Small Business

Expenses incurred or paid before a business starts operations are considered capital expenses. In recent years up to $5,000 ($10,000 in 2010) of the first 60,000 were able to be elected to be expensed with the balance capitalized over 180 months. There are limitations if the total costs exceed a certain amount. $60,000 in 2010)

Although the 2012 federal minimum wage will remain unchanged at $7.25 per hour, six states have announced that their minimum wage will increase on January 1, 2012.
Arizona: announced a 30-cent per hour increase, from $7.35 to $7.65 per hour; an employer can pay a tipped employee a wage up to $3.00 per hour less than the minimum wage – $4.65 per hour.
Florida: announced a 36-cent per hour increase, from $7.31 to $7.67 per hour; tipped employees must be paid at least $4.65 per hour. The minimum wage was previously increased six cents per hour on June 1, 2011.
Montana: The announced a 30-cent per hour increase, from $7.35 to $7.65 per hour.
Ohio: announced a 30-cent per hour increase, from $7.40 to $7.70 per hour; the minimum wage for tipped employees increases 15 cents per hour, from $3.70 to $3.85 per hour. Additionally, employers can pay the federal minimum wage to minors ages 14 & 15-years old, and adults if the business’s gross revenue is $283,000 per year (previously $271,000).
Oregon: announced a 30-cent per hour increase, from $8.50 to $8.80 per hour.
Washington: announced a 37-cent per hour increase, from to $8.67 to $9.04 per hour.
Missouri: announced that the state minimum wage will remain unchanged at $7.25 per hour.
The rate increases are for the “regular” minimum wage. Under federal minimum wage law, states may permit employers to pay a lower hourly rate, sometimes referred to as a subminimum wage, based on certain factors; examples include age (minors), tips, commissions and employer gross revenue.

For information on worker classifications and other labor questions, contact the Department of Labor at their web site: http://www.dol.gov/dol

Federal law requires that certain notices for employee rights be placed in conspicuous locations where employees are likely to see them. The list of posters required are WH-1088, WH-1420, WH-1462, WH-1321 and WH-1313. Posters can be obtained free of charge by contacting the Dept. of Labor at http://www.dol.gov/dol/osbp/public/sbrefa/poster/main.htm or at the US Dept of Labor, Employment Standards, Administration Wage and Hour Division, Washington DC 20210. Speak to your local CPA about the required Department of the Labor sign and poster requirements.

The Small Business Administration (SBA) is a federal program set up to help small businesses obtain financing, usually through private sources. Speak to your local CPA about the feasibility of the SBA assisting your business. The SBA website is sba.gov.

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. If any employee was 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.

Generally, employees are defined either under common law or under special statutes for certain situations.
Generally, anyone who performs services is an employee if you, as an employer, can control what will be done and how it will be done.
This is so even when you give the employee freedom of action. What matters is that you have the legal right to control the method and result of the services.
This definition is important in relationship to classifying workers as employees or independent contractors.
In general, people in business for themselves are not employees. For example, doctors, lawyers, construction contractors and others in an independent trade in which they offer their services to the public are usually not employees.
You are not liable for employment taxes on the payments to non-employees such as independent contractors.

The Annual Federal Unemployment Tax (FUTA) form is due by January 31st, or if all deposits were filed timely, you would then have 10 additional days.

The W-3 is a summary of an employer's W-2s for the calendar year. Employers and other payers must file Transmittal of Income Tax and Tax Statements, or Form W-3 with Copy A of Form W-2 by the last day in February.
The form is filed with: The Social Security Administration, Data Operations Center, Wilkes-Barre, PA 18769-0001. (Certified mail use 18769-0002)