Posts Tagged "payroll"

Is your business susceptible to payroll fraud?

Posted on Feb 2, 2018

Unless a small business owner handles all aspects of computing and paying payroll, there is room for fraud. Even if your company has only a few employees — it does not guarantee your funds will be safe. How payroll fraud happens Perhaps one of the easiest payroll fraud techniques is the overpayment of withholding or payroll taxes. Your bookkeeper simply overpays the government. When the refund check arrives, the employee deposits it to his or her personal account. In some cases, the employee will have an account at a different bank but in the company name. Such an account could be used for the fraudulent deposit of other company receipts as well. The greater the number of employees, the easier it is for someone to pull off a scam. Perhaps the payroll clerk has invented a fictitious employee or falsifies hours or commissions for a cooperating employee who shares the stolen funds. Or perhaps the employee holds the payroll deposit funds in his or her own interest-bearing account until it is time to make the payroll deposit to the government. How to prevent payroll fraud Small businesses can be exceptionally susceptible to payroll fraud because they often lack anti-fraud controls that larger organizations have in place. Here’s a few ways you can work toward preventing this type of fraud: Get outside help. A payroll review by an independent accountant may help prevent employee schemes. Divvy up duties. Even in small companies, it is possible to divide office tasks to make employee theft more difficult. Limit payroll access. Figure out who needs to have access to payroll data. That list will likely be very small. Make sure it stays that way. Offer direct deposit. No paper checks means less opportunities for employees to handle funds, meaning greater security all around. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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New year, new job-5 tax tips for job changers

Posted on Dec 6, 2017

There are a lot of new things to get used to when you change jobs, from new responsibilities to adjusting to a new company culture. You may not have considered the tax issues created when you change jobs. Here are tips to reduce any potential tax problems related to making a job change this coming year. Don’t forget about in-between pay. It is easy to forget to account for pay received while you’re between jobs. This includes severance and accrued vacation or sick pay from your former employer. It also includes unemployment benefits. All are taxable but may not have had taxes withheld, causing a surprise at tax time. Adjust your withholdings. A new job requires you to fill out a new Form W-4, which directs your employer how much to withhold from each paycheck. It may not be best to go with the default withholding schedule, which assumes you have been making the salary of your new job all year. You may need to make special adjustments to avoid having too much or too little taken from your paycheck. This is especially true if there is a significant salary change or you have a period of low-or-no income. Luckily, you can use the withholding calculator the IRS provides on its website. Keep in mind you’ll have to fill out a new W-4 in the next year to rebalance your withholding for a full year of your new salary. Roll over your 401(k). While you can leave your 401(k) in your old employer’s plan, you may wish roll it over into your new employer’s 401(k) or into an IRA. The best way is to get your retirement funds transferred directly between investment companies. If you take a direct check, you’ll have to deposit it into the new account within 60 days, or you may be assessed a 10 percent penalty and pay income tax on the withdrawal. Deduct job-hunting expenses. Tally up your job-seeking expenses. If they and other miscellaneous deductible expenses total more than 2 percent of your adjusted gross income for the year, you can deduct them on an itemized return. This includes things like costs for job-search tools, placement agencies and recruiters, and printing, mailing and travel costs. A couple caveats: you can only use these deductions if your expenses were to search for a job in the same industry as your previous job, and you were not reimbursed for them by your new employer. Deduct moving and home sale expenses. If you moved to take a new job that is at least 50 miles farther from your previous home than your old job was, you can also deduct your moving expenses. There’s another benefit for movers, too. Typically, you can only use the $250,000 capital-gain exclusion for home sales if you lived in your primary residence for two of the last five years before you sold it. But there is an exception to the rule if you sold your home to take a new job. Finding a new job can be an exciting experience, and one that can create tax consequences if not handled correctly. Feel free to call for a discussion of your situation. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Contractor or Employee? Knowing the difference is important

Posted on Sep 28, 2017

Is a worker an independent contractor or an employee? As an employer, getting this wrong could land you with an IRS audit and cost you plenty in many other ways.Here’s what you should know: As the worker: If the worker is a contractor and not considered an employee, he/she must: Pay self-employment taxes (Social Security and Medicare-related taxes). Make estimated federal and state tax payments. Handle his/her own benefits, insurance and bookkeeping. As the employer: You must ensure your employee versus independent contractor determination is correct. Getting this wrong in the eyes of the IRS can lead to: Payment and penalties related to Social Security and Medicare taxes. Payment of possible overtime, including penalties for a contractor reclassified as an employee. A legal obligation to pay for benefits. When the IRS recharacterizes an independent contractor as an employee, they look at the business relationship between the employer and the worker. The IRS considers if the employer has the right to control the work (when, how and where the work is done) and the financial relationship (i.e., a contractor has a contract and customers, and invoices the company). The more reasonable your basis for classification and the more consistently it is applied, the more likely an independent contractor classification will not be...

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Tweet shorts

Posted on May 8, 2013

* May 15 is the deadline for calendar-year nonprofit organizations to file 2012 information returns. * Taking an early withdrawal from your retirement account can cost you an extra 10% penalty tax. Get the facts first. * Withdrawals from a qualified retirement plan for certain medical expenses are not subject to the 10% penalty tax. * If your capital losses exceed your capital gains, you can deduct up to $3,000 each year against your other income. * This year medical expenses must exceed 10% of your adjusted gross income to be deductible. The rate is still 7.5% for those 65 and older. * Relief from past payroll taxes is available to certain employers who reclassify workers as employees instead of independent contractors. * The top tax scam on the IRS’s “dirty dozen” list is bogus e-mails sent by thieves trying to steal taxpayers’ financial information. * If you discover a mistake after filing your tax return, you can fix it by filing an amended return on IRS Form 1040X. * The IRS can use part or all of your tax refund to pay other federal or state debts that you owe. * If you owe overdue child support, state income tax, or student loans, the IRS may apply part or all of your tax refund to pay the debt. * If you have foreign bank, savings, or investment accounts, you may be required to file an “FBAR” report by June 28, 2013. * Credit cards should be considered a convenient way to pay, not a source of credit. Any balance due should be paid in full each month. * The Social Security Act became law in 1935, setting the official retirement age at 65. Today 13% of the U.S. population is 65 or...

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Even small companies can be hit with payroll fraud

Posted on Jan 31, 2013

Unless the owner handles all aspects of computing and paying payroll, there is room for fraud in every small business. The fact that your company has only a few employees does not guarantee that you will be safe. Perhaps one of the easiest payroll fraud techniques is the overpayment of withholding or payroll taxes. Your bookkeeper simply overpays the government. When the refund check arrives, it is deposited by the employee to his or her personal account. In some cases, the employee will have an account at a different bank but in the company name. Such an account could be used for the fraudulent deposit of other company receipts as well. The greater the number of employees, the easier it is to pull off a scam. Perhaps the payroll clerk has invented a fictitious employee or falsifies hours or commissions for a cooperating employee who shares the stolen funds. Or perhaps the employee holds the payroll deposit funds in his or her own interest-bearing account until it is time to make the payroll deposit to the government. A payroll review by an independent accountant may help prevent such employee schemes. Even in small companies, it is possible to divide office tasks to make employee theft more difficult. Give us a call; we will gladly review your company’s internal controls to determine what changes may be...

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