Archive for the ‘Small Business Tips & Tricks’ Category

The U.S. Court of Appeals for the Eighth Circuit recently upheld a lower court’s ruling denying summary judgment to a restaurant that claimed a tip credit against all of the wages earned by its servers and bartenders, even though the employees spent considerable time performing tasks for which they did not receive tips [Fast v. Applebee's International, Inc., CA8, Dkt. No. 10-1725/10-1726, 4/21/11].

Servers and bartenders at Applebee’s restaurants filed a lawsuit claiming that they regularly spent more than 20% of their time on general preparation and maintenance, activities that didn’t generate tips. Applebee’s took a tip credit for all work performed by its servers and bartenders, including the general preparation and maintenance work, even when it amounted to more than 20% of the employee’s work. The servers contended that this was a violation of the Fair Labor Standards Act (FLSA) and that Applebee’s owed them additional compensation.

The Texas Comptroller’s Office has transitioned from its original WebFile Sales Tax System to the new MyCPA WebFile system for sales tax.  The “CPA” in MyCPA stands for Comptroller of Public Accounts, not Certified Public Accountant.  It is for use by all taxpayers, not just Certified Public Accountants.

MyCPA is a secure login portal that allows an individual or authorized representative to set up one user account with access to multiple taxpayer IDs and their related taxes and business accounts.

Confused about when these expenses are considered to be legitimate, when a meal is classified as “travel” and when it is classified as “meals and entertainment,” whether meal and entertainment expenses are reimbursable to your employees?  Here are some guidelines in order to substantiate the expenses and make sure that reimbursements are nontaxable to employees—excluded from gross income and exempt from FIT, FICA and FUTA:

The Texas Comptroller’s Office has new information for 2011 franchise tax filing, including the Franchise Tax Web Service, passive entity reporting, apportionment, temporary credit election, extensions and mandatory electronic funds transfer (EFT), and combined group extensions. (Texas Tax Policy News 4, 04/01/2011.)  WebFile is still a free service.

To reflect changes in the employee rate for social security and the elimination of advance payment of the Earned Income Credit*, there have been big changes to form 941, Employer’s QUARTERLY Federal Tax Return.  Form W-2, Wage and Tax Statement, now includes a new code for reporting designated Roth contributions under a governmental section 457(b) plan.

But the IRS will no longer send you forms or instructions in the mail.

With the increased emphasis on e-filing, the IRS has been implementing plans to stop mailing tax packages to business taxpayers. Last fall, the IRS announced it would no longer mail annual income tax returns to businesses. In early March, the IRS added several forms and instructions to the list of discontinued mailings, most notably the Form 941, Employer’s QUARTERLY Federal Tax Return.

*EIC-eligible individuals can claim their credit when they file their 2011 federal income tax returns. Employees who expect to be eligible for the EIC and who will have income tax withheld from their wages in 2011 may reduce their withholding. This option allows those employees to receive a portion of the credit throughout the year.