Month: November 2018

I Need to Hire Someone for My Business; What Do I Need to Know?

I Need to Hire Someone for My Business; What Do I Need to Know?

The goal of most businesses is to grow – at least somewhat.  However, in order to grow or to be able to step away from the business for a personal life, vacation, or other ventures, you’ll need help with day-to-day operations.  If you’ve never hired someone before – or it’s been a long time – don’t worry – here’s the information you need to get started.

Comply with Federal & State Regulations

Hiring a new employee means complying with federal and state regulations.  Although the following list may seem long, it won’t be a daunting process when you have our assistance.

Here’s an overview of what’s generally required.  You are invited to check out the U.S. Small Business Association (SBA) or call our office for assistance. We commonly walk businesses like yours through the hiring process.

  • Obtain an Employer Identification Number (EIN). Often referred to as an Employer Tax ID or Form SS-4, this nine digit number is issued by the S. Internal Revenue Service (IRS) and used when paying taxes or reporting information to state agencies.
  • Keep Records. The IRS requires employers to keep the following employment tax records for at least four years:  1) federal income tax withholding, 2) federal wage and tax statements, and 3) state wage and tax statements.  Additional records may be required.

See the IRS Employer Tax Guide and the IRS State Government Website links for specifics.

  • Verify Employee Eligibility. All employers must verify an employee’s eligibility to work in the United States.  This is done via the I-9 form that can be obtained and filed online or completed using the paper form.  Verification must be completed within three days of employment and kept on file for three years.
  • Register with Your State’s New Hire Reporting Program. All employers must report new and re-hire employees to their state’s New Report Hiring System.  The U.S. Department of Health & Human Services (DHHS) publishes a list of state new hire reporting websites.
  • Obtain Workers’ Compensation Insurance. All employers must carry workers’ compensation insurance when they have employees.  The insurance can be obtained through a commercial carrier, through their state’s workers’ compensation program, or on a self-insured basis (where the employer assumes the financial risk for providing benefits to employees).
  • Post Required Notices.  Employers must display posters in their workplace that inform employees of their employer’s responsibilities and employees’ rights.  For example, you must use posters identifying federal and state minimum wage (Fair Labor Standards Act, “FLSA”), equal employment opportunity (“EEO”), and safety (Occupational Safety & Health Administration, “OSHA”).
  • File Your Taxes. Employers who pay wages are generally subject to taxes and income tax withholding, Social Security, and Medicare taxes.  The specific form(s) needed depends upon the facts and circumstances of your situation.

Be sure to discuss your situation with our experienced business law attorneys to make sure you’re in federal and state compliance.  Failing to do so could result in unnecessary fines, fees, and litigation.

Retirement Planning for Business Owners

Retirement Planning for Business Owners

For many employees, saving for retirement is usually a matter of simply participating in their employer’s 401(k) plan and perhaps opening an IRA for some extra savings.

But, when you’re the owner of a business, planning for retirement requires pro-activity and strategy. It’s not just the dizzying array of choices for retirement accounts, there’s also planning for the business itself. Who will run the business after your retirement? Additionally, your estate plan must integrate into your retirement and business transition strategy.

Owners of businesses (like employees and everyone else) want to make sure they will have enough money in retirement. Business owners recognize the value of their businesses, so they are often tempted to reinvest everything into the enterprise, thinking that will be their “retirement plan.” However, this might be a mistake.

Retirement Accounts for Business Owners

Rather than placing all your eggs in one basket, it makes sense to have some “backup” strategies in place. There are many retirement account options open to business owners. Although the number of options can make things confusing, a tax and financial professional can often quickly make a recommendation for you.

For example, you may consider opening a 401(k), SEP-IRA, SIMPLE, or pension plan. This can reduce your income taxes now, while simultaneously placing some of your wealth outside your business. From a financial perspective, these account are tax-deferred, so the investment growth avoids taxation until you retire, which greatly boosts returns. The “best” plan really depends on how much income your business earns, how stable your earnings are, how many employees you have, and how generous you want to be with those employees. You must consider how generous you’ll be with employees because the law requires most tax-deferred plans to be “fair” to all employees. For example, you can’t open a pension or 401(k) for yourself only and exclude all of your full-time employees. When making this decision, consider that many employees value being able to save for their retirement and your generosity may be repaid with harder work and loyalty from the employees.

Depending on how many employees you have, you may even consider “self-directed” investment options, which can allow you to invest some or all of your retirement funds into “alternative” investments, such as precious metals, private lending arrangements, real estate, other closely held businesses, etc. These self-directed accounts are not for everyone, but for the right person, they open up a wide world of investment opportunities. The tax rules surrounding self-directed tax-deferred accounts are very complex and penalties can be incredibly high. So, if you choose to do self-directed investments, always work with a qualified tax advisor.

Outside of your business, you can likely contribute to an IRA or a Roth IRA. This can allow you to add more money to your retirement basket, especially if you’ve maximized your 401(k), SEP, or SIMPLE plan. Like the other tax-deferred accounts, self-directed IRAs are also an option, opening up a broad world of investment options.

As a business owner, you likely have a great deal of control over your health insurance decisions. If you’re relatively young and healthy or otherwise an infrequent user of health care services, consider using a high deductible health plan (HDHP) and a health savings account (HSA) to add additional money to your savings. These plans let you set aside money in the HSA which can be invested in a manner similar to IRAs. At any time after you setup the account, you can withdraw your contributions and earnings, tax-free, to pay for qualified medical expenses. And, after you turn 65, the money can be used for whatever purpose you want, although income tax will need to be paid on the distributions.

Selling or Transferring the Business

Many business owners dream of a financially lucrative “exit” when a business is sold, taken public, or otherwise transferred at a significant profit for the owner. This does not happen by accident – a business owner must first create and sustain a profitable enterprise that can be sold. Then, legal and tax strategies must be coordinated to minimize the burdensome hit of taxes and avoid the common legal risks that can happen when businesses are sold. When a business is sold, the net proceeds can form a significant component of the owner’s retirement. When supplemented by one or more of the retirement accounts discussed above, this can be a great outcome for a business owner.

On the other hand, other businesses are “family” businesses where children or grandchildren will one day become owners. Like their counterparts who will sell their businesses, these business owners must also focus on creating and sustaining a profitable enterprise, but the source of retirement money is a little less clear. In these cases, clearly thinking through the transition plan to the next generation is essential. Although the business can be given to the next generation through a trust or outright, there are also transition options to allow for children, grandchildren, or even employees to gradually buy-out the owner, if the owner needs or wants to obtain a portion of the retirement nest egg from the business.

The Importance of Estate Planning

Regardless of which retirement accounts (401(k), SEP, SIMPLE, IRAs, HSAs) you select, it is wise to integrate them into your estate planning. You’ve probably already considered who you want to take over your business after you retire (perhaps a son or daughter or a sale to a third party). For your retirement accounts, an IRA trust is a special trust designed to maximize the financial benefit, minimize the income tax burden, and provide robust asset protection for your family. These trusts integrate with the rest of your comprehensive estate plan to fully protect your family, provide privacy, all while minimizing taxes and costs.

Leverage the Team Approach

Let us work with you, your business advisors or consultants, your tax advisor, and your financial advisor to develop a comprehensive retirement, business transition, and estate planning strategy. When we work collaboratively, we can focus on setting aside assets for retirement, saving as much tax possible, while freeing you to do what you do best – build your business!

Give us a call today so we can help you craft a retirement, business transition, and estate planning strategy.

4 Social Media Mistakes that May Put Your Company’s IP at Risk

4 Social Media Mistakes that May Put Your Company’s IP at Risk

Being active on social media is hardly a choice anymore for small to medium sized businesses—it’s a given.  After all, your customers are there.  Connecting with your target audience in the social web can boost your brand and level the playing field between you and big competitors with larger advertising budgets.  But before you rush out to tweet a deal or share pics of your new logo on Instagram, take a minute to learn about common mistakes smaller businesses make with their intellectual property (or IP)  in social media—and how you can avoid them.

Mistake # 1:  Not having a plan

It’s important to remember that when you tell your customers something on social media, you’re telling your competitors too.  Think through what you want to disclose and whether you have taken the right protective steps to register or claim your branded IP (more on that below).  Make sure you have a social media policy in place both for site visitors and the employees who are able to post to your accounts.  Your social media policies must take IP into account and clearly state the ways in which your content, images and logos may and may not be used.

Mistake # 2:  Under protecting your IP

Have you considered filing trademark or trade name applications for the proprietary names or logos you’ll be sharing in social media that are critical to your brand?  While it’s certainly not essential to register every word you write or every image you use, socializing a compelling motto or a trendy logo without protecting it first can be a risk.  Sure, it may go viral.  It also may go on your competitor’s next product– and there will be little you can do about it.  Registration heightens your chances of prevailing if you need to ask a third party to cease and desist from using your IP or go a step further and file a Digital Media Copyright Act (DCMA) infringement notice to have the offending website blocked from search engines.

Mistake # 3:  Not displaying ownership marks, or using the wrong ones

Most of us are so accustomed to seeing those little superscript marks next to brands, logos and content, that we hardly notice them.  But these tiny icons can have a big impact on your ability to protect IP from infringement and abuse.  For the protections to apply, it’s important to use the right kind of mark for the given situation.  For trade names and logos, use the symbol ™ if you claim ownership but either have not filed an application or have filed and are waiting on approval.  Only use the ® symbol if you have an approved and unexpired trademark or trade name registration on file with the U.S. patent and trademark office.  For your original written content, you can use a © symbol whether or not you have filed a copyright application.  For audio files, use a ℗ symbol.

Mistake # 4:  Not monitoring third party use of your IP

Once you have planned your strategy for protecting your IP in the social media world and taken the right steps to register for protections and display ownership marks, you’re still not done.  Continuous monitoring of the ways in which your IP shows up in social media is critical too.  Setting google alerts for your unique branded phrases can help you track where content ends up and whether it’s been properly attributed to you.  Tools like Hootsuite and Topsy can help you track mentions across social platforms.  Copyscape.com can tell you when your fantastic blog post or article has been the victim of a cut, paste and repost.

The opportunities social media offers for you to expand your reach, spread your message and elevate your brand are huge.  With a little planning, protection and monitoring in place, you’ll be positioned to make the most of them.

Estate Planning: 3 Reasons We Run the Other Way

Estate Planning: 3 Reasons We Run the Other Way

We understand that it feels hard to get around to estate planning; it sounds about as fun as getting a root canal. However, we also understand that we all want to make sure that our loved ones are protected and receive our hard-earned assets – regardless of whether we have $10 million or $10,000.

Don’t let these common roadblocks stop you from protecting yourself and your family:

  1. Who Wants to Talk About Death? Discussions of death, dying, and illness – money and family – will and trusts – make many folks uncomfortable. Of course, that’s normal.  But, don’t let a few minutes of feeling uncomfortable stop you from taking care of yourself and your loved ones.
  2. This Isn’t a Good Time. Everyone is busy. We understand that, but there’s never going to be a better time. Call our office, get on the calendar, and get it done.
  3. I Don’t Get It. Estate planning is documented in legal papers; finances are discussed; the law is analyzed. It’s common feel uncomfortable in a world you’re not familiar with.  If that’s what you are thinking, you are not We will translate complex legal concepts into everyday layman’s terms for you, just like we do for everyone else.

The truth is that estate planning isn’t really that bad. In fact, with our help, estate planning is easy. We’ll chat with you about your goals and concerns, analyze your family and financial situation, and work with you to come up with a solid plan. You provide the information, which we always keep confidential, and we’ll take care of everything else.