- What information do you need when you hire a new employee?
- Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Options to all new hires. This requirement took effect on October 1, 2013. The purpose of the Notice is to inform employees of the availability of the Health Insurance Marketplace created in accordance with the ACA. All employers subject to the Fair Labor Standards Act (which encompasses almost all employers) must provide the Notice, regardless of whether the employer offers health coverage.
- Employers must complete a Form I-9 (Employment Eligibility Verification) for each newly hired employee. The form is used to confirm that the employee is authorized to work in the United States.
- All new employees must complete a federal Form W-4, Employee’s Withholding Allowance Certificate. This form tells the employer how much federal income tax to withhold from the employee’s pay.
- Federal law requires that employers submit certain information to their state regarding each new hire. Under federal law, employers generally must report new hires within 20 days of the employee’s start date, but several states have shorter timeframes. Texas Employers must report the following information within 20 days of the first day on the job for all new employees:a. federal employer identification number,
b. employer name,
c. employer address,
d. employee Social Security number,*
e. employee name,
f. employee address, and
g. first day of paid work.
The IRS recently provided a new interpretation of the one-rollover-per-year rule for IRAs by withdrawing a prior proposed regulation that had allowed taxpayers with multiple IRAs to make one rollover per year from each IRA. Starting in 2015, taxpayers will only be able to make one rollover per year no matter how many IRAs they own.
Sales and Use Tax from Garage Sales: The state comptroller has issued guidance on applicable sales tax from the sale of personal items sold at garage sales or through auction websites or advertisements. However, the occasional garage or yard sale will probably not generate a sales tax obligation.
The Internal Revenue Service on Tuesday released a “Taxpayer Bill of Rights” to let taxpayers know of existing statutory and administrative protections. IRS Commissioner John Koskinen recently unveiled a list of 10 rights at a news conference in Washington, D.C. The bill of rights has been under discussion for some time and the Commissioner said he would seek legislative enactment of these rights.
A few reminders that many small businesses overlook when hiring new employees:
- Prepare an employee handbook which explains what your company’s policies are.
- Do not rush the hiring process, take your time to find the right person for the job
- Avoid improper pay practices which can later turn into a problem
- Maintain a personnel file on each employee and include all relevant and required information
These simple suggestions can avoid problems later on. Call our office if you have any questions!
Forgetting or deliberately not picking up your mail and later challenging your tax liability in a “collection due” process by saying you did not receive it will not work.
The Tax Court has recently held that if the IRS sends a notice of deficiency to a taxpayer’s legal residence and that notice is returned to the IRS by the Postal Service because the taxpayer didn’t pick up the notice after many weeks, the taxpayer cannot argue that he didn’t receive the notice. It is always a good idea to open and read any correspondence received from the IRS!