Arkansas Minimum Wage Increased January 1. Are you Compliant?

Effective January 1, 2015 the Arkansas state minimum wage increased from $6.25 to $7.50 per hour. On January 1, 2016 it will increase to $8.00 per hour and on January 1, 2017 it will increase to $8.50 per hour.

At the polls back on November 4, nearly two thirds of the Arkansas voters who turned out, voted in favor of raising the state minimum wage. This will mean a series of increases over the next several years.

Prior to this measure, Arkansas was one of many states with a minimum wage lower than the federal rate, which has been at $7.25 since July of 2009. An increase to the federal minimum wage would require a bill being passed by Congress and signed by the President. In instances where state and federal minimum wages both apply but are in conflict, the higher wage shall prevail.

It is important to understand the minimum wage and its requirements, whether as an employer or an employee. For questions about minimum wage and how it impacts you contact Potts & Company.

IRS ANNOUNCES TAX SEASON 2015 WILL BEGIN JANUARY 20!!!

IRS Commissioner John Koskinen announced today that the IRS will begin accepting income tax returns on January 20th, 2015. Many people expected a later start because of the last minute enactment of the Tax Increase Prevention Act of 2014 which President Obama signed on December 19, 2014. In the past these last minute tax bills have caused delays in the start of tax return processing by the IRS because the IRS’ software required updates.

The Tax Increase Prevention Act of 2014 was enacted to extend 51 federal income tax provisions that had expired on December 31, 2013. The tax provisions extended included the $500,000 limit on the election to expense certain tangible assets in the year the asset was purchased, the 50% bonus depreciation, and certain employment tax credits.

Let’s hope the tax software vendors are ready to rock and roll on January 20th too.

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The New, Not-So-Small, Small Business

The term ‘small business’ is used with increasing frequency. But many don’t know what all goes into that name. To some it is a badge of honor to be a Small Business Owner. Others try to downplay the small aspect of their business.

Even when both competitors are small, the competition may not be equal.

Even when both competitors are small, the competition may not be equal.

But the actual and appropriate use of the term has specific parameters, and July 14, 2014 those parameters changed. Those changes and their impact were addressed in the Nerdwallet article News: SBA Changes the Definition of Small Business, July 15, 2014.

The change was deemed necessary to adjust for inflation but by changing the monetary measures used to define small business, the government recast about 8,500 businesses from large to small, according to estimates.

The new classification may prove beneficial to some of the formerly large businesses, now declared small. They now qualify for contracts with the federal government, as well as special lower rate loans and grants specifically crafted for small businesses by the Small Business Administration.

The announcement of a widening pool is not good news to the existing small businesses. They will now compete with large, though no longer technically large, firms for the same contracts and funding opportunities. It brings to mind David and Goliath as the home-growns will now square off with even larger firms than before, many are multi-million dollar businesses. Many have questioned the Small Business Administration’s motives.

Defining the new parameters of ‘small business’ is not a clear-cut, one-size-fits-all cap. It varies by industry in both the means of measure and the upward limit. Some industries are measured by total assets or revenues and others are by number of employees. This table from the Small Business Administration provides a breakout of those industries.

If you are a small business owner be sure to read up and determine how this change will impact you. If you are the owner of a smaller large business, it is possible these adjustments will change your classification. And please take note that if you contract with the government, you will need to be sure your SAM account, profile and certifications are up to date.

 

Erin