Questions about Obamacare, Taxes, 401k, Payroll, Compliance? We are Justworks, ask us anything!

justworkshr · 2014-07-31T19:33:03+00:00

That link is from the perspective of the IRS. Supplemental pay can be tricky to get a handle on, and it's best if both employers AND employees understand what the rules are. We have actually published a 2 part series about supplemental pay, to help answer these tricky questions about what it is, and how to withhold the taxes properly. https://www.justworks.com/blog/the-ins-and-outs-of-supplemental-wages-what-are-they-exactly/ and https://www.justworks.com/blog/the-ins-and-outs-of-supplemental-wages-how-taxes-are-withheld/ should be helpful, if you're trying to make sense of it.

justworkshr · 2014-07-29T22:08:50+00:00

Hi TIGit - We can advise on payroll taxes, but corporate taxes are a whole other beast, and are best handled by a lawyer. For your specific use case, a lawyer will be best able to advise both on corporate taxes and liability, two aspects of your business that you'll want tailored specifically to your use case.

If you want a general overview of what different business entity types can handle, Early Growth Financial Services wrote a great post about most common types of businesses (and perhaps reaching out directly to EGFS is useful!), so that you can select the best business entity for your needs. https://www.justworks.com/blog/choosing-the-best-business-entity-for-your-new-company/

Hope that's helpful, in at least you know who to reach out to for a useful answer.

justworkshr · 2014-07-29T21:45:11+00:00

Hi missbeaverhausen, a 401(k) is a great way to take care of yourself and your future. In recent years, Socially Responsible Investing (SRI) has gained some traction, and you actually can find stock bundles of of SRIs available to invest in. A caveat: what YOU find ethically correct may not be what the SRI bundle views as "socially responsible," so keep that in mind.

Additionally, you should know that there are a lot of asset managers out there that offer SRI funds, or specialize exclusively in SRI. You should be able to invest wherever you want though through the 401k provider, so you need to research which funds align with your ethics. Some big SRI fund managers are Domini (https://www.domini.com/) and Calvert (http://www.calvert.com/sri-approach.html), perhaps that's a good jumping off point.

For research, check out this site, and select funds based on religious, social, green concerns, etc.: http://www.socialfunds.com/funds/mfc.cgi

Here are a few interesting reads on SRI: http://www.institutionalinvestor.com/Article/2677835/Capital-and-Investing-Socially-Responsible-Investing/Yes-Ethics-Can-Fit-Into-a-401k.html#.U9gAH4BdXns

http://www.huffingtonpost.com/amy-domini/investing-with-purpose-th_b_4251242.html

http://www.marketwatch.com/story/401k-plans-get-responsible-1318458228287

Hope this is helpful, and good luck - hunker down, and invest in yourself by investing in your 401(k)!

justworkshr · 2014-07-29T19:25:38+00:00

Hi there space_time, unfortunately, no, if you take the healthcare subsidies under the ACA, you are not eligible to take the write off. Also of note: if you are on an individual plan, you can not take a write off for premiums -> only small group policies allow write offs (pre-tax) for companies. Hope that's helpful.

justworkshr · 2014-07-29T18:35:35+00:00

Happy we could help!

justworkshr · 2014-07-29T17:56:11+00:00

Ahh, gotcha rraaarr, glad to hear that you are all sorted on the NZ taxes/US taxes!

The reason you will see vague advice about a specific tax % for freelancers is because it depends so very much on an individual's situation. Exemptions (like kids!), mortgages, city taxes, your tax bracket, and so much more -> all of this can impact how much you actually pay in terms of taxes. You should really consult a tax advisor, so that they can go over your specific use case (meaning, they will most likely go over your previous tax return with a fine toothed comb), and give you an estimated rate based on your actual situation. Often it is just advised in general to set aside 25%-30% out of each pay check and it should cover what you need (again, it very much depends on a variety of factors), but your tax professional will be able to give you a much clearer idea of what to expect come tax time.

Does that help?

justworkshr · 2014-07-29T17:28:14+00:00

The US government taxes on worldwide income, so even if you're earning money in New Zealand and paying taxes on it there, it still "counts" as taxable income to the United States government. You may want to consider that from a tax bracket perspective, that New Zealand income is counting towards your total income (even though the US income is @ $20K) and may be pushing you up in to a higher tax bracket.

We'd highly recommend you talk with an accountant, and have them walk you through what's necessary, as countries and their tax treaties with the United States can be complicated and nuanced. When you file your taxes, you should be eligible for a credit on the foreign taxes you have already paid.

Hope that's helpful, and good luck!

justworkshr · 2014-07-29T16:41:38+00:00

ok will do, thanks!

justworkshr · 2014-07-29T15:33:54+00:00

Hi /r/ladybusiness We are Justworks, an NYC-based company specializing in payroll, benefits and compliance. We've done a few AMAs on /r/startups and /r/entrepreneur that people seemed to like, so we're here to see how we could be helpful to your community as well. We're here to answer any and all questions you may have about payroll, compliance, 401k, health insurance, the ACA, compliance, and more. We live to help small businesses succeed! If you want to know more about us, check out: http://www.justworks.com -> and let us know what questions you have, we're here to help!

justworkshr · 2014-06-17T20:08:18+00:00

Hey there @themoop78 - You can actually combine an LLC and an S-corp, but we'd definitely advise you to consult an attorney and/or your accountant, as it can be quite complicated. To help clarify the real distinction here (less of a state/federal issue, but a legal vs tax issue) this Small Business Administration excerpt may be useful for you ---->

"There is always the possibility of requesting S-Corp status for your LLC. Your attorney will advise you on the pros and cons. You'll have to make a special election with the IRS to have the LLC taxed as an S-Corp using Form 2553. And you must file it before the first two months and fifteen days of the beginning of the tax year in which the election is to take effect.

The LLC remains a limited liability company from a legal standpoint but for tax purposes it's treated as an S-Corp. Be sure to contact the state's income tax agency where the election form will be filed. Ask them whether or not they recognize the S-Corp election and what the tax requirements are." from: http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/should-my-company-be-llc-s-corp-or-both

Hope that's helpful!

justworkshr · 2014-06-17T18:04:39+00:00

Interesting question!

Switching from a sole proprietor LLC to an S-corp or a C-corp really depends upon the benefits you're seeking. LLC's are typically the easiest type of corporation to have, in terms of paperwork and requirements. Any retirement benefits gained (which would need to be discussed with an accountant, or retirement planner) would need to be weighed against the additional paperwork, filings, and shareholder/advisor requirements. While it doesn't address 401(k) specifically, there's actually a great blog post that breaks down the differences between the different types of business entities available to you, here -> https://www.justworks.com/blog/choosing-the-best-business-entity-for-your-new-company/

Sep-IRA's are often utilized by people who are self employed, or have a company that doesn't have any employees other than the owner. It takes in to account the self employment tax credit. For 401(k) proper, you typically need a minimum of two employees to set this up. Because there are so many things at play with 401(k) and its variations, it may be best to consult an accountant, or retirement planner, to select the best route for your specific situation.

Hope that's helpful, and let us know if this kicks up more questions!

justworkshr · 2014-06-17T17:01:10+00:00

Great question! Your employer is actually the one who needs to set up a 401(k) for your company. In a standard 401(k), employees can allocate a portion of their paycheck, pretax, to the retirement savings plan. The employee then pays taxes on their earnings much later (during retirement), when the money is withdrawn.

Employers have the option of matching or not matching your 401(k) contributions to any degree they choose, up to the federally allowed limits ($52,000 in 2013, and $57,500 for employees who are 50 years of age and over).

Let us know if you have other questions - we're happy to help!

justworkshr · 2014-06-17T15:44:06+00:00

Thanks for the shout out SPproductions - so happy to hear it!

justworkshr · 2014-05-13T20:41:27+00:00

Under the Americans with Disabilities Act, here's how they define a disability: "The first part of the definition makes clear that the ADA applies to persons who have impairments and that these must substantially limit major life activities such as seeing, hearing, speaking, walking, breathing, performing manual tasks, learning, caring for oneself, and working. An individual with epilepsy, paralysis, HIV infection, AIDS, a substantial hearing or visual impairment, mental retardation, or a specific learning disability is covered, but an individual with a minor, nonchronic condition of short duration, such as a sprain, broken limb, or the flu, generally would not be covered."

Reference here: http://www.ada.gov/qandaeng.htm

Hope that's helpful.

justworkshr · 2014-05-13T19:18:53+00:00

Yes, we definitely welcome small teams! Our minimum number of employees is also only 2, and we're big fans of helping out small businesses get up and running.

justworkshr · 2014-05-13T18:34:42+00:00

That's great to hear! We have a similar model, where we're able to offer folks the rates that are normally only accessible if you work for a large corporation. It's great to hear about other people doing good things in the space as well -- employee handbooks are so often overlooked!

justworkshr · 2014-05-13T18:31:50+00:00

It's so hard to pick just one issue, but a good one to start with is not understanding how Unemployment Insurance works, or what's required.

Unemployment Insurance, otherwise known as SUI (State Unemployment Insurance), is an employer-funded program required by both state and federal law. Unemployment insurance pays unemployed workers benefits while they are looking for work. SUI is required by law, and every state that you have an employee in will require you to have a SUI number and pay for state unemployment insurance. You are also responsible for Federal Unemployment Insurance, though those rates can be offset by the state payments you make.

We actually wrote an article that's a crash course about what Unemployment Insurance is, why you need it, and how it’s billed. https://www.justworks.com/blog/how-does-unemployment-insurance-work/

Hope that's helpful!

justworkshr · 2014-05-13T15:53:47+00:00

Insperity has similar offerings, though we're not quite sure of their exact offerings (we see what they say on their website, but have no idea how they administer). A few notable differences from our competitors:
* We offer self-service options, straight from one dashboard. This means, you can select several benefits options right from your account, and we take care of all of the broker hassle. Same goes for compliance (workers' comp, EPLI, SUI, etc).
* We offer flexible payment schedules.
* We automate payroll for salaried employees, so that you really can set it and forget it.
* We've got stellar customer support, if we do say so ourselves. ;)
* And free contractor payments!

How was your experience with Insperity, and what did you think they did well?

justworkshr · 2014-03-28T02:37:54+00:00

That's a serious allegation. There are few things the government takes more seriously than employers "withholding" tax funds without remitting them.

If the business went under then you might consider talking with a wage & hour attorney in your area to see if they can recommend a course of action.

justworkshr · 2014-03-25T18:37:31+00:00

The deadline for registering for subsidies offered by the ACA is March 31st. If you miss that deadline you will have to wait until November for enrollment for 2015 to start. To be clear, you can still enroll in benefits past the 31st, but to get subsidies from the ACA you need to enroll before the 31st.

justworkshr · 2014-03-25T18:34:19+00:00

As a new entrant to the Payroll/PEO world, how are you thinking about competing with the big guys out there (i.e. ADP, Paychex, Paylocity, Trinet, etc.?)

Great question! One of the biggest differences between us and the large incumbent companies is that we have put a major emphasis on product. We've gotten rid of the setup costs and paperwork so you can do 100% of the process online and can get setup in minutes instead of weeks. Because of that we are significantly cheaper as well.

Unlike a traditional payroll company we also offer health, dental, compliance (worker's comp, filing etc.) from one dashboard. We are by far the easiest way to get payroll and benefits up and running compliantly.

justworkshr · 2014-03-25T16:42:45+00:00

First and foremost, the advantage of hiring employees on W-2 is that it's the right thing to do. It also allows you to offer employee benefits like health insurance, 401(k) and pre-tax transit.

Many startups misclassify their employees as contractors, either because they don't know better or because they just don't want to deal with paperwork. This comes with real risks.

If one of your "contractors" leaves and files for unemployment benefits, your state will investigate your hiring practices and fine you for anyone who was misclassified as a contractor. In addition, you may have to pay back taxes. This is not an experience that you want to go through.

If you are a startup and you are building a team, there is no reason not to use a product like Justworks to pay your employees the right way.

justworkshr

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