The post 2015 Federal Percentage Method Income Tax Withholding Tables appeared first on HVH Accounting.
]]>Advance copies of the 2015 federal percentage method withholding tables have been released by the IRS. The tables in Notice 1036 are effective for wages paid in 2015.
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]]>The post Hiring Outlook – More Companies Have Accounting Job Vacancies appeared first on HVH Accounting.
]]>A large number of US companies have reported an increased number of open accounting, finance, and IT positions – especially in corporate accounting and IT administration – heading into the new year, according to a new hiring forecast from Chicago-based staffing firm Brilliant.
Brilliant, in conjunction with Richard Curtin, PhD, professor and director of surveys at the University of Michigan at Ann Arbor, received nearly 300 survey responses from human resources professionals and hiring managers for its Brilliant Q1 2015 Accounting, Finance, and IT Hiring Forecast, which was released on Dec. 23, 2014.
“Plans continue to heed a healthy work climate for accounting/finance and IT professionals. The economic downturn of 2007 – and unemployment highs – seem a distant memory,” Brilliant CEO James Wong said in the report.
According to the new forecast, 30 percent of companies reported vacant accounting and finance positions, up from 28 percent in the fourth quarter of 2014, while 37 percent have unfilled IT positions, up from 33 percent last quarter. Twenty-two percent of companies reported one to three accounting and finance openings, while 2 percent had four to six vacancies, 1 percent had seven to 10 unfilled positions, and 5 percent reported more than 10 accounting and finance vacancies.
Twenty percent of study participants noted their open positions were mainly in corporate accounting roles, such as financial analysts, staff accountants, and internal auditors. For unfilled IT positions, the top two available are for database administration (13 percent) and network administration (13 percent).
“While the majority of companies expected their hiring plans to remain unchanged in the coming year, most planned a constant (high) number of new hires,” Dr. Curtin said in a written statement. “Given companies in recent years needed to replenish their staffs from the downsizing that occurred during the Great Recession, the fact that hiring has remained unchanged at that same higher rate is good news.”
In the year ahead, net increases in the hiring of accounting, finance, and IT professionals can be expected, although at a much reduced pace from the last quarter, according to the report. Increased hiring was planned by 17 percent for accounting and finance professionals, down from 28 percent of companies that planned to increase their accounting and finance teams in the fourth quarter of 2014. However, just 5 percent planned reduced hiring of accounting and finance professionals.
The same cutbacks in new hires were reported for IT staff: 16 percent of companies planned to increase their hiring of IT professionals, down from 34 percent last quarter.
Brilliant noted that the data only indicate a decline in the hiring rate, as two-thirds of all companies kept their hiring plans unchanged. “Unchanged hiring plans does not necessarily mean there will be no additional hires, only that the number of additional hires is expected to remain unchanged,” the report stated. “The data does indicate that many human resources professionals and hiring managers correctly predicted their needs for new staff and hired accordingly.”
Fifteen percent of study participants said their companies were planning to increase the number of temporary or contract accounting and finance professionals in the coming year, while 18 percent planned to hire more temporary and contract employees for IT.
“This signifies that many companies have the confidence and budgets to invest in projects,” Wong said. “Overall, the data provides solid evidence that companies are expecting growth in the number of new hires during the year ahead.”
Surprisingly, the use of social media as a recruitment tool decreased slightly from the previous quarter, according to the report. Social media was used by 53 percent of respondents to recruit accounting and finance professionals, down from 60 percent. For IT positions, social media was used by 48 percent of respondents, down from 54 percent. LinkedIn dominated all other platforms, with 46 percent using the online business network to connect with accounting and finance professionals; 41 percent for IT
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]]>The post CFOs Face Liability for Business Taxes appeared first on HVH Accounting.
]]>It is hard enough to be a CFO of a company that’s struggling financially. It is worse when that role leaves finance chiefs themselves owing tax that the company should have paid. State and federal tax laws often provide that “responsible persons” are personally liable for unpaid business taxes, particularly “trust fund” taxes collected from third parties, such as wage withholding from employees and sales tax collected from customers. All too often this can lead to hundreds of thousands of dollars in liabilities for executives of a troubled or failed business. Finance chiefs need to put controls in place to ensure that taxes are properly paid over to the applicable state, especially in situations where the business may be unable to pay the missing tax down the road.
The government, after all, can be a jealous creditor. A company struggling to stay afloat may find it all too easy to consider delaying tax obligations, and all too often the delay becomes permanent. If it is a choice between paying a critical supplier to keep the business open or paying a taxing authority tax when due, the short-term choice of paying the supplier can seem obvious. The wheels of government move slowly, and by the time the taxing authority comes to collect, the company, management hopes, will have the wherewithal to pay–or may be completely wiped out. “Responsible person” liability laws address this dilemma by making the individuals responsible for paying the business’ taxes liable if they fail to ensure that it is done. The business tax liability becomes personal. Indeed, even if the tax liability of the business itself is extinguished in bankruptcy, the government can still – and often does – proceed against the responsible person(s).
What’s more, a company can have many responsible persons. The category of “responsible person” is surprisingly broad, potentially implicating everyone from the CEO to the return preparer. Implicating activities will often include the following (depending on the jurisdiction), any one of which may be enough to establish liability:
It is not necessarily the case that a revenue agency will seek recovery from the most responsible person first. Any responsible person is potentially liable, although as a practical matter the risk is highest for those individuals whose names are provided on tax registrations, returns or audit responses. CFOs need to ensure that taxes are properly paid not only for their own protection but also for protection of their subordinates and their superiors.
Delegators should, therefore, beware. Delegation does not necessarily protect an executive. Remember, a key indicator of responsible-person status is authority over a business and how it pays its taxes and other bills. While as a practical matter an executive can and often will delegate tax paying duties, that does not absolve the executive of responsibility. For example, a vice president of operations was found liable for over $250,000 of federal withholding tax because he delegated payroll and check-writing authority to outside accountants and did not request that tax payments be prioritized. In another example, a court in New York recently found a sole shareholder liable as a responsible person owing over $230,000 of unpaid sales tax, although her husband was the corporate officer actually managing the business and failing to pay the taxes. In order to minimize responsible-person risks, CFOs should require internal reporting and controls to hold subordinates accountable and ensure that taxes are properly paid.Finance chiefs should also avoid following instructions to not pay tax. “Just following orders,” the mirror image of the delegation defense, is equally problematic. While an executive might say that he did not have authority to “make the call” on not paying taxes, merely going along with the failure to pay can be enough for responsible-person liability. The duty to hand over trust fund taxes is serious and generally applies even if the individual is under duress. For example, in a recent case a manager of “Prisoners Legal News” was found liable for failure to pay employee withholding taxes despite claiming to have been forced to do so by the then-incarcerated business owner. While the threat of violence seemed implicit in the owner’s instructions, the court refused to let the manager off the hook given his clear responsibility for paying withholding taxes. If the “following instructions” defense did not work for the employee of a convicted criminal, consider how likely it is to apply in less coercive contexts.
Similarly, a “white knight” who cleans up after embezzlement should be careful. Situations involving fraud or embezzlement pose a particularly hazardous area for responsible persons, because failing to remedy the tax shortfall with available money can trigger liability. Say that embezzlement within a company is discovered, including conversion of employee wage withholding, and a CFO comes in to resolve the issues and wrap up the business’s affairs. The CFO determines that the company is insolvent and needs to be liquidated. The question is whether to pay the taxes or other creditors with the remaining available money. The tax dollars have already been misappropriated, and so it may seem that the CFO should have discretion. The government, however, expects repayment with any available funds, and so the CFO’s failure to prioritize payment of taxes can trigger personal liability even though it was not the CFO who took the tax money in the first place.
It may be an unfortunate fact that CFOs and other executives have been deputized as tax collectors by federal and state government. Failure to ensure that tax collection and remittance is properly carried out can leave an executive team with personal exposure for tax deficiencies — exposure that can easily exceed an executive’s total compensation from the company. CFOs need to protect themselves and and others by establishing procedures and policies to ensure that taxes are collected and paid as required by law.
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