CPA Practice Advisor

SEP 2016

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September 2016 • www.CPAPracticeAdvisor.com 15 As you prepare to meet with clients this fall, take the time to consult with them regarding the ACA and how they can ensure compliance. Work with them to make sure they are keeping the necessary records to meet filing deadlines. Accurate recordkeeping will prevent last minute scrambling as deadlines approach. is is especially important next year as filing dates have moved up by a few months, in part due to extensions expiring. For tax year 2016, businesses will need to send Forms 1095-B and 1095-C by January 31, 2017 to employees and file Forms 1094-B, 1095-B, 1094-C and 1095-C by February 28, 2017 (paper) or March 31, 2017 (electronically). Accurate and detailed recordkeep- ing will also help your clients avoid penalty fees for incorrectly classify- ing employees. With a recent stream of employee classification lawsuits, like the ones against Uber, it's clear that many workers feel they are being denied worker benefits, especially healthcare. Classif ying employees can be tricky since many guidelines are not clear and vary across state lines. As a trusted advisor, you have an opportunity to provide expert guidance to help your clients resolve any employee classification concerns they have or direct them to the key people who can provide the services they need, such as payroll or legal counsel, if necessary. "Contingency workers continues to be a hot topic for a lot of busi- nesses right now, and it will be for a while. We will continue to see more lawsuits like the ones against Uber as more pressure is put on classifying on-demand workers as employees," said John Haslinger, vice president of strategic advisory services for A DP. "Small business owners need to have their legal counsel diligently look over their independent worker contracts before hiring someone. If there are any questions about the conditions of their employment, consider hiring that person as a short-term employee, or even not at all, because incorrectly classifying someone as an independent contractor has a steep penalty." Previously, employers needed to show they offered health insurance coverage to at least 75 percent of their workforce, but that has increased to 95 percent this year. is makes properly classifying employees even more important because if enough workers are misclassified, a business could fall below that 95 percent requirement. Employers now have to pay a penalty up to $2,160 per employee plus any back pay that is owed to the employee(s) as a result of misclassification. A nother way employers have fallen below the 95 percent rule is by misclassifying employee time off. It's important that the correct codes are used for time off, even if it is consecu- tive. For example, if an employee takes three weeks off – one for vacation and one under the FMLA, the IRS wants to know each reason. Failure to do so could have serious implications. "Employers who undercount FMLA have a real risk of not hiing the 95 per- cent requirement, so it's important to have good records and a good payroll system. Accountants should work with their clients to ensure they have this data and it's available for audit if asked. If your clients don't have good data, start working with them now to clean up their systems and find a storage solution. Ideally, they need to maintain their payroll data for at least seven years," said Haslinger. So what triggers an ACA compli- ance IRS audit? An early common trigger is employee complaints. is usually happens if a worker has been told they are not eligible for the healthcare subsidy or that they have to pay it back. An ongoing or pending IRS audit in another area can also trigger an ACA compliance audit. Poor recordkeeping or problems in other areas could lead the IRS to take a broader look within an employer's recordkeeping. However, this can be eliminated by helping your clients make sure all their documentation is consistent and in order. Explain to them the importance of making sure what they communicate to employees matches what's outlined in their wrien plan and help them move to systems that allow them to keep accurate and detailed records. "ere is a real opportunity for accountants to be more consultative in how they approach the ACA with their clients. ACA compliance is a huge burden for businesses with less than 200 employees and they may not have the same resources as larger corpora- tions. By differentiating in services for small businesses and knowing who the key players are in the field, accounting professionals have a real opportunity to provide value-added service to their clients," said Haslinger. Time Off, ACA Regulations and Your Small Business Clients By Taija Sparkman, Assistant Editor T he Affordable Care Act continues to be an important topic for businesses, particularly small businesses. Even though the ACA has been around for a few years, new regulations are still being implemented, and as a result, there is still some confusion about how it impacts businesses. is creates a real opportunity for accounting professionals to provide value added service as a trusted advisor. A Year in the Life of a PAYROLL Accountant is sponsored by ADP and SurePayroll The ADP logo and ADP are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. Copyright © 2016 ADP, LLC. Practice made perfect. You want to be more to your clients, and we want to offer you the flexibility you deserve. You can process payroll yourself using our proprietary cloud-based solution, refer clients directly to give your clients access to leading payroll and HR solutions, or even cash out of your existing payroll business to focus on what matters most to your firm. See how ADP ® can provide a more human resource to your firm and your clients: adp.com/cpaprograms.

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