continued from cover
IGNORANCE is BLISS EXPENSIVE
filing, and filings for small volumes are
due quarterly or annually.
Ignoring your sales tax obligation won’t
make it go away. We could write a book
about the consequences of non-compliance, but instead, just take our word for
it: you don’t want to go there.
2. Obamacare
Earlier this summer, the Supreme Court
upheld the Affordable Care Act as the law
of the land. So if you have 50 or more fulltime equivalent (FTE) employees, you’re
responsible to provide them with the option to purchase health insurance. If you
don’t, you’ll face a fine for each employee
not covered. Large employers (50+) must
provide Form 1095C to employees early
next year. For more information on your
health care responsibilities, visit www.
deardrebit.com/Obamacare.
(And Risky)
4. Employee classification
Depending on your industry or the nature of your business, you may have
different classifications of employees
on staff – such as payroll employees or
subcontractors. Make sure you classify
your employees properly – otherwise,
you could be hit with damaging financial
penalties.
When classifying your employees, follow
these guidelines:
SUBCONTRACTOR
PAYROLL EMPLOYEE
Required to file
a Form 1099
Required to file
a W-2 Form
Independent
employees
(often work for
more than one
employer)
Work for you,
and probably
only you
Taxes are not
withheld
Taxes are
withheld
Not eligible to
receive benefits,
including workers
compensation
Eligible to
receive
benefits
3. 401(k) remittance
If you offer a 401(k) program, it’s your
responsibility to remit contributions in
a timely manner – remittance should
generally take place as soon as administratively possible, but absolutely no
later than the 15th business day of the
month following the date the participant
contribution was withheld. For plans with
fewer than 100 participants, remit within
seven business days of withholding, and
you’ll be good to go. This seven-day safe
harbor does not exist for plans with 100
or more participants.
Each year, you must submit Form 5500
and disclose whether any remittances
were late. Late remittances are considered prohibited transactions, and if you
don’t declare them, you could face legal
consequences. If you miss a remittance,
you can avoid potential penalties by immediately self-reporting the oversight
through the Voluntary Fiduciary Correction Program. If you find yourself in this
situation, it’s definitely best to ‘fess up.
5. Foreign workers
You’re responsible for ensuring that all
of your employees are able to legally work in the U.S. If you hire foreign
workers, this is especially important. To
legally work in the U.S., an employee
must fall into one of four categories:
•
•
•
•
U.S. citizen
Noncitizen national
Lawful permanent resident
Alien authorized to work
In order to verify employment eligibility, you must require all new employees
to complete Form I-9 within three days
of hire – then it’s your responsibility to
hang on to them for three years (or one
year from their last day of employment) after that. If the U.S. Immigration and Customs Enforcement
agency audits you, you’d better
have these forms handy.
If you knowingly employ – or don’t
take proper steps to identify –
illegal workers, you’ll face stiff
fines and possible imprisonment,
depending on the severity and
repetition of the offense.
If you need help better understanding your responsibilities in
these five areas, or simply want to
make sure you’re on the right track,
contact your financial advisor.
bright idea:
For more information
on your health care
responsibilities, visit
www.deardrebit.com/
Obamacare.
Small Business Corner
11