Our offices will close at 2:00 PM on Wednesday, 11/25/20 and reopen on Monday, 11/30/20 at 9:00 AM so we can enjoy the Thanksgiving weekend with our immediate families.

We wish all of our valued clients a Happy Thanksgiving. More importantly, we hope everyone remains safe during these trying times.

We understand that clients are anxious to get their stimulus payment.  Last week, the Federal Government began delivering “Economic Impact Payments” to eligible citizens through the Coronavirus Aid, Relief and Economic Security (“CARES”) Act.

Since then, many clients have called us with questions about the stimulus payment. Here are a few things to keep in mind:

Important information about the Stimulus Payment:

1. The IRS is responsible for issuing the payments. While some people have started to receive payment, the IRS has stated that they will be made in waves, with the possibility of receiving a paper check as late as September 2020.
2. If you filed your 2018 and 2019 taxes, you do not have to take any action. Your stimulus check will be paid using the same method you used for your tax return – direct deposit or paper check. 
3. If you are a non-filer, you can still receive a check. You can fill out the form here. https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
4. The IRS plans to mail a letter about the payment to your last known address within 15 days after the payment is paid. It will provide information on how the payment was made and how to report any failure to receive the payment.
5. AKD Consultants does not have information about the eligibility, timing, or distribution of these payments. They are decided and distributed by the IRS.
6. Your payment may be affected if you owe alimony or child support or owe the IRS for overdue taxes from         previous tax years.

Currently, our call and e-mail volume are very high. Below are answers to the most common questions we have been hearing: 

1. Am I eligible, and when will my payment arrive? Find out here: https://www.irs.gov/coronavirus/economic-impact-payment-information-center#eligibility
2. I haven’t received my payment yet. When can I expect it? You can check your payment status here: https://www.irs.gov/coronavirus/get-my-payment
3. The payment deposited into my account is different from the confirmation on the IRS website. Please wait for a letter from the IRS explaining your payment amount. 
4. I did not use direct deposit to file my taxes previously. How will I get my payment? If eligible, you will receive a paper check in the mail.

For more information about your Economic Impact Payment, please visit irs.gov. 

Stay well, and be safe!

We care about the safety and well being of our clients and employees. Therefore, we will be adhering to the Stay at Home Order issued in Massachusetts by Gov. Baker today. Our offices will be closed in Massachusetts starting at Noon on Tuesday, March 24, 2020 and remain closed until Tuesday, April 7th, 2020. Clients will still able to contact our office via telephone and e-mail as we work remotely form our homes. As of now, our office in Boynton Beach, Florida remains open but is subject to change. We will provide updates as things progress in these unprecedented times. Thank you for your support and please be safe.

In accordance with the social distancing guidelines provided the Federal and State Governments, we will not be conducting face to face tax preparation meetings with clients. Clients are still welcome to visit our offices and drop off and pick up all pertinent tax information but we will be limiting visits to 15 minutes maximum.

Our offices will be closed today so our staff can take a breather after a very long tax filing season. We will resume normal office hours starting tomorrow. Thank you to all our clients, family and friends for their support during this time of year.

Massachusetts Employers face new requirements for filing the HIRD Form. In order to avoid penalties HIRD forms must be filed by 11/30/2018. Please read the following Frequently Asked Questions provided by the Massachusetts Department of Revenue to see if you are required to file as an employer: HIRD-FAQ/

This is from ADP Payroll Service:

The U.S. Citizenship and Immigration Services (USCIS) has released a revised version of the Form I-9 (Employment Eligibility Verification). Employers must begin using the new version by September 18, 2017.

Background:

The Form I-9 is used to verify a new hire’s identity and work authorization. All employers must ensure that each employee properly completes the I-9 at the time of hire. The form is broken out into multiple sections:

Section 1 Overview:

Employee must attest that he or she is authorized to work in the U.S.

Completion Deadline: The employee’s first day of work for pay

Section 2 Overview:

Employee must present certain identity and work authorization documents. The employer must examine the document(s) to determine whether they reasonably appear to be genuine and relate to the employee. Employers must record the document number(s) here.

Completion Deadline: Within 3 business days

Section 3 Overview:

If an employee’s employment authorization expires, he/she must present new or updated document(s) and the employer must examine and record the document number(s) here. Employers may also be required to complete this section when rehiring a former employee, depending on how much time has passed.

Completion Deadline: Reverification must be completed no later than the date employment authorization expires

List of Acceptable Documents Overview:

To complete Section 2, the employee must either present one document from List A; or one document from List B and one document from List C. Employers cannot ask for specific documents.

Completion Deadline: This section does not need to be completed. It’s for informational purposes only.

What is different in the new version of the form?

Revisions to the instructions:

Relatively minor revisions, such as changing the name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices to its new name, Immigrant and Employee Rights Section.
Revisions to the list of acceptable documents:

Adding the Consular Report of Birth Abroad (Form FS-240) to List C.
Combining all the certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350 and Form FS-240) into selection C #2 in List C.
Renumbering all List C documents except the Social Security card.

Compliance Recommendations:

By September 18, 2017, all employers must begin using the new version of the I-9, which is dated 07/17/17. In the meantime, employers have the option of using the outgoing version, which is dated 11/14/16. You can find the new version in the New Hire Paperwork section of HR411®.

Posted: July 19, 2017

Taxable Talk
From Russ Fox, E.A., of Clayton Financial and Tax of Las Vegas, Nevada. All of the items below are for information only and are not meant as tax advice. Please consult your own tax advisor to see how each item impacts your own situation.
Boston Bruins 2, IRS 0
June 26th, 2017

The United States Tax Court today looked at whether pregame road meals for a National Hockey League (NHL) team are “meals and entertainment” expense (which would be deductible at 50% of cost) or a “de minimis fringe” and deductible at 100% of cost. As you might be able to guess from the title of the post, the Bruins shutout the IRS today.

First, if you’re interested in some of all of the background work that must be done for hockey, the opinion is a must-read. For example, I did not know that the road team in hockey does not receive any of the ticket revenue for regular season games. But I digress….

The IRS allowed pregame home meals but did not allow pregame road meals as a de minimis fringe; the IRS claimed that road (away) meals were a meal and entertainment expense. Of course, the meals must also be business-related but both the IRS and the Bruins agreed on that. As you might imagine, diet matters to NHL players:

Each away city hotel prepares pregame meals (i.e., breakfast, lunch, or brunch) and snacks that meet the players’ specific nutritional guidelines to ensure optimal performance for the upcoming game and throughout the remainder of the season. The Bruins contract in advance with each away city hotel for the provision of pregame meals and snacks, and the food is made available to all traveling hockey employees. The Bruins initiate the meal contracting process by providing a custom meal menu to the prospective away city hotel requesting specific types and quantities of food. The Bruins tend to keep food options consistent at each away city hotel to avoid players’ having gastric problems during the game. The Bruins always order the same quantity of food to feed all traveling hockey employees.

The de minimis fringe exception first requires that the eating facility be available to all, and not discriminate in favor of highly compensated employees. NHL teams bring a lot more than just the players on a road trip:

During the years in issue the Bruins traveled to away games with various personnel, which typically included: between 20 and 24 players, the head coach, assistant coaches, medical personnel, athletic trainers, equipment managers, communications personnel, travel logistics managers, public relations/media personnel, and other employees (traveling hockey employees). During the years in issue the Bruins’ traveling hockey employees traveled to every away game.

The Bruins easily passed this first hurdle because the food was provided to all. The major issue was whether these were a de minimis fringe benefit:

Employee meals provided in a nondiscriminatory manner constitute a de minimis fringe under section 132(e) if: (1) the eating facility is owned or leased by the employer; (2) the facility is operated by the employer; (3) the facility is located on or near the business premises of the employer; (4) the meals furnished at the facility are provided during, or immediately before or after, the employee’s workday; and (5) the annual revenue derived from the facility normally equals or exceeds the direct operating costs of the facility (the revenue/operating cost test).

The Bruins lease hotel facilities; that would make it appear that they would pass the first test. “The evidence establishes that the Bruins contract with away city hotels for the right to “use and occupy” meal rooms to conduct team business, and therefore these agreements are substantively leases.” And given that they contract with the hotel to provide the food, they meet the operating test.

It appears (from the opinion) that the IRS vigorously opposed the idea that the Bruins passed the “facility is located near the business premises of the employer” test. But the Court disagreed.

First and foremost, the nature of the Bruins’ business requires the team to travel to various arenas across the United States and Canada, and it is not feasible for the Bruins to be a viable NHL franchise without participating in hockey games outside of Boston. The NHL constitution and bylaws obligate each NHL team to play both home and away games during the regular season and, if the team qualifies, postseason games. Not only does the NHL require teams to participate in away games, but it also requires visiting teams to arrive in an away city at least six hours before the away game commences. The CBA imposes an additional requirement that visiting NHL teams travel to the away city the day before game day, if travel by airplane is greater than 150 minutes. Furthermore, if an NHL team fails to participate in an away game it must forfeit the game, lose playoff points, incur financial penalties imposed by the NHL, and indemnify the home team for loss of revenue and other expenses. Therefore, an integral part of the Bruins’ professional hockey business involves traveling throughout the United States and Canada to play away games as dictated by the NHL schedule. The job of the Bruins’ team includes playing one-half of their regular season games away from their hometown arena, and the financial health of the NHL franchise–not to mention the NHL itself–would be adversely affected if teams refused to play away games.

The Court ruled that staying in away city hotels was essential for the Bruins, and it’s clear that it would be impossible for the Bruins to do all this in Boston. “The evidence at trial also establishes that the Bruins could not perform all these activities at the opponent’s arena because of limited access and insufficient space and facilities.” Thus, the Court held that the road hotels were part of the Bruins’ business premises.

The IRS disagreed:

[T]he traveling hockey employees’ activities at away city hotels are insignificant because: (1) the activities at away city hotels are qualitatively less important than playing in the actual hockey game and (2) the Bruins spend quantitatively less time at each away city hotel than they do at the team’s Boston facilities.

The Court, though, thought that the IRS was offsides on these arguments.

Without the preparatory activities that occur at away city hotels the Bruins’ performance during games would likely be adversely affected. Furthermore, respondent provides no precedent to support the argument that business premises are limited to the location where the most qualitatively significant business activity occurs…Although the Bruins do spend quantitatively less time at each individual away city hotel than they do in Boston, this goes to the unique nature of a professional hockey team that is required to play one-half of its games away from home. It is therefore illogical for respondent to ignore the nature of the Bruins’ business and the NHL and analyze the amount of time spent at each away city hotel in isolation.

The Bruins also passed the revenue/operating cost test. “Meals are excludable to recipient employees under section 119 if they are (1) furnished for the convenience of the employer and (2) furnished on the business premises of the employer.” And the Court agreed with the Bruins here:

The evidence establishes that the pregame meals at away city hotels are provided to the Bruins’ traveling hockey employees for substantial noncompensatory business reasons. The Bruins provide pregame meals to traveling hockey employees at away city hotels first and foremost for nutritional and performance reasons…Providing meals to traveling hockey employees at away city hotels enables the Bruins to effectively manage a hectic schedule by minimizing unproductive time (e.g., finding and obtaining appropriate meals from restaurants in each city) and maximizing time dedicated to activities that help achieve the organization’s goal of winning hockey games. Petitioners have provided credible evidence establishing the business reasons for furnishing pregame meals to traveling hockey employees at away city hotels, and we will not second-guess their business judgment.

The IRS conceded the last part of the test (that the meals were furnished during, before, or after the workday). Thus, it was a shutout: Bruins 2, IRS 0 (the petitioners, the owners of the Bruins, were challenging an IRS audit covering two tax years).

Other professional sports teams may be filing amended returns (if they had only been taking half of the cost of meals) because it’s hard to imagine that the requirements for, say, a traveling NFL or NBA team aren’t similar to those of an NHL team. This is a full decision of the Tax Court, so it is precedential.

Case: Jacobs v. Commissioner, 148 T.C. No. 24

As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.

Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.

1. The IRS uses three characteristics to determine the relationship between businesses and workers:
   a. Behavioral control: covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
   b. Financial control: covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
   c. Type of relationship: factors related to how the workers and the business owner perceive their relationship.
2. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
3. If you can direct or control only the result of the work done – and not the means and methods of accomplishing the result – then your workers are probably independent contractors.
4. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
5. Workers can avoid higher tax bills and lost benefits if they know their proper status.
6. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing form SS-8, determination of worker status for purposes of federal employment taxes and income tax withholding, with the IRS.
7. You can learn more about the critical determination of a worker’s status as an independent contractor of employee at the IRS Publication 15-A

Have Questions? Contact AKD Consultants Today.
Call Us At 781-556-5554 Or Simply Click/Touch Here And Fill Out The Form At The Bottom Of This Page

The List Below Is Taken Off Of The SS-8

Behavior Control

1. What specific training and/or instruction is the worker given by the firm?
2. How does the worker receive work assignments?
3. Who determines the methods by which the assignments are performed?
4. Who is the worker required to contact if problems or complaints arise and who is responsible for their resolution?
5. What types of reports are required from the worker? Attach examples.
6. Describe the worker’s daily routine such as, schedule, hours, etc.
7. At what location(s) does the worker perform services (e.g., firm’s premises, own shop or office, home, customer’s location, etc.)? Indicate the appropriate percentage of time the worker spends in each location, if more than one.
8. Describe any meetings the worker is required to attend and any penalties for not attending (e.g., sales meetings, monthly meetings, staff meetings, etc.).
9. Is the worker required to provide the services personally?
10. If substitutes or helpers are needed, who hires them?
11. If the worker hires the substitutes or helpers, is approval required? If “Yes,” by whom?
12. Who pays the substitutes or helpers?
13. Is the worker reimbursed if the worker pays the substitutes or helpers? If “Yes,” by whom?

Financial Control

1. List the supplies, equipment, materials, and property provided by each party:
   a. The firm
   b. The worker
   c. Other party
2. Does the worker lease equipment? If “Yes,” what are the terms of the lease? (Attach a copy or explanatory statement.)
3. What expenses are incurred by the worker in the performance of services for the firm?
4. List the supplies, equipment, materials, and property provided by each party:
   a. The firm
   b. Other party
5. Type of pay the worker receives: Salary Commission Hourly Wage Piece Work Lump Sum Other (specify) If type of pay is commission, and the firm guarantees a minimum amount of pay, specify amount $ .
6. Is the worker allowed a drawing account for advances? If “Yes,” how often? Specify any restrictions.
7. Whom does the customer pay? Firm or Worker. If worker, does the worker pay the total amount to the firm?
8. Does the firm carry worker’s compensation insurance on the worker?
9. What economic loss or financial risk, if any, can the worker incur beyond the normal loss of salary (e.g., loss or damage of equipment, material, etc.)?

Have Questions? Contact AKD Consultants Today.
Call Us At 781-556-5554 Or Simply Click/Touch Here And Fill Out The Form At The Bottom Of This Page

Relationship

1. List the benefits available to the worker (e.g., paid vacations, sick pay, pensions, bonuses, paid holidays, personal days, insurance benefits).
2. Can the relationship be terminated by either party without incurring liability or penalty? If “No,” explain your answer.
3. Did the worker perform similar services for others during the same time period? If “Yes,” is the worker required to get approval from the firm? Is the worker a member of a union?
4. Describe any agreements prohibiting competition between the worker and the firm while the worker is performing services or during any later.
5. Is the worker a member of a union?
6. What type of advertising, if any, does the worker do (e.g., a business listing in a directory, business cards, etc.)? Provide copies, if applicable.
7. If the worker assembles or processes a product at home, who provides the materials and instructions or pattern?
8. What does the worker do with the finished product (e.g., return it to the firm, provide it to another party, or sell it)?
9. How does the firm represent the worker to its customers (e.g., employee, partner, representative, or contractor)?
10. If the worker no longer performs services for the firm, how did the relationship end (e.g., worker quit or was fired, job completed, contract ended, firm or worker went out of business)?

Service Provider or Salespersons

1. What are the worker’s responsibilities in soliciting new customers?
2. Who provides the worker with leads to prospective customers?
3. Describe any reporting requirement pertaining to the leads.
4. What terms and conditions of sale, if any, are required by the firm?
5. Are orders submitted to and subject to approval by the firm?
6. Who determines the worker’s territory?
7. Did the worker pay for the privilege of serving customers on the route or in the territory? If “Yes,” whom did the worker pay? If “Yes,” how much did the worker pay?
8. Where does the worker sell the product (e.g., in a home, retail establishment, etc.)?
9. List the product and/or services distributed by the worker (e.g., meat, vegetables, fruit, bakery products, beverages, or laundry or dry cleaning services). If more than one type of product and/or service is distributed, specify the principal one.
10. Does the worker sell life insurance full time?
11. Does the worker sell other types of insurance for the firm? If “Yes,” enter the percentage of the worker’s total working time spent in selling other types of insurance.
12. If the worker solicits orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments, enter the percentage of the worker’s time spent in the solicitation %
13. Is the merchandise purchased by the customers for resale or use in their business operations? Describe the merchandise and state whether it is equipment installed on the customers’ premises.

Have Questions? Contact AKD Consultants Today.
Call Us At 781-556-5554 Or Simply Click/Touch Here And Fill Out The Form At The Bottom Of This Page

In the above chart you can see that the business owner creates the business entity and transfers business property to the entity. The Business Entity owns the business property. Creditors can only reach business assets.

* In many states, owners of an LLP have only a reduced form of limited liability from the claims of the business’s creditors.

If You Have Questions Specific To Your Business, Contact AKD Consultants Today. Call Us At 781-556-5554 Or Simply Fill Out The Form Below