Taxes

Hot Savings for New Jersey Employers August Deadline to Reduce SUI Rates

August 17, 2016 by Admin

Did you check your NJ SUI rates?

Over the last few weeks, all New Jersey employers received a Notice of Employer Contribution Rates. This is not a bill, but rather a summary of the manner in which the NJ Department of Labor calculates the 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 the NJ SUI rate?

A voluntary contribution increases the 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 your labor cost. Business owners should give it careful attention. If you wish to make a voluntary contribution to your reserve balance you only have 30 days from the notification date (July 27, 2016) 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.

If you would like assistance in determining if a voluntary contribution will save you money, please do not hesitate to contact us immediately. We will provide you with an illustration of the benefits which you stand to reap from making such a contribution. Within the 30 day period you will be able to weigh the considerations and act accordingly.

Foreign Bank Accounts? Don’t Miss the June 30, 2016 Deadline

June 6, 2016 by Admin

The FBAR: Who Should File? Do you have income overseas you forgot to report? Did Grandpa leave you his foreign bank account when he passed away? If you have foreign bank accounts holding more than $10,000 in the aggregate anytime during the year, you are required to file an FBAR (Report of Foreign Bank Accounts) by June 30^th of the following year (the 2015 FBAR must be received by the IRS by June 30, 2016). It doesn’t matter whether the foreign accounts generate income or not; just owning them, or having signature authority, requires you to file.

What’s the Big Deal? Failure to file can result in serious consequences. The sanctions for not completing the FBAR include numerous severe civil penalties and potential prosecution followed by a term in federal prison.

What Can I Do? , do not need to enter the OVDP, but can participate in the )penalty are due.

Time is Running Out Under the new rules, any taxpayer seeking to participate in the OVDP, who at any point in the 8 year look back period had an account at a bank which has been publically identified as a target of an IRS criminal tax investigation or as having reached a non- prosecution agreement with the IRS, will be subject to a FBAR penalty of 50% (not 27.5%) on all foreign accounts and assets. Close to 100 Swiss banks are currently negotiating to enter into Non-Prosecution Agreements with the IRS, so the risk of facing a 50% penalty is growing.

Better Safe than Sorry While the current voluntary disclosure program is currently running indefinitely, the rules can change at any time. In addition, disclosing now allows you to transfer the money to your American accounts as well as to implement gifting and other estate planning strategies. Finally, for a “Get Out of Jail Free Card” it’s a pretty good deal. Now you will be able to sleep at night!

Hot Savings – Reduce NJ SUI Rates in August

July 30, 2015 by Admin

What’s my New Rate?

In July all New Jersey employers received a Notice of Employer Contribution Rates. This is not a bill, but rather a summary of the manner in which 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. A voluntary contribution increases the reserve balance and may reduce your contribution rate. In many circumstances a voluntary contribution represents an excellent opportunity to reduce labor costs.

The Clock is Ticking

The unemployment expense is a substantial component of your labor cost. Staffing agencies should give it careful attention. If you wish to make a voluntary contributionto your reserve balance you have 30 days from the notification date to do so. In addition, we suggest that you verify the amount of the employer contributions and the benefits charged to your account. Report any discrepancies to the NJ Dept. of Labor.

Won’t my Payroll Company Take Care of This?

Outside payroll services generally don’t test the new rates for cost saving opportunities. We can assist you in determining if a voluntary contribution makes sense for you. We can provide you with an illustration of the benefits you stand to reap from making such a contribution. You will be able to weigh the considerations and act accordingly.

Hit by the NJ Exit Tax on Sale of Real Estate? You Can Recoup Your Money

January 22, 2015 by Admin

The New Jersey “Exit Tax”, which became law in 2007, requires the real estate seller to file a GIT/REP form

(Gross Income Tax form) in order to record a Deed for the transfer of his property.

When a non-resident sells property, New Jersey will withhold this income tax in the amount of either 8.97 percent of the profit or 2 percent of the total selling price, whichever is higher. Therefore, even if the property is sold at a loss, tax must be withheld to fulfill the two percent requirement.

What Can I do?

It’s important to realize that while the Exit Tax requires a substantial withholding, it doesn’t have any impact on the actual tax liability. If the seller files a NJ tax return he is refunded the difference between what was withheld and what is owed. This recovery can be very significant when one factors in the selling costs and original purchase price, both of which reduce the taxable gain.

Estates Should Pay Special Attention

The recovery is often even greater in the case of real estate sold by an estate, as there is a step up in cost basis which would typically minimize a gain on the sale, often resulting in full recovery of the entire withholding. To quickly expedite the recovery of the excess withholding, it would be prudent to timely file Form NJ1040 NR (individual) or NJ1041 (estate/fiduciary).

How do I know if I am considered a “non-resident”?

So who’s considered a “resident” and who’s a “non-resident” with regard to this tax? The law defines a resident taxpayer as one of the following:

An individual who is and intends to continue to maintain a permanent place of abode (home, residence) in New Jersey on/after the day of transfer
An estate established under the laws of New Jersey
A trust established under the laws of New Jersey

A nonresident is simply defined as “any taxpayer that does not meet the definition of resident taxpayer.”

NJ Employers-Reduce Your Unemployment Tax Rates-August Deadline

July 29, 2014 by Admin

Did you check your NJ SUI rates?
In July all New Jersey employers received a Notice of Employer Contribution Rates. This is not a bill, but rather a summary of the manner

in which 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 the NJ SUI rate?
A voluntary contribution increases the 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.

Unreported Assets Overseas? The Clock is Ticking

May 29, 2014 by Admin

Do you have income overseas you forgot to report? Did Grandpa leave you his foreign bank account when he passed away? If you have foreign bank accounts holding more than $10,000 in the aggregate anytime during the year, you are required to file an FBAR (Report of Foreign Bank Accounts) by June 30^th of the following year (the 2013 FBAR must be received by the IRS by June 30, 2014). There is no extension to file the FBAR.

It doesn’t matter whether the foreign accounts generate income or not; just owning them, or having signature authority, requires you to file. Failure to file can result in serious consequences. The sanctions for not completing the FBAR include numerous severe civil penalties and potential prosecution followed by a term in federal prison.

The 2012 Offshore Voluntary Disclosure Program (OVDP) continues well into 2014, with no definite final deadline in sight. It’s important to realize that the Voluntary Disclosure Program essentially sets up a race between you and the IRS. Diplomatically, as a result of the Foreign Account Tax Compliance Act (FATCA) country after country has recently declared that they intend to disclose US citizen account owners to the IRS. Do not “relax” if the country in which your Offshore Account is located has not yet turned over documentation to the IRS. Diplomatic and economic pressure is being exerted by the U.S. globally. The metaphorical “noose” will only tighten.

While the voluntary disclosure program is currently running indefinitely, the rules can change at any time. The FBAR penalty is 27.5% of the largest balance during the period covered by the voluntary disclosure. Sounds like a steep price to pay? The penalties are far greater if you don’t “get with the program” and then get caught. In addition, disclosing now allows you to transfer the money to your American accounts as well as to implement gifting and other estate planning strategies. Finally, for a “Get Out of Jail Free Card” it’s a pretty good deal. Now you will be able to sleep at night!