McVay Business Services is offering FREE one-on-one QuickBooks Online Training. No purchase is necessary, however if you become a client with McVay Business Services in Florida, Alabama or Texas you will receive a FREE QuickBooks Online Subscription for life of your account. Owner's of S-Corps receive FREE owner payroll processing.
Call Mike McVay today to reserve your spot for this limited time free training offer.
850-725-5696 - Mike@MikeMcVay.com
How to Calculate OT with Two Rates of Pay
Use the weighted average method to calculate overtime pay for an employee with two rates of pay.
When you pay an employee two rates of pay, calculating overtime pay can be a conundrum. You want to calculate OT at the lower rate; the employee thinks you should calculate it at the higher rate. Let’s break it down together using an example.
Step One: Calculate the straight rate of pay.
Still have questions? Your payroll specialist can help walk you through the particulars of your situation. McVay Business Services workers with Integrity Employee Leasing. 850-725-5696
How to Begin to Prepare for Changes to the Health Care Law.
The House of Representatives passed its version of a repeal and replacement of Obamacare. The American Health Care Act is now in the Senate and it will be a long, arduous effort until the Senate passes a replacement bill. And then, it's on to reconciliation. In other words, it will be several months before the replacement legislation is final. But the expected delay won't stop clients from asking you questions about their health insurance prospects, as well as about tax planning.
Here are six tax changes in the House bill:
1. The individual mandate would be repealed.
2. The premium tax credit would be repealed, but not until 2020.
3. The employer mandate would be repealed.
4. The 3.8% tax on net investment income would be repealed, as well as the 0.09% Medicare tax on wages above $200,000 ($250,000 MFJ).
5. The medical deduction haircut would be reduced from 10% of AGI back to 7.5%.
6. The $2,500 cap on flexible spending accounts would be eliminated.
As you can see from this short and very straightforward list, it's likely that the final legislation will include each of these proposed changes in some manner or other. What tax planning advice can we offer in anticipation?
WARNING: Although the House bill makes most changes effective immediately, the final bill may not.
Planning. When the effective date of a repeal of the individual mandate is known, healthy individuals can drop their health insurance without fear of penalties, or at least they can hunt for "skinnier" and less expensive insurance. Sickly individuals will have premium subsidies for a few more years (2020 in the proposed legislation). Many elderly individuals will also benefit from a few more years of premium tax credits to provide temporary relief from an age-based premium increase allowed by the House bill. The Congressional Budget Office (CBO) estimates that premiums for a 64-year-old earning $26,500 a year would increase by a startling $14,400 in 2026 under the House bill.
Planning. Employers who added a group health insurance plan because of Obamacare can drop their benefit plan or ask employees to pay a larger share of premiums. Obamacare's affordability requirement would disappear with the employer mandate. Because the House bill allows states to opt out of minimum essential coverage requirements and allows employers to do inter-state shopping for insurance, employers can look nationwide for cheaper plans with less coverage and thus pass more risk onto their employees.
Planning. The proposed repeal of the 3.8% tax on net investment income means that clients who would otherwise be subject to the tax should consider delaying sales of appreciated property until we know the repeal's effective date. Maybe an installment sale can hedge the bet, allowing the sale now but the taxable event in another year. An employee expecting a large bonus may want to delay it to save a little Medicare tax. Although we better remind clients about that old saying: "a bird in the hand is worth two in the bush".
Planning. Delaying medical and dental expenses until the bill is effective may result in little tax savings for some clients with medical above 7.5% of their AGI. If the employer and the employee respond to the effective date of the FSA change, the client with large out of pocket medical expenses may save taxes with the repeal of the $2,500 limit on FSAs. President Trump proposed in his tax reform brief that the medical expense deduction be eliminated. Thus, whether it is an Obamacare replacement or a tax reform proposal, the FSA is important tax planning advice.
The legislation that enacted Obamacare (the Affordable Care Act) is 2,700 pages. There are many, many provisions—tax and non-tax. Each can be a sticking point to final legislation including pre-existing conditions, minimum essential coverage, a state’s right to opt out, Medicaid expansion, etc. It will be a long haul until we know the final results.
Mike McVay, Accountant - Integrity Employee Leasing - 850-725-5696 - Florida Employer Specialist.
When to Hire a PEO
A professional employer organization (PEO) is a phenomenal way to manage certain aspects of your company. PEOs form a partnership with companies, and through outsourcing, they assist with a variety of services such as payroll, human resources, benefits and workers compensation, just to name a few. As any business owner may come to realize, these are all concerns and services to be taken care of in the standard running of any company. McVay Business Services is a one stop shop for payroll processing and PEO services that provide you cost effective solutions to your payroll and HR process.
The Role of a PEO
Hiring a professional employer organization benefits you by assisting with the load of many administrative duties. Having professionals trained in the handling of such tasks is a great way to maximize the efficiency of your business. A PEO reduces the need to have entire departments dedicated toward taxes, human resources, and worker’s compensation. When you hire a professional employer organization, you allow yourself the ease of simply writing one check to the PEO instead of devoting a substantial number of your staff toward all of these tasks individually. If you are interested in running your business with maximum efficiency, it is time to hire a professional employer organization. McVay Business Services provides these services through a top rated PEO company.
PEO Assistance with PER
As a business owner, you understand the many needs of your company along with the impracticality of trying to address them all yourself. That is why at McVay Business Services, we assist you in finding solutions and relieving you of many time consuming administrative tasks that burden your potential to grow. Our professionals are well trained and can ensure that your business is run effectively and efficiently. For more information, call us at 850-725-5696 and ask about our free cost analysis today.
Is your PEO (Payroll Service Provider) not up to the task? We have a solution!
McVay Business Services recommends Integrity Employee Leasing for all your payroll, workers comp, benefits & HR administration. Integrity is a leader in the industry and invites all of McVay's service area employers to look at the difference a top PEO could have on the success of their business.
Call Mike McVay today for a full demo of what Integrity can mean for your company. Mike@MikeMcVay.com - 850-725-5696
Mike McVay, Tax Accountant Blog
Certified QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL
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