We are quickly approaching our busiest time of year and prefer to be proactive rather than reactive. Now is a good time to make certain that your operations are running smooth and efficiently prior to the kickoff of a new year.
As we wrap up this strange year we are looking forward to starting the new year afresh. From tax preparations to your HR infrastructure, we have some helpful tips to assist you in ensuring that these different aspects of your business are set up for success.
-The Big Pic Results Team
Classifying an employee as an Independent Contractor without a reasonable basis can result in having to pay employment taxes and Worker's Comp insurance penalties/interest for that worker IF you are audited.
You will need to collect a W9 from an Independent Contractor if you hire them for services over $600. We recommend collecting these at the start of engaging their services. We recommend collecting these at the start of engaging their services.
Contractors paid over $600 will need to be issued a Form 1099-NEC (for Non Employment Income, previously Form 1099-Misc through 2019) or Form 1099-Misc (for Rents and other Income Payments) by February 1, 2021. For more information on this, take a look at 1099 Prep Steps for Success and Rules Regarding Form 1099.
1099s are required to be filed by February 1, 2021. Now is a good time to collect missing W9s and confirm all vendor balances are correct. We recommend that you follow these 3 steps to be sure you have what you need to file your 1099s accurately and timely. If any W9s are missing make sure that you reach out to your vendors to collect. We are currently running through this with our Clients NOW. If someone in your community needs help send them our way!
For more information on the rules for filing Form 1099-NEC and Form 1099-MISC please read here.
Sexual Harassment Training - Prior to January 1st, 2021 California employers with 5+ employees will need to provide 2 hour Sexual Harassment training for supervisors and 1 hour Sexual Harassment training for non-supervisor employees. An easy to use and cost efficient option is Easy Llama.
2021 Labor Law Posters - Make sure that your Labor Law posters are up to date and visible to all of your employees. Labor Law posters include all OSHA Compliant State and Federal Laws, State Minimum Wage Updates, and all 2021 Updates. These can be purchased at Amazon or through your payroll provider.
Form I-9 Compliance - You should have a physical copy of Form I-9 for ALL of your employees stored in a secure place at your main business location. These forms must be verified and stored correctly to avoid hefty fines for EACH employee not in compliance.
Employee Recognition/Reviews - The end of the year tends to come with expectations of holidays, bonuses and/or profit sharing by many employees. It's best to recognize this expectation and address your plans with your team to avoid disappointment and disgruntled employees. We love to use Bonusly to reward our employees with accolades from the management team or shout outs from team members both accompanied by a cash bonus.
In case you missed it, listen in on this podcast interview Rent a CFO/COO with Kelly Bagla of Go Legal Yourself. Get insight from Jessica Hornbeck on the best practices for the financial and operational side of your business.
Also, in light of the current environment, we're updating our recommendation for capital reserves on hand to 3 months.
PPP Loan Forgiveness Application
Loan Forgiveness Applications are due no later than 10 months following the last day of your Covered Forgiveness Period (24 weeks following your loan disbursement date).
Lower Your Taxes Owed for 2020
Keep an eye out for our December Newsletter for Strategies to Lower Your Net Profit and Drive Down Your Taxes Owed.