McVay has built his accounting business with start up small businesses. Now, many of these businesses have become stable, high volume, high profit businesses. McVay starts most his small businesses at $150.00 per month bookkeeping services. McVay also provides a full QuickBooks Online Subscription with all monthly services. 

The federal government also issued a $1,200 payment earlier this year with similar eligibility criteria. If you did not receive the first check, you can also use your tax return to claim the money.
“For 2021, eligible taxpayers who did not receive the full amount can claim it as the Recovery Rebate Credit when they file their 2020 tax return,” the IRS said. “Use IRS Free File to file and claim this important benefit.”
Some Americans aren't eligible to receive the cash payment: College students and dependents over the age of 17 won't receive the money, nor will immigrants who don't have a Social Security number. Some high earners who received a check during the first round of stimulus payments will also not qualify for the second round.

GENERAL FEDERAL CHILD LABOR RULES

Under the Fair Labor Standards Act (FLSA), there are essentially four different tiers for labor standards covering non-farm employment for children. They break down as follows:

• Children under the age of 14,
• Children 14 and 15,
• Children 16 and 17, and
• Children 18 and older

The first tier of labor standards for children covers those who are under the age of 14. In general, such children are not allowed to perform any non-farm work for any number of hours. Children delivering newspapers, babysitting on a casual basis, working as an actor or model, or employed as a homeworker making evergreen – and only evergreen – wreaths (someone in Congress must have had a serious “axe to grind” against deciduous trees, huh?) are exempt from these rules, however, and may generally work at any age (at least from a Federal labor law perspective).

The second tier of child labor laws covers children who are 14 and 15 years old. Such children may be employed, but have a substantial amount of restrictions placed upon that employment, including the numbers of hours they can work per day and per week (which varies depending upon whether school is in session), when those hours can be worked (which varies depending upon the time of year), and what sorts of jobs they can have.

By the time children are 16, they can generally work as many hours as they wish and at whatever time(s) they like.  In general, the only restrictions to which they are subject are those that prevent them from working jobs that have been deemed “hazardous” by the Department of Labor, such as jobs that involve “exposure to radioactive substances and ionizing radiation”, “coal mining”  or “working in wrecking , demolition, and ship-breaking operations”.

And finally, once a child reaches the age of 18, there are no longer any restrictions on their employment. They are considered full adults in the eyes of the law, and may work whatever hours they want (subject to “normal” labor restrictions), whenever they want, and doing whatever they want.

EXEMPTION TO FLSA CHILD LABOR LAWS FOR THE EMPLOYMENT OF A CHILD IN A PARENT-OWNED BUSINESS
Now if all of that sounds utterly complicated, but you’ve been considering hiring one or more of your own young children to work with you in your business, here’s the good news… unless you own a hazardous business, it likely doesn’t matter!

In addition to more narrow exemptions to the general rules, such as those that allow certain student-learners to engage in certain otherwise-prohibited work, there is a broad exemption to the child labors laws for young children employed in businesses owned solely owned by their parents. Such children may, at any age, typically work an unrestricted number of hours, at any time of day or night, so long as the parent-owned business is not involved in mining, manufacturing, or one of the aforementioned occupations designated as hazardous by the Department of Labor.

Notably (and despite a substantial number of generally credible, well-respected websites saying otherwise), this exemption is available regardless of the entity structure of the parents’ business, so long as the business is wholly owned by the parents. In fact, as stated in Section e00(a)(2) of Chapter 33: Child Labor, of the Department of Labor’s Wage and Hour Division’s Field handbook:

The exemption applies only when the parent is the sole employer of the minor. If the parent is a partner in a partnership or an officer of a corporation, the parental exemption does not apply unless the parents are the only members of the partnership or the sole owners of the corporation.

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

FFCRA Update: Mandated Leave Ending, Credits Extended

The FFCRA created new paid family and paid sick leave provisions for certain reasons related to COVID-19. The COVID-related Tax Relief Act of 2020 (CTRA) extends the tax credit portion of the FFCRA for employers that voluntarily offer paid leave, but not the mandatory leave portion, through March 31, 2021. FFCRA earnings and memo codes needed for employers to claim these tax credits will be available for use through March 31, 2021.

IMPORTANT: Please note that eligible wage amount limits were not reset for 2021.

FFCRA Wage Amount Limits
Wages eligible for the tax credit are $5,110 for care required for the employee; $2,000 for care provided to others; and $10,000 in family leave if the employee is unable to work or telework. These amounts are not reset for 2021. Therefore, if such amounts were exhausted for an employee in 2020, any leave payments to that employee in 2021 do not qualify for the tax credit in 2021.

McVay's 1099 Proprietor system will track and send W-9 forms electronically and when prepared will send your 1099's to your vendors through our secure online portal electronically. McVay monthly clients will receive this service automatically.  

Taxes:

• How do I upload my tax documents for a remote meeting?

Please email us your full name, email address and phone #. We will call you when we setup your secure online portal.

• Can I upload my tax documents to the secure portal via my cell phone or tablet?

Yes, our user interface web page login is mobile friendly. Login and upload your pics for the documents.

• How do I make a tax appointment?

Tax appointments are made via our website scheduler link, email or phone call. This is for in-office or remote (Zoom, Skype, Google Meet) meetings.

• I want a remote meeting, however I don’t have any of the meeting apps.

We can conduct our meeting via a phone call.

• How can we get you our tax documents if we can’t upload to your secure portal?

You can mail us your documents to our office, take pics of documents (max 5 pages) (Special Text # needed, call us) or our secure fax at 877-202-6314. Please DO NOT email documents with your SSN not mask.


Accounting Services:

• Do you only use QuickBooks in your practice for clients?

Yes, Mike McVay is a Certified QuickBooks ProAdvisor with over 25 years experience with all of Intuits products. QuickBooks has 92% of the market share and is McVay’s preferred software.

• Can I still get my accounting done by your firm if I still use QuickBooks Desktop?

Yes, we prefer to use QuickBooks Online for the ease of remote accounting, however under certain circumstances we can use your desktop version to complete your bookkeeping and accounting processes.

• Do we have to subscribe to QuickBooks Online for you to do our bookkeeping?

No, All new clients to McVay Business Services will receive the full subscription for life of your account for using our services. If you already have a subscription to QuickBooks online, you will need to continue with that subscription. ​

Recent studies show that people that use individual tax software to prepare their own taxes could land you an I.R.S. Audit. Self-prepared returns are five time more likely to be targeted for an audit.

The I.R.S has special coding that looks at your return and scores the return based on many factors, including but not limited to if the return was self-prepared, expenses are not an average ratio based on others in your geographical area or by business industry type.

 The IRS has a computer system called Discriminant Information Function (DIF) that's specifically designed to detect anomalies in tax returns. It scans every tax return the IRS receives. DIF looks for things like duplicate information—maybe two or more people claimed the same dependent—as well as deductions and credits that just don’t make sense.

The computer compares each return to those of other taxpayers who earned approximately the same income. For example, most people who earn $40,000 a year don’t give $30,000 of that money to charity and claim a deduction for it, so DIF is pretty much guaranteed to throw a flag if you do. DIF's flag prompts review by human agents. 
Many of the current tax software use an array of questions to determine your ability to deduct or apply credits you may be intitled to. If one of these questions are answered wrong or by mistake, then your return could be incorrect when you complete it. Current law needs to be applied to your individual circumstances. These questions are broad and sometimes confusing.

Sole proprietors and freelancers are entitled to a host of tax deductions that most other taxpayers don’t get to share, such as home office deductions, mileage deductions, and deductions for meals, travel, and entertainment. These expenses are tallied up on Schedule C and are deducted from your earnings to determine your taxable income from your business. 

DIF is on the lookout for deductions that are above the norm for various professions. It might be expected that you would spend 15% or so of your income on travel each year if you're an art dealer, because that's about what other art dealers spend. You can probably expect the IRS to take a closer look at your return if you claim 30%.

Have you noticed those occupational codes that appear on your tax return? The IRS uses those to make sure that your travel expenditures are in line with others who report those same codes. You'll most likely get a second look from the IRS if you've claimed a lot more than the average for your profession.

Likewise, if you use your car for business purposes and you want to deduct your expenses or mileage, the IRS doesn’t want to hear that 100% of your travel was solely for business purposes, especially if you have no other vehicle available for personal use. Presumably, you drove to do personal errands at some point. 

Mike McVay is a licensed Tax Professional with over 25 years experience preparing individual, sole-proprietor, partnership, LLC, S-Corp and C-Corp tax returns. McVay charges fees that will fit your budget and has many options when it comes to tax appointments. Remote tax appointment available in 2021.

McVay says that many new clients have come to seek his professional tax preparation that used self-prepare tax software in the past. In some cases McVay has found additional money due to the taxpayer when reviewing past years returns.  Many are not paying much more than the past years tax software cost to get their taxes done professionally. 

Mike McVay, Tax Accountant * 850-722-5696 * Mike@MikeMcVay.com
 

If you've been collecting unemployment benefits, you may not realize that that income, like your regular paycheck, isn't yours to keep in full. While unemployment benefits aren't subject to the payroll taxes that are used to fund Social Security, you have to pay federal taxes on that income.
Generally, you'll be given the option to have 10% of your weekly benefit withheld for this purpose before you start collecting that money. Otherwise, you can collect your benefits in full and then make estimated quarterly tax payments to the IRS.
But you can't sit back and assume that you won't face any tax liability on those benefits, because that's just not reality. And unfortunately, a lot of people are uninformed in this regard. In a recent survey, 38% of respondents said they didn't know that unemployment benefits were taxable in the first place. Furthermore, 61% of respondents have not withheld or set aside money from their unemployment pay for their 2020 income taxes.

If you're collecting unemployment benefits and don't want to deal with a tax headache later on, try having a portion of that income withheld for federal tax purposes -- even if you didn't do so initially. (Some states will allow you to change your tax withholding once you begin collecting benefits.) And if you've been collecting benefits for the better part of the year and haven't paid a dime of taxes on that money, plan to make an estimated quarterly payment to the IRS by Jan. 15. If you let that tax debt sit, thinking you'll just repay it when you go to file your 2020 return in April 2021, you'll risk racking up interest and penalties on that unpaid sum.
Remember, our tax system works on a pay-as-you-go basis. The IRS wants its share of your unemployment income as you collect it. The better you prepare now, the less likely you'll be to encounter a shock when April rolls around.