One of the most daunting tasks for self-employed or small business owners is tracking mileage. It is painfully tedious, but the good news is there are some apps for your iPhone or iPad to help ease some of this pain. Try one out and let us know which one you like best.

Mileage Tracking Apps

Today is National Mom and Pop Business Owners Day. Rick Segal of Poinciana, Florida, is credited with the creation of the holiday that is set to celebrate small business owners. Segal originally created the holiday to honor the small business that his parents started in Everett, MA on March 29, 1939. Originally a hat shop call “Ruth’s”, it later grew into a woman’s specialty clothing store in Medford, MA that had over $2 million in revenue when it closed in 1997.

Small business owners are the backbone of America. According to the US Small Business Administration, small businesses represent 99.7% of all employer firms and employ over half of all private sector employees. Small businesses have generated 64% of net new jobs over the past 15 years. In addition, small businesses produce 13 times more patents per employee than large firms, and their patents are twice as likely to be among the one percent most cited patents.

The enormous risk that small business owners take and the countless hours that small business owners pour into their business often result in little to no reward, yet they push on any way.

One way to celebrate the Mom & Pop Business Owner is to commit yourself to shop in their stores and eat in their restaurants on this special day.

How else do you plan to celebrate Mom & Pop Business Owner day? Let us know!

If you pay for household help, you may be liable for the “nanny tax,” even if your employee is not a nanny, per se. The nanny tax refers to three federal employment taxes that household employers may have to pay for their domestic workers–Social Security, Medicare, and unemployment taxes. If you hire someone to work in or around your home, you’ll need to know what federal income tax issues (if any) apply, and what forms may be required. Although you may have to withhold and pay federal employment taxes in certain cases, you won’t have to withhold federal income tax from your household employees’ wages (unless you choose to do so).

In addition to federal employment taxes, you may be required to pay state unemployment and disability taxes and/or carry workers’ compensation insurance. Because state tax requirements may differ from federal, you should check with the appropriate agency in your state for further information.

If you have a household employee, you may need to do the following:

• Withhold and/or pay Social Security and Medicare taxes
• Pay federal unemployment tax
• Pay state unemployment tax and comply with other state requirements
• File appropriate federal and state tax reporting forms
• Comply with federal labor laws

You aren’t required to withhold federal income tax from your household employee’s wages. If your employee asks you to withhold it, however, you may choose to do so.

For more information about household employers, see IRS Publication 926 (Household Employer’s Tax Guide).We can help guide you the through the maze of employment taxes and registrations and process your payroll through RedWolf Payroll.

One of the steps we recommend to clients who use independent contractors and who therefore face a heightened risk of a costly IRS payroll tax or benefits audit, is a quick review of some of the key things the IRS tells its agents to look at in determining whether a worker is really an employee.

The primary inquiries fall into three categories. Who has financial control of the job? Who can exercise control over how the worker performs the specific task? And how do the parties themselves view the relationship? When reviewing the checklist, keep in mind that the IRS will make its decision based on the whole picture, not just a single factor.

Workers are more likely to be classified as independent contractors if they:

• Make a significant investment in business property (a home computer is not significant);
• Pay their own business expenses;
• Receive a flat fee that is not based on an hourly or similar rate;
• Are not prohibited from doing work for other companies;
• Can pay subcontractors to get the job done;
• Are not performing services as an integral part of your regular business;
• Have a contract with an enforceable liquidated damages provision;
• Can make a profit;
• Can suffer a loss.

Workers are more likely to be classified as employees if they:

• Are given specific instructions and on-going training in how to get the work done;
• Cannot work for others;
• Have expenses paid by your company;
• Are paid with a salary or hourly wage;
• Do not have a significant investment in their trade or business;
• Are an integral part of your regular business;
• Receive direct reimbursement for all, or almost all, expenses;

Less important is:

• Whether or not the work is performed on the business’s premises;
• Whether the worker has flexibility in setting hours;
• Whether the relationship is temporary or short-term;
• Whether the work is full- or part-time;
• Whether the worker performs services for one or more businesses.

If you suspect from this list that there might be a problem, we would be happy to come in and do an audit of your hiring practices and suggest effective solutions if necessary.