PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Barbara Weltman’s Idea of the Day® Follow-up

By at 8 September, 2015, 8:13 pm

Entrepreneurs can stay ahead of the game with  Barbara Weltman’s Idea of the Day®

Entrepreneurs can stay ahead of the game with Barbara Weltman’s Idea of the Day®

Each day you’ll find a new tip for your business in Barbara Weltman’s Idea of the Day®. Sign up to receive the idea on a daily basis by email! During the month of August, here are some ideas you may have missed…and what’s happened since then.

80th Anniversary of the Social Security Act 

On August 14, 1935, the Social Security Act was signed into law. When FICA tax began (in 1937 there was no Medicare component at that time), the employer’s (and employee’s) share was 1% of wages up to $3,000, for a maximum of $30 per employee per year. Follow-up: The wage base for Social Security taxes in 2016 (part of FICA and self-employment tax) is expected to be unchanged at $118,500 because of very low inflation this year (the official wage base for 2016 is announced in mid-October). However, there is no cap on earnings taken into account in figuring the Medicare portion of FICA and self-employment tax (which was not part of the original Social Security Act).

U.S. Secretary of Labor Addresses Worker Classifications 

Secretary Edward Perez posted a recap of a live chat on the subject. His answers illuminate the Department of Labor’s position on when a worker is an employee versus an independent contractor. One key response: “Tackling misclassification has been a priority since day one of this administration… We focus on industries where wage violations are prevalent and workers are often afraid to speak up or don’t know their rights. If you want to speak to someone at the Department, call 866-4US-WAGE.” Follow-up: The Secretary’s remarks followed a July 15, 2015 Department of Labor interpretive memorandum that expressed the department’s belief that “most workers [classified as independent contractors] are employees under the FLSA’s broad definitions.” Worker classification is also under the eyes of the NLRB. A recent NLRB ruling impacting contingent workforce arrangements (of which using independent contractors is one option) decided that a company providing workers and the company using them were co-employers. More on this to come.

Are You Eligible for the Small Employer Health Credit? 

The federal government has an estimator that you can use to determine eligibility. Enter the year you’re interested in (2015, 2016) and the information requested. Reminder: the credit applies only for 2 consecutive years so if you claim it in 2014 and 2015, you can’t in 2016. Follow-up: To qualify for the credit you must buy coverage through the government’s Small Business Health Options Program (SHOP). By inputting your zip code and the ages of employees (and dependents), you can get an estimate of pricing and decide whether to stick with the SHOP and the credit or shop private carriers for better prices for 2016.

IRS Audio Webcast for the Self-Employed 

On August 26, 2015, the IRS ran a free one-hour audio webcast is Business Taxes for the Self-Employed: The Basics. Follow-up: The IRS has archives of prior webinars; the one for basics for the self-employed has not been added yet. However, there is a very good one on “employee or independent contractor” from earlier this year.

Barbara Weltman is a member of SBE Council’s Advisory Board, and provides complimentary resources to small business owners and entrepreneurs through various platforms.  She is the publisher of Idea of the Day® at BarbaraWeltman.com.  Barbara also co-hosts Business Leaders radio. Follow Barbara on Twitter @BarbaraWeltman. 

 

 

News and Media Releases