is exempt from paying the 6.2 percent share of Social Security payroll tax on qualified new hires.  A “qualified employee” must start work anytime after February 3, 2010 and before January 1, 2011, and generally must have been unemployed for at least 60 days or worked less than 40 hours per week before his or her start date with your company.  The newly hired cannot be related to the owner or a majority stockholder of the company; they can only be hired to replace a position from which someone left voluntarily or someone was let go for good cause.     Retained Worker Credit – Tax Credit Up to $1,000 – for employers who hire individuals, qualified under the Payroll Tax Forgiveness, AND keep them on the payroll for at least 52 consecutive weeks may be eligible for a tax credit for each qualifying employee on their 2010 tax return.  The Credit is the lesser of $1,000 or 6.2% of wages paid to the qualified retained working during the 52-consecutive week period.  Wages for last 26 weeks must be equal to at least 80% of wages for first 26 weeks. 
  • Extension of Section 179 Expensing – gives a one-year extension to enhanced expensing rules which was to expire December 31, 2009.  The maximum deduction for Section 179 was $250,000 with a phase out limit for qualifying property purchased at $800,000.  Without the new legislation the limit would be $125,000 with a $500,000 cap.  The HIRE Act extends the enhanced expensing at the $200,000/$800,000 threshold levels through December 31, 2010. 
 
Requirements 
  • Use new IRS Form W-11 to confirm qualified employees under the HIRE Act.  Only employees who meet all requirements may complete this form and sign the affidavit under penalty of perjury.   Click Here for Form W-11.    
  • Beginning with Second Quarter 2010, use new IRS Form 941 to claim an exemption equal to the employer’s share of Social Security taxes on wages paid in 2010.  Credits for qualifying First Quarter 2010 wages will be reported on the Second Quarter return.  You should Not file an amended return for First Quarter 2010.  Click Here for the Newly Revised Form 941.
 
I hope this information is helpful.  If you believe that your company may qualify for any of these benefits, contact our office to ensure that you are meeting the criteria and receiving the correct benefits.
 
Ben R. Loggins
Certified Public Accountant

Didn’t File? Now What?

Didn’t File?  Now What?
If you didn’t file a return or failed to file an extension on time, you should still file your tax return, even if it’s late.  Filing a past due return is not as difficult as you may think.  You should file your late return regardless of whether or not you can pay the amount due. 
 

Penalties & Interest Add Up FAST 
The failure to file penalty starts at 5% per month of the balance due.  Interest and other penalties also add to the total  amount you owe.  The sooner you file, (even if you can’t pay the full amount due) the less you will owe.  The IRS offers payment plan options to assist you with a balance due. 
 
Let Loggins & Associates Help
Assessing penalties and interest is not the only way the IRS uses to collect balances.  If you choose to ignore notices, they may choose to file a substitute return for you based on information they have; they may file a tax lien against your property, and/or levy your wages & bank accounts.  But even then it’s not too late to file a return.  Loggins and Associates is available to help you through any situation with the IRS.  We have the knowledge and experience of dealing with a variety of IRS issues and can speak with the IRS on your behalf.  One of our main areas of expertise is negotiating and resolving IRS problems. Give us a call at 770-478-7424.
 
 

Employee Spotlight — Sheila Rickard

SheilaSheila Rickard joined Loggins & Associates in October 2000.  She is a Para Pro Accountant and supports Gina McCombs, Miranda Kern & Josh Wilson.  Sheila also serves as a supervisor for the other Para Professionals responsible for the status and delegation of downstairs workflow.  Sheila is a QuickBooks ProAdvisor and is currently completing certification as an Advanced QuickBooks ProAdvisor. 

 
Before joining Loggins, Sheila worked for Fox Distributing for 18 years.  Sheila says that she “loves puzzles and every new account is like a puzzle to figure out”.  Sheila is a valued member of the Loggins staff!

Employee or Independent Contractor?

 Employee
The question of whether a worker is an independent contractor or employee for federal income and employment tax purposes is a complex one. It is intensely factual, and the stakes can be very high.  If a worker is an employee the company must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on the wages plus FUTA tax, and often provide the worker with fringe benefits it makes available to other employees. There may be state tax obligations as well. These obligations don’t apply for a worker who is an independent contractor. The business sends the independent contractor a Form 1099-MISC for the year showing what he or she was paid (if it amounts to $600 or more), and that’s it.
 

Who is an “employee?” There is no uniform definition of the term:

Under the common-law rules (so-called because they originate from court cases rather than from the tax code), an individual generally is an employee if the enterprise he works for has the right to control and direct him regarding the job he is to do and how he is to do it. Otherwise, he is an independent contractor.

Some employers that have misclassified workers as independent contractors are relieved from employment tax liabilities under Section 530 of the ’78 Revenue Act (not the Internal Revenue Code). In brief, Section 530 protection applies only if the employer: filed all federal returns consistent with its treatment of a worker as an independent contractor; treated all similarly situated workers as independent contractors; and had a “reasonable basis” for not treating the worker as an employee. For example, a “reasonable basis” exists if a significant segment of the employer’s industry has traditionally treated similar workers as independent contractors. Section 530 doesn’t apply to certain types of technical services workers.

Individuals who are “statutory employees,” (that is, specifically identified by the tax code as being employees) are treated as employees for social security tax purposes even if they aren’t subject to an employer’s direction and control (that is, even if the individuals wouldn’t be treated as employees under the common-law rules). These individuals are agent drivers and commission drivers, life insurance salespeople, home workers, and full-time traveling or city salespeople who meet a number of tests. Statutory employees may or may not be employees for non-FICA purposes. Corporate officers are statutory employees for all purposes.

Individuals who are statutory independent contractors (that is, specifically identified by the tax code as being non-employees) aren’t employees for purposes of wage withholding, FICA or FUTA, and the income tax rules in general. These individuals are qualified real estate agents and certain direct sellers.

Some categories of individuals are subject to special rules because of their occupations or identities. For example, corporate directors aren’t employees of a corporation in their capacity as directors, and partners of an enterprise organized as a partnership are treated as self-employed persons.

Under certain circumstances, you can ask IRS (on Form SS-8) to rule on whether a worker is an independent contractor or employee.

 

If you’d like to discuss these complex rules with a Loggins staff member and see how they apply to your business in order to make sure that none of your workers are misclassified, please call our office to arrange for an appointment.

Unemployment Taxes — Increase in 2010

 Employers should anticipate increases in their unemployment taxes in 2010 and possibly beyond, whether or not their business has had any claims.  State unemployment trust funds have fallen to such a low level that rate increases may be required to rebuild their balances even when employment improves.  Some states have had to borrow money from the federal government under the Federal Umemployment Trust Act (FUTA) to cover their current obligations will need to pay this money back with interest. 

November 2009 Georgia’s unemployment rate rose to 10.2% even during a seasonal employment period.  Also in November, the number of Georgians receiving umemployment benefits has risen 11.5% over November 2008.  Year-to-date 2009, Georgia Department of Labor has paid out $1.6 billion in umemployment benefits.  Although Georgia has received authorization to receive federal funds, they had not done so as of November.  Georgia estimates that approximately 15% of employers will see a “modest” increase in their 2010 premiums.

2010 QuickBooks Notice

Certified ProAdvisor
Remember to update your 2010 SUTA rates in your QuickBooks before your first payroll of 2010.  New rates sheets were mailed December 31st.  Also please fax Loggins a copy of this notice for your file.