Read This if You Have a Household Employee Part 1

Read This if You Have a Household Employee

Part 1

It is becoming more common to have a household employee to help with child care or senior caregivers.  If you hire someone on your own then understanding employment tax rules will help you avoid tax pitfalls if you are a household employer.  If you pay an agency for finding and supplying the individual that provides this service, then this does not apply.

If you hire someone and control what hours are worked and where and how the work is performed, then you have a household employee.  There are Labor Law and payroll tax responsibilities associated with having a household employee and we will address the Labor law aspect in this blog.

You must make sure that your employee is legally allowed to work in the United States.  You must have a completed form I-9 with acceptable documents to establish identity and employment eligibility which are listed on the I-9.  Keep this form for your records.

As a New York employer, you need to provide your employee with a NY Wage Notice, detailed paystubs, and file for NYS unemployment insurance.  If your employee works 40+ hours per week for you, then you must provide workers compensation and disability insurance.

Honorine M. Campisi, CPA

NYS Sales Tax: Computer Software

Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?” 

In this blog we are highlighting another industry with a few of the broad guidelines to follow! Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog focuses on Computer Software.

Prewritten computer software includes any computer software that is not designed and developed to the specifications of a particular purchaser.

The sale of prewritten computer software is taxable, whether it is sold as a part of a package or separately, regardless of how the software is conveyed to the purchaser.  Therefore, prewritten computer software sold on a disk, by electronic transmission, or by remote access will be taxable.

However, services related to computer software are exempt from sales tax. Some of these services are:

•       Training
•          Consulting
•          Troubleshooting
•          Programming

The sale of an upgrade of prewritten software is subject to sales tax. Also, the sale of a license to remotely access software is subject to state and local sales tax.

This is just a brief overview of the sales tax laws regarding computer software. Feel free to give our office a call for more information.

By Renee Greenspan

Tax Debt - Can I Really Pay Pennies on the Dollar?!

Have you have run into tax troubles and owe the IRS big money?  The reasons so many taxpayers incur a big tax bill vary from simply avoiding filing tax returns, to being self-employed and underestimating the amount of income and self-employment tax you will owe at year end.  It can start one year and then just keep piling up to the point where you have trouble catching up.

There are commercials out there that hawk “Settle your IRS debt for pennies on the dollar!”  This sounds great – but it is not as attainable as it sounds.  These ads are referring to Offers in Compromise, agreements with the IRS for taxpayers that have a large balance due and cannot afford to pay it back in full. 

The IRS does not write off debts unless they are pretty certain they will not be able to collect the full debt within a given time period, or if to do so would cause an undue hardship on the taxpayer.  It is an option for people who truly cannot and will not be able to pay off their debt in the near future.  If the IRS accepts you into this program, you will agree to pay a smaller amount of tax to settle the debt.  This sum is usually paid in one lump sum, but may also be spread over a few payments.  The process from application to end can take several months and sometimes up to a year.

More commonly used is an agreement to pay your tax debt over time.  The IRS offers installment payment plans depending on the amount you owe.  This option allows you to pay your overdue tax bill monthly until it is paid off.

Both of these options require that you stay compliant, meaning that all tax filings are filed and paid on time in the future.  

Honorine M. Campisi, CPA