December 2012 Newsletter

Taking A Look At Resignations

A resignation is an oral or written statement that notifies that an individual is resigning from their position. When an employee tells a Manager that they have made a decision to leave the organization, the manager should ask why the employee has decided to leave, and immediately ask for a resignation note in writing, if the employee has not offered one.

The Written Resignation Note should:

  • Reflect the date that the employee turned in their notice
  • State the intention of the employee to resign, (if possible ask the employee to state why they are resigning)
  • State the last day the employee will work
  • Be signed by the employee

All of these points are important for a variety of reasons:

  • First, the employee can easily recant their resignation if it is not in writing.
  • Second, many companies request that the employee give two weeks notice to the company.
    • The date of the resignation note should be the date the employee gives notice.  In some cases, client companies have very specific rehire policies, or will not pay out full vacation benefits due, if less than two weeks notice is given, so this safeguards the employee and clarifies the decision processes for the company.
    • In other cases, the employee gives two week’s notice, but does not indicate the last day to be worked.  For planning purposes, if the last day the employee will work is not specifically listed, it is best to ask the employee to add the final day of work to the resignation note.
    • In the event the employee gives two week’s notice, and the client manager does not want the employee to stay to train their replacement, or to finish up projects, then the employee should be given two week’s of “notice pay” to coincide with their immediate departure.  If the company does not honor the note, and uses the notice date as the last day of work, then the client manager is now responsible for making the resignation an involuntary termination, and may make the employee eligible for unemployment compensation.
  • Third, if you can get the employee to say why they are leaving, you may gain additional information that should be explored.
    • If the employee says they are leaving to accept a job at XYZ Corporation, this will allow the company to fight any possible unemployment claim, if the employee files unemployment.
    • Additionally, the employee may be leaving for reasons that were previously unknown.  If this is the case, it is important to hold a formal Exit interview before the employee leaves.  In addition, there can be follow up on any issues raised after the employee leaves.
    • Finally, the note and signature memorializes the employee’s decision to leave the company.  (No Management team member should ever force an employee to write a resignation note, but rather ask the employee to record his or her intention to leave so that the business can plan appropriately.)

Sending The Resignation Note and Completing Payroll Forms

  • Managers must send in the Resignation note from the employee, and complete the Four Point HR Employee Forms and send to Payroll.  Please contact the FPHR Director of Human Resources for questions related to Resignations.

2012 Tax Changes For Businesses

Whether filing as a corporation or sole proprietor, here is what business owners need to know about tax changes in 2012.

Standard Mileage Rates: 
The standard mileage rate in 2012 is 55.5 cents per business mile driven, 23 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses: 
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $50,000. The credit can be claimed in tax years 2010 through 2013 and for any two years after that. The maximum credit that can be claimed is an amount equal to 35% of premiums paid by eligible small businesses.

Credit for Hiring Qualified Veterans: 
The maximum credit that employers can take for hiring qualified veterans in 2012 is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations. See Tax Credit for Employers Hiring Veterans This Year (below) for additional details on this tax credit.

Section 179 Expensing: 
In 2012 the maximum Section 179 expense deduction for equipment purchases is $139,000 ($174,000 for qualified enterprise zone property) of the first $560,000 of certain business property placed in service during the year. The bonus depreciation is 50% for qualified property that exceeds the threshold amount.

Source: Forrestall, Galeano & Li CPA LLC

Are You Ready For Tax Season?

Tax season can be stressful even if you have done all the right preparation. When planning for 2012 tax returns, keep the following tax preparation tips in mind:

Contact a tax professional or accountant
One of the best ways to ensure you are prepared is to make sure you have a quality accountant or tax professional on hand to help with your tax preparation and filing needs. If you pay someone to prepare your tax return, choose that preparer wisely. Taxpayers are legally responsible for what is on their tax return even if it someone else prepares it. Regulations require all paid tax return preparers to obtain a Preparer Tax Identification Number (PTIN). Preparers must renew their PTIN each year by December 31.

Collect all of your expense records
Business expenses are the costs of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit. When tracking expenses through an Excel spreadsheet, QuickBooks program, or your accountant, look over your numbers and make sure all the business expenses are accounted for and organized.

Certain beneficial tax provisions are still available in 2012
Consider taking advantage of the following provisions that is still available for 2012:
A deduction of 50 percent of the asset’s cost is allowed for qualifying property placed in service after 2011 and before January 1, 2013. This bonus depreciation provision is scheduled to expire December 31, 2012.

Preparing for tax season can be stress free, but no one can predict with certainty what the future tax season might present. We recommend you contact your tax professional to make contingency plans now so you are not forced to react quickly later.

Holiday Office Safety

It’s the holiday season again. Before starting to decorate your office for the holidays, it’s a good idea to verify that all of your fire safety equipment is in proper working order. Make sure that smoke detectors are working and that fire extinguishers are fully charged and easily accessible. While the holidays are a good reminder to check these devices, it is an even better idea to get into the habit of doing this several times each year.

When setting up any holiday decorations, do not place them in places where other employees can trip or fall over them. Do not let decorative items block or compromise the building’s entryway, emergency exits, or fire sprinkler systems.

Each year, hospital emergency rooms treat about 12,800 people for falls, cuts, shocks, and burns due to incidents involving faulty holiday lights, dried-out Christmas trees, and other holiday decorations.

Christmas trees are involved in about 300 fires annually, resulting in an average of 10 deaths, 40 injuries, and about $7 million in property damage and loss. In addition, there are more than 15,000 candle-related fires each year, which result in 140 deaths and $307 million in property loss, but consumers should still take precautions with their lights and other holiday products.

When setting up holiday decorations around the office, keep fire hazards in mind.

  • Be aware of potential fire hazards when selecting holiday decorations and determining where to place them.
  • Make sound choices about the types of holiday lights you use.
  • Do not use any type of decoration in your office that has an open flame. Select holiday lights that have a safety shut-off switch.
  • Switch off all lights when the office is closed to reduce the risk of fire.
  • Select one person to be in charge of turning off all holiday lights at the end of the day.
  • Never staple or nail light cords, power cords or extension cords to the wall or any other holiday fixtures.
  • Do not connect too many strands of lights together.
  • If you decorate the outside of your office, verify that any lights you use are rated for exterior use.
  • Avoid overloading your existing multi-sockets with new plugs. Creating a mess of sockets and cords can lead to accidents and fire-hazards, so keep everything well organized and minimal.
  • Give all sockets and power cords a thorough visual check-over for any fraying or damage.

Enjoy the holidays, but be safe.

For Our Clients: Payroll Corner

Four Point HR will be closed December 25th in observance of the Christmas holiday and December 31st – January 1st for the New Year holiday. We will distribute a holiday payroll schedule to clients during the first week of December and will request a response regarding holiday payroll processing schedule from all clients. We thank you in advance for a timely response to this notice and wish you, your colleagues, and your families a happy and safe holiday season.

Minimum Wage Updates

Minimum Wage rates will increase in several states, effective 01/01/2013. The Federal minimum wage will remain the same at $7.25 per hour and $2.15 per hour for tipped employees. The following states have approved a minimum wage increase.

  • Arizona: From $7.65 to $7.80. Tipped Employees from $4.65 to $4.80.
  • Florida: From $7.67 to $7.79. Tipped Employees from $4.65 to $4.77.
  • Montana: From $7.65 to $7.80.
  • Ohio: From $7.70 to $7.85. Tipped Employees from, at least, $3.85 to, at least, $3.93. Note: State minimum wage provisions only apply to business with annual gross receipts of more than $288,000 for 2013.
  • Oregon: From $8.80 to $8.95.
  • Rhode Island: From $7.40 to $7.75.
  • Washington: From $9.04 to $9.19.
  • Colorado has proposed a minimum wage increase that was not yet approved at the time of this notice.
  • Missouri and Vermont minimum wage determinations are pending.

Four Point HR will continue to monitor states for any additional changes for 2013. Notices for affected clients will be distributed in December.