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Taxes

Payroll Tax Savings for NJ Employers- August Deadline

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Did you check your NJ SUI rates?

Tax Savings

On July 28, 2017, the annual Notice of Employer Contribution Rates were mailed to all New Jersey employers. This is not a bill, but rather a summary of the way the NJ Department of Labor calculates your employer contribution rate for unemployment and disability. This form enables you to determine whether a voluntary contribution would save you money in the subsequent year.

Can I reduce my NJ SUI rate?
A voluntary contribution increases your reserve balance and may reduce your contribution rate. Each employer should calculate the amount of the voluntary contribution required to reduce the rate. The required voluntary payment should be compared to the savings realized from a lower rate.

The unemployment expense is a substantial component of the labor cost of staffing agencies. You should give it careful attention. If you wish to make a voluntary contribution to your reserve balance you have 30 days from the date of your notice to do so. We recommend that you verify all the NJ DOL calculations including the amount of the employer contributions and the benefits charged to your account. Report any discrepancies to the NJ Dept. of Labor.

By making a voluntary payment, employers may reduce the NJ SUI rate for the coming year. Please be aware that this payment increases your reserve balance and helps reduce the NJ SUI rate in future years as well.

Checked your TWES Account?

Good news…if you didn’t receive the Notice and have a Tax Web Enabled System (TWES) account online…you can find your contribution rates there as well. The TWES system provides a wealth of information allowing employers to review their account status, open balance, payment history, employer and worker contribution rates, credit balance and any delinquency. You can log on to the TWES website at https://my.state.nj.us/

Remember doing your summer homework now may save you money down the road! If you would like assistance in determining if a voluntary contribution will save you money, please do not hesitate to contact us immediately.

Delay of NJ 2016 refunds

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The New Jersey Division of Taxation will not begin issuing 2016 tax refunds until March 1, 2017.

Due to enhanced efforts to protect NJ taxpayers from identity theft and refund fraud, early filers could experience delays in receiving their 2016 refunds.  Tax returns filed electronically may now take a minimum of 4 weeks to validate and process.  Paper filed tax returns may take a minimum of 12 weeks to validate and process. 

To check the status of your refund click here:  Online Refund Service or call 1-800-323-4400.

Immigration Eyes New 1-9

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Statute of LIberty

What’s New?

Beginning January 22, 2017, employers must use only the new Form I-9 as reported by the US Citizenship and Immigration Services on their website www.uscis.gov. The new form is dated 11/14/2016 on the bottom of each page and expires 8/31/2019.

 

Why Should I Be Concerned?

The changes are minor, mainly to promote ease of use, particularly when completed on a computer. However, the consequences of using the old form are not necessarily minor. The penalties for Form I-9 violations have recently been doubled. The penalty for failing to comply with Form I-9 employment verification requirements are a minimum of $216 and a maximum of $2,156 per individual.  As of January 22, 2017, one of those requirements, is to use the new form.

Executor of Estate? Use our Executor Checklist

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In Charge of Dad’s or Mom’s Estate? 

Overwhelmed?

When a loved one passes away and you’re named as executor of his or her estate, you’re likely to feel a mix of emotions. Sadness over the individual’s demise, of course but mixed with that, will be feelings of apprehension: “How can I be sure I’m honoring the decedent’s last wishes and fulfilling all my responsibilities?”

What Do I Need to Know?
The responsibilities aren’t limited to deciding who gets which assets – it also means identifying all the decedent’s assets, and ensuring that the proper paperwork is filed with the IRS, the State and other agencies. To help you through this overwhelming time, Urbach & Avraham, CPAs has prepared an Executor Checklist that outlines the issues that an executor needs to consider.

Click here for the link to our Executor Checklist

Difficult Beneficiaries?….Family Owned Business?….IRA Nightmares?
The checklist is a roadmap of tasks, from probating the will, to filing a final Income Tax return and other required estate filings, to dealing with beneficiaries and distributing the assets. It’s loaded with tips on how to locate all assets, save various taxes and efficiently manage the estate administration.

This handy guide is packed with reminders about technical questions for your CPA, legal or other financial advisor. We work with many qualified estate attorneys to seamlessly coordinate your situation.

Finally, the Urbach & Avraham Executor Checklist highlights the complexities presented when a family owned business is involved. Was there a buy sell agreement? Who is paying the estate tax on the business, and are funds available to pay the tax?

As an executor, you’re already coping with a lot of emotional and other issues. We’re available to help lift the financial burden by assisting you with accounting and tax matters during this difficult time.

Family Business Changes of Ownership & Estate Planning

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By: Jeffrey D. Urbach, CVA, CPA/ABV/CFF

Business owners have been saving estate taxes by transferring assets in the form of FLPs (Family Limited Partnerships)

Family Business

or outright gifts of company stock to family members.
The tax savings are the result of discounts taken by business appraisers on the value of the gift.

The IRS is proposing to disallow these discounts as of Jan. 1, 2017.
Based on many published surveys, selling a non-controlling interest can result in a 30 to 40% (or more) total discount off the value of the company because of the combination of the following two discounts.
These discounts are commonly called Minority (or Control) Discounts and DLOM (Discounts for Lack of Marketability).
A simple example:
Company A is worth $10,000,000 and 100% of the shares are owned by Mr. Smith. Assume he wants to gift 1/3 of the company to his daughter. The appraiser valued the company at $10,000,000 and in her judgment, the gift would warrant a combined Marketability and Control discount of 40%.
On the face of it, a 1/3 interest of a $10,000,000 is $3.3 Million. After application of the 40% discount ($1.32 Million), the value of the gift becomes $1.98 Million. ($3.3 million less $1.32 Million, or $1.98 million).
In the end, Mr. Smith removes $3.3 of value from his taxable estate and pays a Gift Tax on $1.98 million, say roughly 40% or $790,000. The same 1/3 interest, if left in his estate would have incurred a tax of $1.3 Million ($3.3 Million times 40%).
The gift saved his family $510,000 ($1.3 Million less $790,000).
The new IRS proposals to disallow these discounts may take effect on January 1, 2017. You should consult with your estate attorney and other financial advisors ASAP and to have a strategy in place when and if this change occurs.

Multi-state Staffing Firms Need to Multitask

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Multi-states

With more than three million temporary and contract employees working for America’s staffing companies, demand for other-than-permanent workers continues to stay strong.

One goal for many staffing firms involves multi-state expansion. Having a presence in more than one state acts as a buffer against a slowdown in one location; and it enhances the firm’s image, helping it pitch to large companies with multistate operations.

But staffing firms that expand across state borders need to multitask, and consider issues like whether they need to register with each state in which they’re active.

Here’s Why

In July 2015, international staffing services company Insight Global LLC sued competitor Collabera Inc. in New Jersey Superior Court. Global alleged that Collabera induced at least 12 former employees of the plaintiff to leave Global and work for Collabera in violation of their employment agreements.

It turned out that at the time Global filed the complaint against Collabera, the plaintiff firm was NOT registered or licensed to do business in New Jersey, as was required under the Private Employment Agency Act, or PEAA.

“All businesses that provide employment and personnel services must be licensed and/or registered in New Jersey in order to operate within the State,” according to the PEAA.

That apparently helped to nail the Court’s decision to dismiss Global’s suit, since “…if an employment agency, temporary help services firm, or consulting firm failed to prove licensure or registration, the entity cannot bring a cause of action in New Jersey state courts.”

Collecting fees in multi-states…

The wording indicates that the ruling may not be limited to voiding separation agreements and employment agreements. The court ruling also notes that the PEAA bars an unregistered company’s claims “for a collection of fees…”

When Crossing the Border…

Staffing services firms as well as all businesses should review the laws of the states in which they do business, and determine whether or not they are complying with registration requirements. Firms need to be aware that they may not be able to enforce contracts or collect fees if they are not registered properly in the states and major cities in which they operate. In addition to registering with the Secretary of State and Division of Taxation, staffing companies should handle other requirements in each state, including sales tax, worker’s compensation and disability insurance coverage.