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Shultz Huber & Associates "Huddle Up" 
Quick Hit News to Know 
October 19, 2011 -
Recent developments related to employment and business tax issues are impacting many of our clients.  We want you to be the first to know.
 
Following are high-profile releases related to Ohio Minimum Wage increase, IRS S-Corp Audits, and new 1099 Independent Contractor relief.

As always, you are our mission.  Please contact us for help with your mission.
Ohio Minimum Wage Increase
  
Ohio's minimum wage is scheduled to increase on January 1, 2012.
  • $7.70 per hour for non-tipped employees (currently at $7.40)
  • $3.85 per hour for tipped employees (currently at $3.70)
  • Applies to employers who gross more than $283,000 per year
Click here for a link to the Ohio Department of Commerce News Release.
IRS audits S Corporations

A while back we informed clients that the IRS was ramping up its staff to increase the audit frequency of S Corporations.  As part of our on-going business an IRS auditor verbally communicated to us that:
  • There is no such thing as a "random" audit anymore.  IRS computers flag certain items.
  • Officer wages versus distributions will always be reviewed.
  • Imputed interest on shareholder loans is scrutinized.
  • If the S Corporation return is audited, the associated individual 1040s will also likely be audited.

Talk about stomach knots!  Rest assured, our tax team is closely following all developments related to IRS activity.  We are proactively working to continue our technical excellence and further tighten our approach to compliance.

1099 Independent Contractor Update

 

The Internal Revenue Service has begun offering employers who have misclassified their employees as independent contractors a chance to come clean with a minimal amount of tax liability.
 
But such employers should make sure they have erred before they come forward because reclassification could cost them much more than those tax payments.
 
Click here for full article from CFO.com.  Or just contact us.

Fine Print:

Pursuant to Circular 230 promulgated by the Internal Revenue Service, if this communication or any attachment hereto, contains advice concerning any federal tax issue or submission, please be advised that it is not intended or written to be used, and that it cannot be used, for the purpose of avoiding federal tax penalties, unless otherwise expressly indicated.