Employers can start preparing for year-end.

Before you know it, the year will be over.  If you are a business owner with employees, your to-do list is quickly growing.  

If you issue any of your employees a holiday or year-end bonus, be sure that you are still withholding the appropriate income and FICA (social security and medicare) taxes.  Any bonus monies given must be included in the total wages on your year-end payroll forms and the employee’s W-2.

The IRS will be looking for your W-2s and 1099s a little earlier this year, whether you file them electronically or on paper.  The filing deadline has been moved up to January 31, 2017 for both forms.  If you are using a software program for your payroll, the IRS will now accept most computer generated laser copies.  But you should check with your software manufacturer to be sure. You may also file your company W-2s directly through the ssa.gov website using the Business Online Services.  There is a registration process for the service, but the filing process is fairly simple.  In years past, employers had until the end of February to paper file these, and even longer if you were filing them electronically.  The deadline to issue the forms to employees and subcontractors will remain January 31st, as it has been in previous years.  It is always good practice to have your employees verify their personal information on their W-2s for any errors before submitting them, so you can make any necessary changes. The SSA/IRS receive thousands of forms with incorrect information each year, which prompt notices to be sent and refunds to be held back. The IRS is hoping to curb fraud and pick up errors by receiving these forms earlier.  This will hopefully allow the IRS to verify information quicker and issue refunds sooner.  Although, the law states any refunds that include the Earned Income Tax Credit or the Additional Child Tax Credit cannot be issued until February 15th.  

It is recommended that you have your employees review their current W-4 on file or fill out a new one for 2017.  As their personal or financial situations change, they may need to reevaluate how little or how much they are having withheld from their paychecks.  W-4s can be printed directly from irs.gov.

Review your records to see who should be issued 1099s.  The most common recipients of 1099s are individuals and unincorporated businesses who performed services and were paid $600 or more during the year.  Amounts should be listed as nonemployee compensation in box 7.   Rents of $600 or more paid must be reported in box 1.  You are not required to issue 1099s to incorporated businesses.  You should already have any subcontractor’s tax information in your files before issuing any payments, but if not, now is a good time to have them complete a W-9, also available at irs.gov.  It is good practice to obtain this information from your subcontractors before sending any payments to them, which will increase your odds of obtaining the information and avoiding any unnecessary scrutiny from the IRS.

Cheryl is an Enrolled Agent at Gamwell, Caputo, Kelsch & Co., PLLC in Conway, NH and can be reached at 603-447-3356.  Cheryl welcomes any article feedback or questions for future article consideration.  

Cybersecurity and You

We hear of a new threat, scam or hack every day. As overwhelming as this subject is, there are things that you can do that will reduce the risk of your personal and financial information from being compromised.
The IRS, which has issued many communications in this area, has released these security awareness tips:

  1. Protect your wireless network. Set strong password and encryption protections for your wireless network. If your home or business Wi-Fi is unsecured, it allows any computer within range to access your wireless network and steal information from your computer. Do not share sensitive data when using public Wi-Fi. If a public Wi-Fi hotspot does not require a password, it probably is not secure.
  2. Use Security Software. Security software will help protect your computer and your data from numerous threats posed by malicious programs, also known as malware. Many computers come pre-installed with firewall and anti-virus protections. Make sure these are turned on. Set your anti-virus program for automatic updates to allow for protection against emerging anti-malware threats. Make sure you add security to all your digital devices (no matter which brand), including your laptop, tablet and mobile phone. Never download “security” software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on your computer. It urges you to download a security software package. Don’t fall for it. It most likely will install some type of malware. Reputable security software companies do not advertise in this manner.
  3. Use encryption software to protect sensitive data. If you keep sensitive financial data such as prior-year tax returns or important records on your hard drive, consider investing in encryption software to prevent unauthorized access by hackers or identity thieves.
  4. Set password protections for all devices and online accounts. Whether it’s your computer, tablet or mobile phone, always set a password requirement for accessing the device. If it is lost or stolen, your device is still protected from access. You should use strong passwords with 10 or more digits that include letters, numbers and special characters. Do not use the same password for all your accounts, especially your financial accounts. Change your passwords every few months.
  5. Avoid Phishing Emails. Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information. Do not open a PDF document or picture attached in an email from an unknown source. It may contain malware. A favorite tactic of cybercriminals is to pose as businesses, credit card companies, or even the IRS and ask to update your account or divulge your Social Security number. Reputable companies never ask for sensitive data over unsecured channels. Additionally, the IRS doesn’t initiate contact by email, text messages or social media to request personal or financial information.
  6. Back up your Data. Periodically back up all the data on your computer via your protected cloud storage or a separate disk. If your data gets stolen or you suffer a disk failure, recovery is easy if you have routinely backed up your information.
  7. Protect your children. If children use any internet enabled device, make sure to have parental control options to protect them from malicious websites. Educate your children about the threats of opening suspicious web pages, emails or documents.

To learn more about this topic: https://www.irs.gov/individuals/taxes-security-together

It is also advisable to seek out a computer professional to assess your computer/device security needs in order to help implement any necessary changes.

The internet has made our lives easier but, unfortunately, it has also made it easier for unscrupulous people to steal others identities. Just like any other crime, there are no ways to protect yourself wholly, but vigilance is the best way to lessen the chances of having a fraudulent attack happen to you.

Patricia is the IT and Office Manager at Gamwell, Caputo, Kelsch & Co., PLLC in Conway, NH and can be reached at 603-447-3356. Patricia welcomes any article feedback or questions for future article consideration.