Small Business

You must pay an employee minimum wage. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. The FLSA does not provide wage payment or collection procedures for an employee's usual or promised wages or commissions in excess of those required by the FLSA. However, some states do have laws under which such claims (sometimes including fringe benefits) may be filed. The Department of Labor’s Wage and Hour Division administers and enforces the federal minimum wage law. You may consult with your local CPA or trade associations to learn more about the current practices in your business field.

Generally, the deduction for business gifts is limited to $25 a year for each recipient, if the gift is made to an individual. There is no dollar limit on the deductibility of a business gift made to a corporation, partnership or business entity. Gifts to a corporation or other business entity intended for the eventual use or benefit of a owner, shareholder or employee is subject to the $25 limitation.

Generally, meal or entertainment expenses will be deductible with certain limitations as long as the meal or entertainment expenses are "directly related to" or "associated with" the active conduct of your trade or business and they are not extravagant or lavish under the circumstances. Deductions are generally limited to 50% of the cost. Detailed recordkeeping should be kept to verify the deductions. Entertainment includes activities such as entertainment at nightclubs, cocktail lounges, theaters, golf and athletic clubs, country clubs, sporting events.

The Education Jobs and Medicaid Assistance Act of 2010 signed into law August 10, 2010 repealed the Advance EITC. After December 31, 2010, workers cannot receive Advance EITC in their paychecks. Advance EITC is also known as AEITC or AEIC. Workers who received Advance EITC or AEITC on their paychecks need to file a tax return to report the amount received.

The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax. The below information contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date. Note: Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return. You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years. You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years. You file a fraudulent return; keep records indefinitely. You do not file a return; keep records indefinitely. You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years. Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

DUNS stands for the Data Universal Numbering System. It is a database maintained by Dun and Bradstreet that is used by the Government to identify each contractor and their location(s). This number is required to register with the Central Contractor Register (CCR) that is used by the government's electronic commerce/electronic data interchange (EC/EDI) system called FACNET. You can obtain a DUNS number at no cost by calling Dun and Bradstreet at 800-814-1435

Employers must give or mail employees' copies B, C and 2 of Form W-2 on or before January 31st of the following calendar year. A W-2 must be issued if any of the following criteria exists: if there was any withholding; if wages exceed the amount of one exemption ($2,800 in year 2000; to any employee paid more than $600; or to any person you paid an amount for services if you are in a trade or business. An employer may be subject to penalties for non-compliance.

SCORE or the SCORE Association was previously known as the Service Corps of Retired Executives, but is now recognized as SCORE, "Counselors to America's Small Business." It is a 501(c)(3) nonprofit organization that provides free business mentoring services to entrepreneurs in the United States. The organization also presents business workshops and seminars for a fee. Business mentoring services are provided by both active and retired business executives and entrepreneurs who donate their time and expertise as mentors to assist new and established small businesses. SCORE is a resource partner with the U.S. Small Business Administration.

Worker's Compensation is a program compensating injured workers: a form of insurance required from employers that provides money as compensation for workers who are injured at work or contract an occupational disease. Worker's Compensation is a pretty straightforward type of coverage. It provides payment for all work-related injury medical bills, rehabilitation, and provides a certain amount of income after a waiting period (usually 7 days). It provides a death benefit, as well. Workers Compensation premiums are based on the payroll earned by employees during the policy period which usually is for one year. Rates are determined on the type of work performed. Your insurance agent can explain this coverage as it relates to the laws in your particular state.