Both businesses and individuals can be subject to tax scams from criminals who often impersonate the IRS or other government agencies in an attempt to extract money. It’s an old trick, but it seems that the scammers get more sophisticated every year. Soon we’ll be in the middle of tax season, when we’re especially anxious about money and often easy prey for scammers.
According to the IRS, scammers may pose as IRS agents and target especially vulnerable taxpayers, such as older Americans, newly arrived immigrants and those whose first language is not English. But even more sophisticated individuals can be victims: criminals have been known to threaten CPAs with immediate suspensions of their licenses if they didn’t immediately send money, even though individual states, and not the IRS, license CPAs!
The IRS has also reported that some sophisticated scammers can fake a caller ID so it appears you are getting a call from the IRS. They even may copy official IRS letterhead for use in email or regular mail.
In a recent memo, the IRS says that fear is one of the principal tactics scammers use: “Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke the license of their victim if they don’t get the money.” It is true that some states will suspend the drivers’ licenses of those who are delinquent in their taxes, but that only happens after the state has exhausted all other collection methods over a long period of time.
The IRS notes that it will never:
Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
Demand that you pay taxes and not allow you to question or appeal the amount you owe.
Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
Ask for your credit or debit card numbers over the phone.
Threaten to bring in police or other agencies to arrest you for not paying.
Taxpayers–both businesses and individuals–need to be wary about a range of scams. Realize that most are preventable. With a bit of knowledge, you can avoid becoming a victim, avoiding fraudulent returns, phony calls and phishing swindles.
The number of fraudulent returns is booming. Thieves use the Social Security numbers of unsuspecting Americans, file bogus tax returns and pocket the resulting tax refunds. But the IRS is stepping up its efforts to combat this scam: An early detection system enabled the agency to identify 35,000 fraudulent returns in the first few months of 2016’s tax season, preventing $193.8 million in fake refunds.
Still, the scam is not totally avoidable and you’ll never know whether you’re a victim until your real tax return is rejected by the IRS because the phony one already was accepted. How can you lower your risk of being a victim? File your tax return early — before a crook can file one.
Develop good habits with your identifying information: Use your Social Security number only when absolutely necessary, check your credit report regularly for suspicious activity and don’t throw papers with sensitive information in the trash.
Phony calls from the IRS
One of the most rampant tax scams involves phony calls from IRS agents. These schemes have cost victims more than $23 million over the past few years. There are a few versions of this scam, but in general, the caller will claim to be an IRS agent, saying that you owe tax, like a federal student tax, which doesn’t exist, or that you are entitled to a huge refund in order to get you to give the caller more information.
But the swindle is easy to avoid. The IRS will never:
Call without first mailing you a bill. For certain, it won’t demand immediate payment on the phone.
Demand that you pay taxes without an opportunity to appeal or question the amount owed.
Require a specific payment method.
Ask for a credit/debit card number over the phone.
If you get such a call, hang up immediately and report the scam to the IRS. Even if you do owe tax, hang up and call the IRS at 800-829-1040. The agents there will be happy to help you and you’ll know you’re talking to the right people.
Phishing and malware
The IRS reported a 400 percent surge in phishing and malware incidents for the 2016 tax season–and it doesn’t seem likely scammers have given up since then! These incidents involve fake emails designed to trick victims into thinking the messages come directly from the IRS, and some look very official, even directing you to a website that’s awfully similar to the IRS’s official website at www.irs.gov.
Like phone scams, phishing and malware shakedowns are fairly easy to avoid:
Remember that the IRS doesn’t initiate contact by email, text message or social media. Ever.
The official IRS website and any legitimate IRS webpage will begin with IRS.gov. Don’t be fooled by variations such as “irsgov” or “irs.net.”
If you receive an email claiming to be from the IRS and you weren’t expecting one, don’t reply, click on any links or open any attachments. You may wish to simply forward the email to firstname.lastname@example.org before deleting it. And, as always, stay in touch with us; we can help you separate fact from fiction.
As fulfilled and engaged as your employees may be with their jobs, if they have any issues with their paychecks, it won’t take long for them to become frustrated. Some companies have dedicated payroll departments and others find it useful to outsource this process to one of many companies that specialize in payroll. How do you know which option is right for you? Here are some things to consider.
How big is your company? One of the biggest concerns when it comes to answering this question is how many employees your organization has on staff. However, the answer isn’t cut and dry. Small companies like to use payroll services so they don’t need to employ a dedicated payroll department. Larger companies like to use them to maintain consistency.
Do you need more than just payroll? There are other reasons to consider an outside vendor, especially if your small company also wants insurance or other services. An outside vendor may be able to meet a wide variety of your needs.
Are your employees exempt or nonexempt? Exempt employees are traditionally paid an annual salary. Nonexempt are usually hourly employees who receive hourly pay and qualify for overtime. The more complicated the payroll process, the more important it might be to outsource it.
How often is payday? Another thing to consider is how often you pay your employees. Salaried employees are frequently paid twice a month. Hourly employees might be paid every two weeks or every week. This is something a payroll service can work out with you to be the most effective for your type of business.
Do you have more questions about outsourced payroll? Call us today! 916-550-8174
The proposed version of Form W-4 has a few more lines than the current one, and the questions are a little different. For example, the current version asks for the number of allowances. The proposed version asks for nonwage income not subject to withholding, itemized and other deductions, and tax credits (such as the child tax credit). There is also a line for those who have multiple jobs at the same time or who file as married filing jointly, with both spouses working.
According to an analysis from the American Payroll Association, “Instead of claiming allowances based on filing status using a separate worksheet, the number of allowances will be calculated automatically based on the filing status that is checked — 2 if single or married filing separately and 3 if married filing jointly or head of household.”
But don’t delve too deeply into it, as this may be far from final. According to the IRS, “We anticipate it is likely that this form will change before being released as final.”
So what should you do now? Nothing. Do not use the draft form. Keep using your current Form W-4. We are keeping an eye on the situation and will let you know when the new form has been finalized, what changes it has and when it is appropriate to start using it.
What do you do to keep track of your employees: a program, old-fashioned time cards or just a yellow legal pad and a pen? No matter what you use, do you really take the time to study the results and consider whether you’re losing money due to inefficiency? Did you ever bother to calculate how much money you may be losing just in one month? It may be time to think more strategically.
First of all, you have to become more sophisticated. An automated time and attendance system isn’t a guarantee of perfect efficiency, but it’s a start. If your employees are still filling out time cards, it could be costing your business a lot more than just the cards themselves. Are you thinking a new system might be expensive? Just think about how much such a system could save you, and you might be surprised at how it might actually more than pay for itself.
Meanwhile, no matter what method you use, consider the following headaches you may be giving yourself:
Headache #1: Too much time spent by supervisors approving time sheets. Is there a way to create a more automated system?
Headache #2: Employees who don’t always write down their true time worked. How can you fix this?
Headache #3: Hand-keying issues that lead to errors and fraud. Again, automation may be the key.
Headache #4: Managing overtime. How can you keep employees from going into overtime hours before you even know about it?
Headache #5: Perhaps the worst of all, exposure from an audit or employee complaint.
A better scenario evolves when you convert to an automated time and attendance management system — and learn how to interpret the data. Consider the benefits:
Classifications, labor contracts and policies are automatically applied when processing each employee’s paycheck
Easier determination of benefit eligibility under the Affordable Care Act.
You’ll pay employees for their actual time worked, avoiding lawsuits and back wages.
Payroll errors from manual data entry are virtually eliminated.
How much less stressful would it be to run your business knowing that you are not only saving a considerable amount of money by automating, but you are also protecting your assets from potential employee lawsuits and maybe, even worse, an IRS audit?
Give us a call. We’ll show you how to choose the right system for your particular needs and how easy it is to integrate that new system into your business. Even more, we can teach you how to interpret the results.
Source: Industry Newsletters A Division of Home Actions LLC
Whether you’re a small-business owner or an HR professional in a larger company, managing payroll can be a real hassle. The rules and regulations surrounding payroll can be complex, and often vary from region to region.
Outsourcing your payroll functions to a firm that specializes in payroll may sound like just another expense your business should try to do without—but hiring a payroll firm will actually save you both time and money. Here are four great reasons to work with a dedicated payroll company.
1. Leverage the Experts
Managing and administering payroll is not as straightforward a process as we’d like. In addition to making sure all checks are cut and delivered to the right employees in a timely manner, payroll has to withhold the right amounts for taxes, monitor any withholdings for benefits, and track accumulated vacation time, sick days or advances. All of this must be in compliance with the latest local, state and federal employment laws.
Since payroll firms handle nothing but payroll, they’re experts on this topic. They’re always up to date on the rules and regulations that govern payroll, taxes and benefits, and they can ensure that every employee is paid correctly and on time.
2. Time-Saving Convenience
With all the work that goes into preparing and administrating payroll, this activity alone can consume a few days of your week. If you own a small business, you simply don’t have the time to devote to payroll—and hiring a payroll employee would be cost-prohibitive. For HR departments, all that time spent working on payroll would be better served if employees could focus on core responsibilities.
Working with a payroll firm saves your business valuable time, and time is money. Outsourcing this function also reduces the stress of having to deal with payroll—and lowered stress means higher productivity.
3. Reduced Risk
A professional payroll services firm will take on both the responsibility and the accountability for your payroll. This means your company has a reduced risk for employee lawsuits and other costly payroll-related issues, including compliance issues with state and federal employment laws.
For smaller companies, outsourcing your payroll gives you greater separation of duties, reducing the risk of fraud that occurs when just one or two employees handle all of the accounting and payroll activities for the business.
4. Advanced Technology
Payroll firms can offer more advanced payment options to your employees at a lower cost. Through economy of scale, payroll service providers have access to technologies such as direct deposit and secure electronic paystubs—programs that can be cost-prohibitive for individual companies to offer. These convenience benefits also help to increase employee satisfaction.
Finally, a payroll firm can provide additional services for your business, such as bookkeeping, accounting and tax form preparation. Establishing a professional relationship with a payroll service provider makes it easier for your company to outsource more functions as your business needs grow and change.
Source: Industry Newletters A Diviion of Home Actions LLC
Part of running a successful business is keeping not just customers happy, but employees too. Good employee morale will mean more productivity, so it’s important that you design ways to show employees your appreciation and recognize their achievements. There are many different types of award programs that you can implement, but we’ve rounded up some of the most effective ways to give praise and keep employees satisfied.
The old ways of receiving recognition from a boss or other higher-up are not necessarily the most effective means. What is more meaningful to employees is receiving praise from their peers. This is because their peers know what they do on a daily basis and can provide more targeted feedback on their performance. Companies should foster ways for employees to frequently recognize each other’s good work.
Following on the suggestion from above, a shout-out newsletter that gets emailed companywide is a great way for employees to offer each other praise. It’s important that employees have an easy way to offer feedback and recognition to each other, so implementing a newsletter where employees can shout out to their peers for good work is a great way to get everyone involved in spreading praise.
A celebration calendar is a way to recognize milestones in your employees’ lives. It can include birthdays, work anniversaries, graduations, baby announcements and more. This way, everyone gets a chance to have an important event on the calendar, and it helps employees and managers get to know each other on a more personal level. It’s also a good way to celebrate employees on a regular basis.
Get all of your employees, not just HR, involved in planning company retreats and outings. This way, everyone gets their opinion heard about where the company should go. Retreats are also a great way to build relationships outside of the office. Suggest things like a bowling night, a brewery tour, or other fun and local activities.
Long-standing service award
A long-standing service award honors employees who have been there for a number of years. This award recognizes their dedication and hard work for the company. Some employers give gifts such as plaques, but it’s not necessary. What’s more important is that you give out these awards more frequently. You could have a service award even for employees’ first year of working at the firm. It doesn’t have to go only to people who have been there for 10 years or more.
A spot bonus is a smaller bonus used to reward employees “on the spot” for exceptional work. Surprising employees with a bonus is a way to recognize them for a specific project or task. Spot bonuses are irregular bonuses that aren’t scheduled as yearly or quarterly bonuses are, but rather are meant to provide appreciation to employees at random moments throughout the year.
Awards based on specific achievements
This one ties in with spot bonuses as a way to recognize employees for their hard work on specific tasks. Instead of having one big employee appreciation day, it’s more effective to give out achievement awards that are unique to each employee. This way, employees don’t feel as though they’re being lumped together with everyone else when upper management recognizes their hard work. Distributing awards individually, based on each person’s particular achievements, is better for morale.
Use your imagination, and let us know if we can help you with employee award programs at your business.