Employee-employer relationships regarding workers’ compensation are complicated by the IRS, industrial commissions, the courts and state statute. Each has its own definition or applies a different test to define “employee.”

Certain “employment” situations and arrangements are exempt from the requirements of workers’ compensation. Each state views exempted employment classes differently. Some allow total exclusion, while others may require coverage if certain thresholds are breached (generally very high thresholds in comparison to the standard requirements).
Employments Not Subject to Workers’ Compensation

Fewer Employees than Required by Statute Thirty-nine states and the District of Columbia require every employer with one employee or more to provide workers’ compensation coverage. However, 11 states allow employers to forego coverage until they surpass a certain threshold number of employees; once eclipsed, it becomes necessary for employers in those states to provide work comp benefits. A few of the “threshold” states lower the threshold number if the employer falls within a contractor classification or involve contact with ionizing radiation.

Workers’ compensation protection is not required in these states when the number of employees falls below the requisite number as specified by the state (generally between three and five). Knowing the threshold is paramount when placing workers’ compensation for multi-state clients.

The eleven states with a number threshold greater than one are: Alabama (5+); Arkansas (3+); Florida (4+); Georgia (3+); Mississippi (5+); Missouri (5+); New Mexico (3+); North Carolina (3+); South Carolina (4+); Tennessee (5+); and Virginia (3+). Five of these states lower the threshold if the insured is within a construction classification: Arkansas (2+); Florida (1+); Missouri (1+); New Mexico (1+); and Tennessee (1+).

Casual Labor – No Workers’ Compensation RequiredWorkers engaged in casual labor on behalf of the employer are not considered “employees” and are not required to be protected by a workers’ compensation policy. This exclusionary provision applies in nearly every state with each applying different requirements to the exception. States may:

• Simply define casual labor and exclude the requirement to provide protection. Some states apply subjective terms to this definition such as “brief,” “occasional,” “irregular,” “sporadic” or “infrequent,” which may require arbitration or litigation to objectify;
• Assign a maximum dollar limit that can be paid or a maximum number of days the job can last before the work is no longer considered “casual;” or
• Assign a number of “casual employees” allowed.

Casual labor is generally defined as work that is not in the usual course of trade, business, occupation or profession of the employer (contracting party). This could include relationships such as a manufacturer hiring a landscaping company to maintain the grounds; or the owner of an insurance agency hiring a carpenter to upgrade the office. The contractors hired are not performing duties that would normally be done by any employee; they are doing work outside the normal operational requirements. Essentially, a casual laborer is one that does not directly promote or advance the employer’s business or operation.

Domestic Employees Most states specifically remove the requirement of providing workers’ compensation protection for domestic employees. Some states place a payroll limit or a numerical limit above which coverage is once again required.

Agricultural, Farm, Ranch, Aquaculture EmployeesNearly every state excludes these workers from the definition of an “employee” and do not require coverage be provided to these workers. Like domestic employees, some states do limit the exception to operations or individuals with less than a specified number of workers or a specified payroll amount. A few states limit this exception with special provisions such as the type of work being performed or the familial relationships.

Commissioned Real Estate Agents  Many states remove the requirement to provide workers’ compensation protection to real estate agents or subagents paid purely on a commission basis. This exclusion does not apply in every state.
The above are the most commonly found exclusions to the workers’ compensation requirements; however, there are several beyond these that may only apply in a few states. Such limited exclusions include:

• Volunteer ski patrol employees;
• Members of the clergy;
• Some taxicab drivers;
• Professional athletes;
• Athletic contest officials;
• Officers of non-profit associations and corporations;
• Direct sale people (i.e. Mary Kay consultants and directors);
• Newspaper re-sellers; and
• Musicians/performers.

This is not an all-inclusive list.

Legal Recourse
If an exempted worker/employee is injured, the only recourse available to recover any medical costs or lost wages from the employer is the legal system. Essentially, the injured party has the same legal rights as a member of the general public, but the injured party also has to prove that the employer was negligent in causing the injury or illness. The employer is allowed the same defenses as were available prior to the enactment of workers’ compensation laws:

• Assumption of Risk: Proving negligence requires evidence that a duty of care is owed. When an employee assumes the risk of an inherently dangerous or recognizably dangerous activity, the duty of care is lifted from the employer. With no required duty of care, there can be no negligence. Employees in hazardous occupations are believed to understand the hazards and to assume the risk of injury;
• Contributory or Comparative Negligence (depending on the state): Doctrine of defense stating that if the injured person was even partially culpable in causing or aggravating his own injury, he is barred or severely limited in the amount of recovery from the other party; and
• Fellow Servant Rule: Defense against employer negligence asserting that an employee’s/worker’s injury was caused by a fellow employee not by the acts of the employer. If proven, negligence is not chargeable against the employer and recovery could be severely limited or barred.

Unless negligence can be proven, no finding of guilt or a requirement to pay will materialize.

Workers’ Compensation Coverage Provided
Workers’ compensation coverage can be extended to many of these exempt employments by attaching one of the available Voluntary Compensation Endorsements. These endorsements extend workers’ compensation protection to employments customarily exempted by individual state law by allowing the employer to designate the class of employees they wish protected. Essentially, workers become de facto employees, removing the employee’s need to sue and prove negligence and the employer’s requirement to provide and pay for a defense.

Provided by: Mike McVay, Accountant - Pensacola Virtual Bookkeepers. McVay Business Services 850-725-5696. Mike@MikeMcVay

Entrepreneurs thrive on a DIY mentality: Do everything you can yourself and don't pay for anything new until you have absolutely have to. It's especially difficult to justify hiring financial help like a bookkeeper.

With user-friendly software such as QuickBooks available, many business owners feel they should be able to do keep their records on their own, even as they wrestle with finding the time and wonder if they're doing things correctly. McVay Business Services offer all their clients a FREE QuickBooks Online Subscription for the life of your account. 

Deciding about "hiring a bookkeeper is something I struggle with all the time," says Randy Mitchelson, owner of National Web Leads, an Internet marketing company in Estero, Fla. While he finds basic accounting easy to do, it takes him away from working on his business. Meanwhile, his accounting and tax planning have become only more complicated in the six years since he founded his business.

Entrepreneurs who hire accounting help usually discover they weren't doing nearly as well on their own as they thought they were. Accountants are constantly reviewing current tax laws to help save you money on taxes. A good accountant such as Mike McVay, Accountant owner of McVay Business Services a Virtual Bookkeepers USA agency will usually save a business the entire years of accounting and tax prep fees with a decrease in tax liability based on current laws. 

Zalmi Duchman, chief executive of The Fresh Diet, a meal-delivery company based in Miami, lasted five years without a bookkeeper then hired one three months ago. The new employee cleaned up records that incorrectly mingled expenses and assets, reviewed employee purchases for duplication, and took over the mundane but critical task of paying bills. Duchman estimates his company is saving $500 to $1,000 in late fees every quarter. "I definitely have been able to make better and more educated decisions," he says.

So what are a small-business owner's options for professional help with financial tasks? Here is a primer:

Do I Need a Bookkeeper or an Accountant?
Actually it's a trick question. You may need both.
Aaron Sylvan, a serial entrepreneur who lives in New York, compares the situation to needing to hire both a carpenter and an architect when building a house.
An accountant can analyze the big picture of your financial situation and offer strategic advice. He or she produces key financial documents, such as a profit-and-loss statement, if needed, and files a company's taxes.

After tax season is over, an accountant can also act as an outsourced chief financial officer, advising an entrepreneur on financial strategies, such as whether to secure a line of credit against receivables when introducing new products.

In contrast, a bookkeeper does the day-to-day hands-on tasks: making sure new employees file all the right paperwork for the company's payroll, submitting invoices (promptly) and following up on them, and paying the bills. The bookkeeper also tracks company expenses and can assure that every cost has been entered -- and recorded correctly -- into software like QuickBooks so that the business is ready for tax time along with filing any other reporting to, say, creditors or investors.

"I don't keep receipts; they're a pain," says Sylvan, who runs Sylvan Social Technology, an ecommerce-services company. "Every month I get a bank statement with a gazillion transactions," such as taxi rides, meals, conferences and other expenses he has placed on his company's debit card.

His bookkeeper spends a few hours a week sorting it all out. As a result, Sylvan has a better idea about how his expenditures stack up against his budget. He knows he won't bill clients incorrectly or miss important payments.

"Knowledge is power," even when it comes to the small details, Sylvan says. "If you don't have a bookkeeper, you're probably not being as strategic as you could be in how you spend your money."

When to Bring in a Bookkeeper
In his running a half-dozen businesses the past 15 years, Sylvan has typically hired a bookkeeper for a few hours a week within a few months after starting a new venture. For the first six to nine months, he's usually too busy to focus much on recordkeeping, then "things begin to stabilize," he says. "Then you can see trends and you can start to think strategically about where your money is going and where you can save." And this is when a bookkeeper becomes valuable. Since Sylvan has fewer than a dozen employees at each new company, the bookkeeping takes about one day a month, he says.

The rates for hiring a bookkeeper on a part-time basis in the U.S. can range from $15 to $60 an hour, depending on location, the workload and whether work is done at the company's office or from home. McVay offers small business start-up monthly bookkeeping for $99.00 per month. Most their plans include a FREE QuickBooks Online Accounting subscription with a monthly bookkeeping service agreement. McVay also offers payroll starting at only $60.00 per month. Because of McVay's low overhead he has been able to keep his prices low to ensure higher profits within his client's businesses. Mike McVay, Accountant offers a FREE 1-hour consultation regardless if you use his services or not. 850-725-5696. Mike@MikeMcVay.com

Social Security law is infamously complex, especially for those in the retirement planning business. Two-income couples, for example, who were born several years apart, now face an utterly byzantine set of regulations when trying to select the best time to file for benefits, whether to accept spousal benefits, or whether to delay their own social security payout.
A Few Basic Rules of the Game
Social Security refers to early retirement, full retirement age, and delayed retirement. Typically, these mileposts occur at age 62, 65 or 66, and 70. The big advantage of delaying is that the benefit amount can be as much as one-third higher than if a person opted into the system at age 62 or 65. Social Security law refers to this advantage as “delayed retirement credits.” For healthy people who can live reasonably well without social security income, waiting until age 70 to receive benefits is almost always a smart decision.
When one spouse applies for benefits at early, full or delayed retirement age, the spouse, even if that person has never worked, receives a “spousal benefit” that can be as much as 50 percent of the primary wage-earner’s amount.
For single people, the rules are relatively simple because they simply decide whether to take benefits at age 62 or sometime after that up until age 70.
The Reset Provision
There is also a so-called “reset” provision that is available for anyone who regrets taking early benefits. Technically called a “Request for Withdrawal of Application” on Social Security Form 521, the RWA lets anyone “come out of retirement” so to speak, and repay any benefits received before age 70 (in bare dollars, with no adjustment for inflation or interest) and immediately opt back INTO the system at their current age.
The RWA sounds either too complicated or unwise, but it is sometimes a very good retirement strategy. For example, for someone who took benefits at age 62, for example, and four years later decides to repay all 48 months of benefit checks, the new monthly amount might be much higher. In addition, that new, much higher benefit amount will never go down.
The New Laws Change (almost) Everything
The 2000 the Senior Citizens’ Freedom to Work Act is ancient history. The new operational law for retirement planning emanates from the much more restrictive (for retirees anyway, who so loved the “freedom” of the 2000 law) Bipartisan Budget Act of 2015. Even in the hermetic world of tax and estate planning, whenever a law contains the word “bipartisan,” that usually portends the government getting more of your money and you getting less of it.
In any case, the Freedom to Work Act contained two key provisions that the Bipartisan Budget Act removes, effectively shutting down a pair of very lucrative, and legal, retirement planning tools.
The big picture of what happened is this: President Obama learned that tax attorneys and CPAs were advising their clients to, horror of horrors, maximize their LEGAL social security income based on the Social Security Administration’s own rules and on the 2000 Freedom to Work Act. He encouraged the SSA to issue new provisions, without warning or public discussion, based on complicated language in the 2015 Act.
Bottom line: As of now, two of the best retirement planning strategies are no longer available for most people born after 1954, give or take a year or two depending on the specific strategy. Here is a quick rundown of the old Social Security rules, how they were used, and who can and cannot use them based on the new law.
Note: The reset provision, RWA (Request for Withdrawal of Application), is still on the table for anyone who wants to use it. Until another law is written to supersede the 2015 Bipartisan Budget Act, anyone who wants to opt out of “early retirement” and opt back into the system for higher benefits later on can do so. Actually, it is quite surprising that the Obama administration did not try to eliminate RWA, based on the president’s distaste for those who would “… manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits.” {Translation: The elderly can be especially sneaky when it comes to preserving the money they earned by the sweat of their brow. The Federal Government can and will take all possible action to minimize income of retirees}.
The New Rules for “File-and-Suspend” (FAS)
What it was: The FAS allowed Person A in a couple, who had reached full retirement, to file for social security benefits. The spouse, Person B, would then get 50 percent of that benefit amount as a “spousal” payment. At that point, Person A would then request to stop receiving benefits until reaching the age of 70. Person A’s benefits were then suspended so he/she could earn “delayed retirement credits” that amount to about 8 percent per year. However, Person B would continue to receive the spousal benefit check each month.
Who can still use it: SSA has attempted to grandfather the strategy out of existence by allowing some people who are already doing it to continue, and even letting those born before May 1, 1950 to adopt the strategy if they wish. However, all those youngsters born May 1, 1950 or after are out of luck. They cannot use the file-and-suspend strategy, forevermore.
There is a related planning technique that has also been disallowed. No longer can someone who suspends benefits later “change their mind” and claim retroactive payments “as if” they had retired at the earlier date. Someone who used file-and-suspend at age 66 could, perhaps two years later due to a financial emergency, request a lump-sum payout of the two-years’ worth of prior benefits that had been suspended. They would lose their “delayed retirement credits” but get a nice chunk of money in a pinch. Not anymore.


The New Rules for the “Restricted Application” (RA)
What it was: This one is a bit more complicated than the FAS. Under the old law, Person A of a couple could, between age 62 and full retirement age, apply for a spousal benefit OR a retirement benefit. Under the new law, that person MUST accept whichever is the greater amount, the spousal benefit or the retirement benefit.
At full retirement, it was okay to delay one’s own social security application until age 70. That way, Person A was able to receive a benefit check while simultaneously earning delayed retirement credits. Now, the SSA will force a retiree to decide between spousal benefits or retirement benefits. There will no longer be an ability to receive spousal benefits while building delayed retirement credits.
Who can still use it: SSA has allowed very limited use of the RA, or restricted application, under the new law. First, an applicant must be at full retirement age to do it. Second, in order for a person at full retirement age to earn delayed retirement credits while receiving a spousal benefit, that person must have been born on or before Dec. 31, 53.
Keep an eye on the Social Security Administration’s website for further (or any) clarification on these topics. As of this writing, there is scant detail on the SSA site and there are still quite a few ambiguities with the new regulations, especially as to exact birthdates of persons who still can or can no longer use various strategies. Even CPAs and tax attorneys are in the dark about the new rules because they typically use the SSA site as a main source of information, and that well is currently very, very dry.
And because all these regulations are in flux and being tossed about like the political football they are, be certain not to rely on this article for tax, estate or retirement planning. We’re just doing our best to figure this all out like everyone else is, so take our information as a starting point for a discussion with your own tax or financial professional, who in any case knows your particular situation and can offer specific advice.

Mike McVay, Accountant - 850-725-5696 Mike@MikeMcVay.com

Tax season always seems to creep up, but this year, you’ll get a little relief. You have three extra days to file your taxes.
The IRS reported:
Taxpayers have until Monday, April 18 to file their 2015 tax returns and pay any tax due because of the Emancipation Day holiday in Washington, D.C., falling on Friday, April 15. Taxpayers in Maine and Massachusetts will have until Tuesday, April 19 because of Patriot’s Day observances on April 18.

To file a federal tax extension, call Mike McVay, Accountant at 850-725-5696 or email him at bestvirtualbookkeepers@gmail.com

www.VirtualBookkeepersUSA.com