Accounting & Tax News

G.R. Reid Associates, LLP


Certified Public Accountants

631.425.1800

www.GRRCPAS.com 

State & Local Tax Credits and Incentives

New York City Green Roof Tax Credit 
You may qualify for a real property tax abatement if you constructed a "green roof" covering at least 50% of a building’s rooftop space on a class one, two, or four building.

Connecticut Enterprise Zone Credit And Exemption
If you have a qualified business located in an Enterprise Zone, you may be entitled to a tax credit for 10 years or be exempt from sales and use tax.

New York Brownfield Redevelopment Credit 
A 10% to 20% credit may be available to you for the costs of certain site preparation, tangible property, and ground water remediation.

New Jersey Enterprise Zone Tax Credit And Exemption 
You may be entitled to a tax credit for hiring new employees or investing within an Enterprise Zone (EZ) and may be exempt from sales and use taxes for certain purchases of property and services used within the EZ.

Accounting & Tax News

G.R. Reid Associates, LLP


Certified Public Accountants

631.425.1800

www.GRRCPAS.com 


President Obama Signs JOBS Act Into Law
 
On April 5, 2012, President Obama signed the Jumpstart Our Business Startups (“JOBS”) Act into law. This legislation is a product of broad bipartisan efforts in response to a decreasing number of initial public offerings (“IPO’s”). The intent of the legislation is to encourage certain private companies to raise capital by means of going public and creating jobs. The JOBS Act amends specific sections of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002.

Companies that fall within specific conditions laid out by the JOBS Act are referred to as “emerging growth companies”. The term “emerging growth company” describes an issuer (an entity that develops, registers and sells securities for the purpose of financing its operations) that has annual gross revenues of less than $1 billion during its most recent fiscal year. Exemptions and provisions of the JOBS Act apply to emerging growth companies until they reach a threshold of $1 billion in revenues, the last day of the fiscal year following the fifth anniversary of the first sale of common equity securities pursuant to an effective registration statement, or the date on which the issuer has, during the previous three year period, issued more than $1 billion in non-convertible debt or is deemed to be a large accelerated filer (typically public float of $700 million or more). An issuer does not have the privilege to be an emerging growth company for purposes of the Act if its first sale of common equity securities pursuant to an effective registration statement under the Securities Act of 1933 occurred on or before December 8, 2011.

Emerging growth companies are exempt from certain disclosure requirements that are currently in place for public companies. An example of one of the most significant exceptions is the fact that an emerging growth company is required to present only two years of audited financial statements in order for its registration statement with respect to an initial public offering of its common equity securities to be effective. Furthermore, in any other registration statement to be filed with the Securities and Exchange Commission (“SEC”), an emerging growth company does not need to present selected financial data in accordance with Item 301 of Regulation S-K, for any period prior to the earliest audited period presented in connection with its initial public offering. Emerging growth companies also have an opportunity to confidentially submit a draft registration statement for SEC staff review and permissible communications during the securities offering of an emerging growth company have been expanded. Emerging growth companies may not be required to comply with any new or revised financial accounting standard until the date that a company that is not an issuer (private companies) is required to comply with such new or revised accounting standard, if the standard applies to companies that are not issuers. Such issuers also have an option to comply with executive compensation disclosure requirements similar to smaller reporting companies (registrants with a market value of outstanding voting and nonvoting common equity held by non-affiliates of less than $75 million).

Other important exceptions that emerging growth companies benefit from relate to audits of internal controls. Such companies are not required to have an audit of their internal controls performed under Section 404(b) of the Sarbanes-Oxley Act of 2002. There was no change to management's requirement to assess internal controls. Any potential future rules of the PCAOB requiring the mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor will be required to provide additional information about the audit and the financial statements of the issuer (auditor discussion and analysis) will not apply to an audit of an emerging growth company.

There are also several changes that the JOBS Act brings which also affects entities other than emerging growth companies. One of the changes is a provision that allows “crowdfunding” (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure) whereby companies can raise equity from a large pool of small investors who may or may not be considered “accredited”. Another noteworthy provision that impacts companies is the threshold for mandatory Exchange Act registration for non-listed companies. Based on the JOBS Act, this threshold has been increased from 500 shareholders of record to 2,000 shareholders of record, provided there are less than 500 "non-accredited" investors. The Act also raises the thresholds for a non-listed bank or bank holding company to terminate its Exchange Act registration from 300 shareholders of record to 1,200 shareholders of record. The JOBS Act ensures that the prohibition against general solicitation or general advertising does not apply to private offers and sales of securities made pursuant to Rule 506 of Regulation D and Rule 144, provided that all purchasers of the securities are accredited investors. The JOBS Act increases the aggregate offering exemption amount of all securities offered and sold within the prior 12-month period in public offerings from $5 million to $50 million.

Opponents believe that the JOBS Act weakens investor protections, which will lead to more financial issues and fraud, and the reduced transparency will make it more difficult for investors and regulators to detect those issues. Additionally, they believe that the $1 billion revenue threshold for emerging growth companies is too high, as it includes the vast majority of current public companies. On the other hand, proponents of the Act believe that the relaxed regulations will help entrepreneurs more efficiently raise the public and private capital needed to put more Americans back to work. It will be interesting to see the effect of the JOBS Act on the capital raising landscape for entrepreneurial growth companies.

Accounting & Tax News

G.R. Reid Associates, LLP
Certified Public Accountants 


631.425.1800   www.GRReid.com

 

 

Small Employers: Reminder to Utilize Small Business Health Care Tax Credit

The IRS is encouraging small employers that provide health insurance coverage to their employees to check out the Small Business Health Care Tax Credit.

This program, which was enacted two years ago as part of the Affordable Care Act, provides income tax credits to small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement. The credit is specifically targeted to help small businesses and tax-exempt organizations provide health insurance for their employees.

The IRS recently revised the Small Business Health Care Tax Credit page on IRS.gov and included information and resources designed to help small employers determine if they qualify for the credit and then to compute it correctly. The webpage includes a step-by-step guide for determining eligibility and examples of typical tax savings under various scenarios. The credit is computed utilizing IRS forms 8941 and 3800.

Filing deadlines differ depending upon how a small business is structured, such as a sole proprietor, corporation, partnership, limited liability company or a tax-exempt organization. Taxpayers needing more time to determine eligibility should consider obtaining an automatic tax-filing extension. Businesses that have already filed and later find that they qualified in 2010 or 2011 can still claim the credit by filing an amended return. 

Additional information about eligibility requirements and figuring the credit can be found on IRS.gov or by contacting your G.R. Reid Tax Professional.

Commercial Insurance Services

 : : Louis Santelli, CPCU, CIC, Managing Director, Commercial Insurance Services
631.923.1595 ext. 330
G.R. Reid Insurance Services, LLC

Substance Abuse Costs Employers Billions

Substance abuse problems among employees cost businesses billions of dollars each year. According to the 2008 National Survey on Drug Use and Health, in that year, 73% of the nation's adults with alcohol or drug dependence were employed either full- or part-time. This amounts to nearly 13 million Americans working under the influence. Put another way, this data from the U.S. Substance Abuse and Mental Health Services Administration means that 8% of full-time employed adults and 10.2% of part-time employed adults are substance abusers.

For the majority of substance abusers, their problem lies with alcohol.  The same study reveals that slightly more than half of Americans aged 12 or older reported being current drinkers of alcohol (51.6 percent). This translates to an estimated 129 million people, which was similar to the 2007 estimate of 126.8 million people (51.1 percent). According to information published by Ensuring Solutions to Alcohol Problems, a part of the George Washington University Medical Center, alcohol abuse costs American businesses $134 billion in productivity losses annually, and the health care costs for these employees are about twice as high as for those without an alcohol abuse problem. Employees who are heavy drinkers use twice as much sick time as other employees, spend four times as many days in the hospital than the national average, and have higher rates of job turnover. Significantly, light and moderate alcohol users, who are greater in number than heavy drinkers or alcoholics, account for 60% of alcohol-related absenteeism, tardiness, and poor work quality. And, the problems of alcohol abusers go beyond the addicted individual: about 20% of employees say they have been injured by, have covered for, or have had to work harder because of other employees' drinking.

The above data shows that alcohol and other substance abuse takes a toll on workplace productivity, and contributes to higher medical costs both for treatment of the addiction and for substance-related medical issues. Employee substance abuse problems also result in an increased occurrence of workplace accidents and higher disability and workers' compensation costs. It is clearly in an employer's best interests to seek ways to minimize the impact of employees' substance abuse on the workplace. Experts in the field stress the importance of workplace practices that educate employees about the health hazards of substance addiction and encourage employees to seek early treatment of any problems. While stressing the importance of a drug-free workplace, policies that rely primarily on discipline can result in addicted employees hiding their problems out of fear of losing their jobs, and in co-workers enabling such behavior in a spirit of friendship. In that kind of environment, an addicted employee may resist seeking any available help-such as obtaining treatment under the medical plan or taking a leave to enroll in a treatment program-until a crisis occurs.

On the other hand, employees will be more likely to come forward and get the help they need if they believe that by doing so they will receive help, not punishment. The same is true of co-workers, who can be an invaluable resource in encouraging addicted employees to seek help and to stay on track once treatment has begun. Since most medical insurance plans include at least some substance abuse benefits, workplace communications about a business's policies on alcohol/drug use should include this information. Employees are more likely to seek help if they feel it is within their reach, and they may not realize that this benefit is available to them. Employee assistance programs (EAPs) also can offer screenings, counseling, and treatment referrals for employees with substance problems; depending on the EAP, it also may have worksite awareness and supervisor training programs.

Communications to employees about any available benefits should stress that both medical plan and EAP services are confidential. This, along with a supportive (rather than punitive) environment, increases the likelihood that employees will seek the help that they need.
With many dollars in lost productivity at stake, the reasons for businesses to promote substance abuse awareness are compelling. And, because work is such an important part of most people's lives, the workplace can be an effective place for substance abuse intervention to begin.

Accounting & Tax News

G.R. Reid Associates, LLP
631.425.1800

April 17 Tax Deadline

Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on Monday, April 16. According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year. Taxpayers requesting an extension will have until Oct. 15 to file their 2012 tax returns.

The IRS expects to receive more than 144 million individual tax returns this year, with most of those being filed by the April 17 deadline. The IRS will begin accepting e-file and Free File returns on Jan. 17, 2012.
 
Assistance Options
Last year, the IRS unveiled IRS2Go, its first smartphone application that lets taxpayers check on the status of their tax refund and obtain helpful tax information. The IRS reminds Apple users that they can download the free IRS2Go application by visiting the Apple App Store and Android users can visit the Android Marketplace to download the free IRS2Go app.

Virtual Service
The IRS has begun a new pilot program where taxpayers can get assistance through two-way video conferencing. The IRS is conducting a limited roll out of this new video conferencing technology at 10 IRS offices and two other sites, and may expand to further sites in the future. A list of locations is available on IRS.gov.
 
Check for a Refund
Once taxpayers file their federal return, they can track the status of their refunds by using the "Where's My Refund? tool, which taxpayers can get to using the IRS2Go phone app or from the front page of www.IRS.gov.  By providing their Taxpayer Identification Numbers, filing status, and the exact whole dollar amount of their anticipated refund taxpayers can generally get information about their refund 72 hours after the IRS acknowledges receipt of their e-filed returns, or three to four weeks after mailing a paper return.

Health Benefit Services News

: : Julie Seiden, Managing Director,
Health Benefits Services | 

631.923.1595 ext. 310

G.R. Reid Healthcare & Benefit Services, LLC

Is it Better to Self Fund Employee Health Benefits?

Employee health bills are fluctuating because of uncertainty related to the 2010 healthcare reform bill. Companies are trying to contain the damage by paying employee health claims out of pocket. Joseph Berardo, Jr., CEO of MagnaCare, said that the total savings from doing this could be between 10% and 20%. MagnaCare administers self-funded health insurance plans to municipalities and businesses in New Jersey and New York.

When employers debate whether to adopt a self-funding plan, the possibility of lower monthly healthcare costs should be considered in comparison with the risk of covering employees' healthcare bills. There is no concrete answer for this issue that is right for all situations. The best answer depends on the demographics of employee bases and the company's financial situation. The risk of an employee having an accident or developing a serious illness is a major concern.

Although nearly 93% of companies with more than 5,000 workers have self-funded plans, many smaller companies don't. According to a recent survey conducted by Kaiser Family Foundation, the reason for reluctance among smaller companies is the possibility of being hit with a large employee healthcare bill and not having enough cash to pay it. The survey found that only 16% of companies with under 200 workers had self-funded plans. However, experts in this industry expect interest in these plans to rise in the future.
 

The Benefits Of Self-Funded Plans


From the data gathered, it's clear that there are some benefits to self-funded plans. However, there are more benefits than those that are apparent on the surface.

1. Quality Of Data


Employers have better access to health claims of employees. In addition to this, they also have more information about their employees' demographic information. Exposure is limited only to employees instead of a broad population. This is a major benefit over regular health plans, which only offer generalized information.

2. Customized Plans


Employers decide what is covered in the plan. This includes benefits, exclusions and eligibility provisions. Employee cost sharing, retiree benefits and policy limits are also decided by the employer. With exemption from state rules, employers are able to decide on specific provisions without state considerations.

3. Control Of Cash


Since coverage isn't prepaid, employers have access to interest and cash income that wouldn't be available under regular insurance policies. Self-funded plans may also delay payment of health plan fees until the services have been charged. However, if claims are lower, the employer is able to retain the savings instead of allowing the insurer to keep that money. Another benefit is that self-funded companies are not under obligation to pay state health insurance premium taxes.

4. Lower Employee Premiums


Workers will enjoy lower premiums for both single and family plans. In addition to this, they also pay less upfront when they're enrolled in complete or partial self-funded plans than they would at a company that is fully insured.

5. ERISA Laws Replace State Regulations
This federal law exempts self-funded plans from the state's regulations. This includes reserve requirements, insurance laws, premium taxes, mandated benefits and consumer protection regulations. Employers must still abide by rules from the following entities:

• ADA

• U.S. Tax Code

• Health Insurance Portability & Accountability Act

• Newborns' & Mothers' Health Protection Act

• Pregnancy Discrimination Act
• 
Mental Health Parity Act
• 
Women's Health & Cancer Rights Act

The Cons Of Self-Funded Employee Plans


Although there are many benefits to enjoy by implementing self-funded plans, there are also potential downfalls. It's important to consider these.

1. Financial Risk

With less employees than a larger company, there is a higher statistical risk of costly claims for illnesses or accidents. Most employers with self-insured plans purchase stop-loss coverage in order to get a reimbursement for claims totaling amounts over a specific dollar level. In a description posted by the Self-Insurance Institute of America, stop-loss coverage is insurance that indemnifies a plan sponsor from claim frequency or severity that is abnormal. Companies such as Zurich, Gerber Life and Arch Insurance, which are all considered large companies, provide this type of coverage.
 
2. Administrative Risks

The Department of Labor has researched how self-funded employers fail to implement efficient administrative systems. Failure to correctly administer a plan is considered a breach of fiduciary duty. Employers take full legal responsibility for operating the plan, so it's important to realize just how crucial this responsibility is. In addition to worrying about this, there are also strict rules for private claims information. Since employers have access to such information, they must take further measures to protect it and keep it secure. In some cases, this may require hiring one or more security workers.
 
3. Administrative Costs

Self-insured claims can be administered within the company or handled by a subcontracted party, which is commonly called a TPA. These administrators assist employers in setting up self-insured group plans. They also coordinate stop-loss coverage, utilization review services and provider network contracts. However, there are extra costs for these services.
 
4. Economic Weakness

It may be necessary to keep a self-funded plan for a minimum of three to five years in order to fully enjoy the benefits. This may be extremely difficult for some companies during economic hardship.

Be sure to weigh the benefits and disadvantages of self-funded plans before making any changes. If the task of determining how profitable such a change would be is too difficult, consider hiring the services of a professional analyst. 

Financial & Wealth Services News

:: George G. Elkin, Managing Director, Financial & Wealth Services
631.923-1595 ext. 336
G. R. Reid Wealth Management Services, LLC  



What Is An Exchange-Traded Fund?
 
Exchange-traded funds (ETFs) are just one of the many types of investment funds available, but they have some qualities that are unique and set them apart from other vehicles. ETFs are securities that attempt to track all types of indexes, industries, or commodities. For example, an ETF might be made up of securities representative of the technological industry or of the S&P 500.*
 
When ETFs were first created in the 1990s, the aim was to mimic the movements of an index of a specific financial benchmark. Today, ETFs also follow industries and commodities, not just indexes. The investment vehicle with the sole purpose of mirroring a specific index is called an index fund.
 
One of the reasons some investors may choose ETF funds is because they combine the diversification of a mutual fund with the flexibility of a stock. ETFs do not have their net asset values calculated each day, as do typical mutual funds, but rather their prices may fluctuate throughout the day based on the rate of demand on the open market.
 
Although the value of an ETF comes from the worth of the underlying assets comprising it, shares may trade at a “premium” or a “discount.” ETF shares are sold on stock exchanges; investors can buy or sell them at any time during the day. The underlying assets of the fund are not affected by market trading.
 
Exchange-traded funds may have expense ratios that are lower than those of an average mutual fund, and they are usually more tax-efficient than most mutual funds. Additionally, shareholders can often invest as little or as much as they desire. However, an ETF cannot be redeemed by a shareholder; rather, it can be sold only on the stock market.
 
A downside to exchange-traded funds is the commission fee, which is generally not associated with a mutual fund. Commissions are involved because ETFs are traded like stocks, rather than like mutual funds. However, despite this downside, an ETF can be a diversified and low-cost investment that often has a low turnover rate, so you might want to consider ETFs as part of your investment portfolio. Keep in mind that diversification is a method to help manage investment risk; it does not guarantee against loss.
 
The return and principal value of ETF and mutual fund shares fluctuate with market conditions. Shares, when sold or redeemed, may be worth more or less than their original cost.
 
Exchange-traded funds and mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

 
* The S&P 500 is an unmanaged group of securities that is widely recognized as being representative of the U.S. stock market in general. The performance of an unmanaged index is not indicative of the performance of any specific investment. Individuals cannot invest directly in an index.
 
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.

This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc. All rights reserved.

George Elkin is a Registered Representative offering Securities through American Portfolios Financial Services, Inc. Member: FINRA, SIPC. Investment Advisory products/services are offered through American Portfolios Advisors Inc., an SEC Registered Investment Advisor. G.R. Reid Consulting Services, LLC  is not a registered investment advisor and is independent of American Portfolios Financial Services Inc. and American Portfolios Advisors Inc.
 
Unless specifically stated otherwise, the written advice in this memorandum or its attachments is not intended or written to be used for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
Information is time sensitive, educational in nature, and not intended as investment advice or solicitation of any security

Accounting & Tax News

Congress Passes Temporary Payroll Tax Cut Extension

G.R. Reid Associates, LLP
631.425.1800

The reduced 4.2% Social Security tax rate will remain in effect at least through February.

The Senate and the House of Representatives on Friday both agreed by unanimous consent to extend the reduced rate, and President Barack Obama signed the bill—the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765)—the same day. The reduced rate had been scheduled to end after Dec. 31.

In the new year, a conference committee of representatives and senators will be appointed to discuss extending the reduced rate for the rest of 2012.

The employee portion of the Social Security tax was reduced from 6.2% of the first $106,800 of wages to  4.2% for 2011 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, P.L. 111-312. The employer portion remained at 6.2%. Under the law enacted Friday, the 4.2% rate is extended through Feb. 29, 2012.

The act provides special rules for 2012 so that taxpayers with self-employment income and income from employment in excess of $18,350 (one-sixth of the 2012 Social Security wage base of $110,100) do not receive an extra benefit. If a full-year extension of the payroll tax cut is not enacted, taxpayers with income from employment for January and February that exceeds $18,350 will be required to recapture the excess benefit they receive. The recapture provision was included instead of a cap on the amount of employment income because of the compliance difficulties that would cause employers.

Because the extension affects withholding and was enacted only a little over a week before the higher payroll tax was scheduled to go into effect, it is not clear how well employers and payroll companies will be able to handle that change. The IRS on Friday notified employers that they should implement the lower payroll tax rate as soon as possible in 2012, but not later than Jan. 31 (IR-2011-124). The IRS also said that if an employer overwithholds during January, it should make an offsetting adjustment in workers’ pay as soon as possible, but not later than March 31, 2012. The IRS also said that it will issue more guidance on implementing the provisions of the two-month extension, including revised employment tax forms and information for employees who may be subject to the recapture provision.

The act also extends certain unemployment benefits and blocks a cut in Medicare payments to doctors.

Congress’ use of unanimous consent to approve the extension allowed it to send the bill to the president without requiring lawmakers who had left the capital to return to Washington.

Published in the Journal of Accountancy on December 23, 2011.

Commercial Insurance News

: : Louis Santelli, CPCU, CIC, Managing Director, Commercial Insurance Services
631.923.1595 ext. 330
G.R. Reid Insurance Services, LLC
 
Five Ways to Avoid OSHA Penalties

In a one-week period in September 2010, the U.S. Occupational Safety and Health Administration announced eight citations against employers; penalties totaled close to one million dollars. The agency fined a picture frame manufacturer for not protecting workers' hearing, allowing combustible dust to accumulate, and blocking exit routes. An excavating contractor is paying a six-figure fine for failing to protect workers against cave-ins. A painting contractor's scaffolding was missing railings, bracing and access ladders. Because OSHA had cited the company for these violations before, it levied a fine exceeding $200,000.
Clearly, failing to comply with OSHA regulations can be costly for employers. However, by implementing a few new procedures and attitudes, a company can reduce the chances that its name will end up in an OSHA news release.

Keep in mind that insurance does not cover many of the costs resulting from workplace accidents, such as time spent on investigating the incident, reduced employee morale, productivity lost because of the disruption and the absence of a worker, reporting costs, and the cost of OSHA penalties. 

Improve record keeping. 
Think of good documentation as your first defense against an OSHA inquiry. Inspectors who find information gaps in the OSHA 300 log (the record of work-related injuries and illnesses) may initiate a full-scale safety audit of the business. If your business has deficiencies in its logs for the past three to five years, devote some time to correcting them. Personnel files and workers' compensation loss records can provide much of the missing information.
Focus on ergonomics. OSHA has announced that it will pay special attention to musculoskeletal problems. Businesses that seek out ways to prevent repetitive motion disorders will avoid citations and penalties. They will also pay lower workers' compensation insurance premiums in the long run. Analyze how workers are performing their tasks and look for ways to reduce the strain on their joints, necks and backs.
 
Fix the routine violations first. 
Some safety issues are simple and cost little or nothing to correct. 
For example:

• Blocked exits
• Lack of protective equipment, such as gloves and safety goggles
• Poor housekeeping
• Improper storage of materials such as flammable liquids

These problems can accumulate over time if management is not paying attention. Operations with large numbers of these violations have paid substantial penalties to OSHA, so monitoring and correcting them is essential.

Have a plan for disasters. 
Hurricanes in recent years and 9/11 have taught us that all organizations need to have emergency procedures in place for sudden events like storms and terrorist attacks and gradual events like flu pandemics. 

Disaster plans should include:

• Training for employees on what to do in the event of an emergency
• Procedures for safe evacuation from the building
• Workplace hygiene
• Stockpiling of emergency supplies such as first-aid kits
• Arrangements for operating from remote locations
• Communications with employees, their families, customers and vendors

Although OSHA will not be concerned with some of these aspects of the plan, having them in place will help the business survive the event.

Look at safety as a profit driver, not a cost center. 
Preventing workplace injuries costs money, but it also saves money and can improve a business's profitability. Some project owners and general contractors will consider bids only from contractors with workers' compensation experience modifications lower than 1.0. Firms with a reputation for safe operations will attract better workers. 

Money saved on accidents that never occur goes straight to the bottom line.
Some workplace injuries may occur despite an employer's best efforts to prevent them. However, taking reasonable steps to improve safety in the workplace will reduce the frequency and severity of those injuries, make the business more competitive, and avoid problems when an OSHA inspector visits.

Accounting & Tax News

G.R. Reid Associates, LLP 
631.425.1800

 Standard Mileage Rates for 2012


The IRS recently released standard mileage rates for use in 2012 (Notice 2012-1). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile. For business use of an automobile remains at 55½ cents per mile. For medical or moving expenses, it is 23 cents per mile (a half-cent decrease from the second half of 2011). For services to charitable organizations, the rate (which is set by statute) is 14 cents per mile.
Rather than using the standard mileage rates, taxpayers may instead use their actual costs if they maintain adequate records and can substantiate their expenses. The rules for substantiating these amounts appear in Rev. Proc. 2010-51. For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2012 (it was 22 cents per mile for  2011).

Health Benefit Services News

: : Julie Seiden, Managing Director,
Health Benefits Services | 

631.923.1595 ext. 310

G.R. Reid Healthcare & Benefit Services, LLC




2012 HSA & FSA Changes to Know About

Health savings accounts and flexible spending accounts are growing in popularity. Many people aren't aware of the changes that take place in these plans from year to year. It's important to discuss account details with an agent each year to be fully aware of the current rules or upcoming changes.

Flexible Spending Accounts

These accounts are sometimes called flexible spending arrangements. They are tax-advantaged accounts that let employees automatically deposit a specific amount of each paycheck into them. After funds accumulate, they can be used to pay for qualified medical expenses. These accounts are different from HSAs and HRAs in the respect that they are usually offered with traditional medical plans. They also differ from HSAs in the respect that the unused funds in the account may not be carried over to the next year. Debit cards or forms are used to access funds from the account if money is needed. Flexible spending accounts allow account holders to contribute to the FSA for any costs that aren't covered by insurance. Some examples of such expenses include coinsurance, copay amounts and deductibles. If a health insurance won't cover a treatment or related health expense, FSA funds can be used to pay for it. The specified limits saw some changes from 2011 to 2012.

Contribution Limits

It was decided that 2012 would be the last year for no limits on FSA contributions. While there may not be limits in place, plans must specify a maximum percentage of compensation to be contributed to the FSA or a maximum dollar amount. The changes from 2010 to 2011 included over-the-counter medicines being eliminated from coverage if they weren't prescribed by a doctor. The year 2013 will likely see one of the biggest changes: FSA contribution limits of $2,500 annually with yearly inflation increases.

Health Savings Accounts

HSAs are medical savings accounts that also have tax advantages. Taxpayers who are enrolled in HSA-qualified health plans with high deductibles are able to obtain them. At the time of deposit, the funds contributed to these accounts are not subject to federal income tax. Any unused funds that remain in the account at the end of the year are carried over to the next year and added to further contribution amounts. Since contribution also change with these plans each year, it's important to be aware of the changes. The changes from 2011 to 2012 include an increase in out-of-pocket HDHP maximums and HSA contribution limits. However, there are no changes with the HDHP required minimum deductibles.

HSA Contribution Limits

Family: $6,250

Individual: $3,100

Catch-Up Contributions: $1,000
The individual amount of $3,100 reflects an increase of $50 from 2011s limit. 
The $6,250 limit for families is an increase of $100 from 2011. 
Catch-up contribution limits, which are for people over the age of 55, remain the same between 2011 and 2012.

HDHP Minimum Required Deductibles

Self: $1,200

Family: $2,400

HDHP Out-Of-Pocket Maximum - Family: $12,100

HDHP Out-Of-Pocket Maximum - Self: $6,050
The HDHP limit increased by $100 between 2011 and 2012 for singles and by $200 for families. 

Another change between 2011 and 2012 is eligibility of over-the-counter medicines. Insulin is the only OTC medicine approved for reimbursement in 2012 under a health FSA, HSA or HRA without a prescription. In addition to this, it was decided that the penalty of 10 percent for ineligible expenses paid for using HSA funds would increase to 20 percent in 2012.

Commercial Insurance Services

: : Louis Santelli, CPCU, CIC, Managing Director, Commercial Insurance Services
631.923.1595 ext. 330
G.R. Reid Insurance Services, LLC


Never Cut Corners When it Comes to Safety in The Workplace

Some employees are happy to take chances when it comes to safety. They take needless risks in an effort to save time or cut their work load. In reality, all they're doing is subjecting themselves and others to hazards that could cause a serious injury. Workers form bad habits when they repeatedly perform their jobs in an unsafe way and don't get injured. They become convinced that because of their skills they are incapable of being hurt. It's this attitude that usually ends up doing them in, because they take even more chances until eventually a serious accident does occur. Unfortunately, that one accident can turn out to be fatal.

Most of a chance-taker's careless acts can be broken down into one of the following categories:

• Failing to follow proper job procedure
• Cleaning, oiling, adjusting, or repairing equipment that is moving, electrically energized, or pressurized
• Failing to use available personal protective equipment such as gloves, goggles, and hard hats
• Failing to wear safe personal attire
• Failing to secure or warn about hazards
• Using equipment improperly
• Making safety devices inoperable
• Operating or working at unsafe speeds
• Taking an unsafe position or posture
• Placing, mixing, or combining tools and materials unsafely
• Using tools or equipment known to be unsafe
• Engaging in horseplay

Although OSHA does not cite employees for safety violations, each employee is obliged to comply with all applicable OSHA standards, rules, regulations, and orders. Employee responsibilities and rights in states with their own occupational safety and health programs are generally the same as for workers in states covered by Federal OSHA.

Employees should follow these guidelines:

• Read OSHA notices at the jobsite
• Comply with all applicable OSHA standards
• Follow all lawful employer health and safety rules and regulations, and wear or use prescribed protective equipment while working
• Report hazardous conditions to a supervisor
• Report any job-related injury or illness to the employer, and seek treatment promptly
• Exercise these rights in a responsible manner

If you are working with a risk-taker, ask him to stop and consider what jeopardy he is putting himself and others in. Then buddy up with him to find a safer way to perform the task. Remember, unsafe actions don't result in saving time if a worker gets injured in the process. 

Financial Services News

G.R. Reid Consulting Services, LLC


Retirement
A Recent Survey Revealed That Many Affluent Retirees Would Go About Saving for Retirement Differently If They Had To Do It Again.

Most notably, these wealthy retirees expressed a desire for more professional help in preparing for retirement. In fact, 55% of survey respondents regretted that they didn’t start talking to a financial professional earlier.1 Savvy investors can learn from the mistakes of others. With the uncertainty surrounding income taxes, capital gains taxes, and the estate tax, the value of a professional opinion may be more important now than ever.

Retirement Wake-Up Call
According to the survey, the most recent recession gave many affluent retirees pause to reconsider their approach to retirement. About half of the retired respondents wish they had spent more time thinking specifically about the lifestyle they wanted in retirement. Furthermore, they recommended that those nearing retirement take the time to consider exactly how they would like to live out their later years. 2

Have You Thought About Your Ideal Retirement Lifestyle?
Think about the specifics. Will it be in the same house and town? What activities will fill your days? Golf? Travel? Now consider what it’s going to take financially to get you there. A review of your situation can help connect the dots between your current situation and the retirement lifestyle you desire. About half of the retirees surveyed said they wish they had concentrated more on “the numbers.” 3 A focus on the details of preparing for retirement can be an eye-opening exercise.
Remember also that retirement planning is not a fix-it-and-forget-it proposition. It might be appropriate to take a second look periodically as life changes could necessitate modifications to a retirement strategy. How has your vision of retirement changed over the years? Is it time to run “the numbers” again?

You’ve Already Gone Pro
What’s the takeaway from all of this, given that you are already working with a financial professional? There is no assurance that working with a professional will improve your investment results. But by focusing on your overall objectives, a financial professional can provide education, identify strategies for taking control of many situations, and help you consider options that could have a substantial effect on your long-term financial goals.

Please call G.R. Reid Consulting LLC for a retirement evaluation, 631-923-1595.


The above information was supplied by Emerald Connect, Inc. All rights reserved © 2011.  This material may not be reproduced without permission.
 1–2 Investment News, January 18, 2010  3 The Wall Street Journal, January 15, 2010
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Unless specifically stated otherwise, the written advice in this memorandum or its attachments is not intended or written to be used for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. Information is time sensitive, educational in nature, and not intended as investment advice or solicitation of any security. The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal income tax penalty. You are encouraged to seek tax or legal advice from an independent professional advisor. G.R. Reid Consulting Services, LLC  is not a registered investment advisor and is independent of American Portfolios Financial Services Inc. and American Portfolios Advisors Inc.