Mid-year Houskeeping

Well 2015 is flying by!   It’s hard to believe it’s time to do mid-year business housekeeping. We always find the middle of the year is a good time to review time off and time off policies with everyone.   It’s a good time for folks to look at how much vacation they have already taken. Everyone should be clear on company vacation policies – if there are rollover hours, caps on rollovers, if vacation allotments will change in 2016 and so on. With that information we can all then think through our plans for the second half of the year, especially during the holidays. At Referential we need to ensure coverage for our clients every business day of the year and it’s not too soon to discuss who wants to take time off at the end of the year.

Let’s not forget taxes. Your business income and expenses for the first half of the year can provide valuable guidance to you on what to expect for the rest of the year – depending on how seasonality effects your finances. This is probably a good time for all of us to check in with our accountant/tax preparer to see if there are any actions to take now to lower the year’s tax bill, both for the business and personally!

We have mid-year forms to file for our 401K, need to finalize the 2016 holiday schedule, we want to decide on holiday gifts for our clients to avoid a rush at year end, and we will plan for the many annual expenses we see in December and January. What else is on your mid-year checklist?

Employee or contractor? It's not always easy to tell

It’s not always easy to clearly classify someone as either an employee or an independent contractor. Why does it matter? Either classification comes with its own reporting requirements.  Relevant taxes must be paid.  Classification can also impact workers' compensation insurance.  Those are just a few of the issues. California has a worksheet with 13 questions to help you make the correct classification. Just three of the issues to consider are below:

Does the person need instruction or supervision? Independent contractors are free to do jobs in their own way, you engage an independent contractor for the end result.  When a worker is required to follow company procedures they are normally an employee.

Can the worker quit or be fired at any time? Independent contractors are engaged to do specific jobs and cannot be fired before the job is complete unless they violate the terms of the contract. They are not free to quit and walk away until the job is complete.

Do you have employees who do the same type of work? If you do that indicates that the worker is an employee. When replacing an employee who is on vacation you have a temporary employee, not an independent contractor.

Referential has always been very careful about this, we get the classification right!

Tax Time Is Nearly Upon Us

Time to send last year’s data off to the accountant.  We had a meeting about a month ago to review preliminary information and make sure we understood what he would need.  That was really helpful, cleared up some confusion right away and settled on a preliminary schedule.    This is our first tax season with this particular professional.  He came highly recommended from a friend with a similar size and type of business.  That personal recommendation was huge in our decision making.  Although, as we’re a company that specializes in customer references,  you would expect we’d want references before making big decisions ourselves! 

All our financial data is in QuickBooks so it was pretty painless to send it off.  Let’s hope the tax results are pain-free too!