Consider these financial tips in troubling economic times

Reacting badly to bad national economic events can turn a challenging situation into a devastating one. When troubling headline news comes your way, consider these tips before making financial moves. [Read more…]

Could you qualify for a partial home-sale exclusion?

Generally, when you’re single, you can exclude up to $250,000 of gain from the sale of a home ($500,000 if you’re married filing jointly) when the home is used as a primary residence for two years in a five-year period that ends on the date of sale. Tax law also provides for a partial exclusion when the time and ownership requirements are not met, if the primary reason for the sale is unforeseen circumstances. “Unforeseen” means events you could not have reasonably anticipated before buying the home and moving in. How flexible is the definition? Recently, the IRS allowed a partial exclusion when a family living in a two-bedroom, two-bath condominium gave birth to another child and needed a larger residence before the two-year rule was met.

FSA or HSA? Choosing between health accounts

Are you confused about your choices for paying medical expenses under your employer’s benefit plan? Here are differences between two types of commonly offered accounts: a health savings account (HSA) and a health care flexible spending account (FSA).

Overview. An FSA is generally established under an employer’s benefit plan. You can set aside a portion of your salary on a pretax basis to pay out-of-pocket medical expenses. An HSA is a combination of a high-deductible health plan and a savings account in which you save pretax dollars to pay medical expenses not covered by the insurance.

Contributions. For 2016, you can contribute up to a maximum of $2,550 to an FSA. Typically, you have to use the funds by the end of the year. Why? Unused amounts are forfeited under what’s commonly called the “use it or lose it” rule. However, your employer can adopt one of two exceptions to the rule. [Read more…]

IRS sets 2017 HSA limits

The IRS announced inflation-adjusted limits for deductible contributions to health savings accounts (HSAs) for 2017. For family coverage, the contribution limit will be $6,750, and for individual coverage, the limit will be $3,400. If you’re age 55 or older, you can contribute an additional $1,000 during 2017. HSAs combine high-deductible health insurance plans with pretax contributions to a healthcare savings account. The savings account funds can be withdrawn tax-free to pay unreimbursed medical expenses.

Tax filing reminders

  • September 15 – Third quarter installment of 2016 individual estimated income tax is due.
  • September 15 – Filing deadline for 2015 tax returns for calendar-year corporations that received an automatic extension of the March filing deadline.
  • September 15 – Filing deadline for 2015 tax returns for partnerships that received an extension of the April filing deadline.
  • October 1 – Generally, the deadline for businesses to adopt a SIMPLE retirement plan for 2016.
  • October 17 – Deadline for filing 2015 individual tax returns on extension.
  • October 17 – Deadline for reconverting a Roth IRA to a regular IRA.

What business entertainment expenses are deductible?

As a general rule, you can deduct 50% of what you spend on business entertainment on your federal taxes. Although the IRS is very strict about requiring you to document the expenses and their business purpose, it can be surprisingly generous about what counts as a business expense. [Read more…]

Businesses can’t agree not to ‘poach’ employees

It might be tempting to informally agree with other business owners in a niche field not to poach one another’s employees, but it’s illegal – and recently, some businesses have paid a high price.

For example, the Department of Justice went after several tech companies that allegedly had an informal “no-poach” understanding. The employees themselves then filed a class action, which resulted in a $415 million settlement. [Read more…]

New rules are resulting in faster union elections

Many businesses have predicted that new federal rules that took effect last year could result in “quickie” union elections in which the employer wouldn’t have time to campaign effectively and get its message across. It now looks like those fears might be justified – the average time before a private-sector union election is now only three weeks, compared to five weeks previously, according to the National Labor Relations Board. [Read more…]

Beware of trademark scams

The U.S. Patent and Trademark Office has put its records online, including trademark owners’ full addresses. As a result, many shady but official-sounding businesses are now contacting trademark owners and offering scam services.

For instance, such businesses may offer to arrange third-party publication (which is unnecessary), or they may offer legitimate services such as filing a record with the Customs Office at exorbitant prices.

The most dangerous scams offer to renew a trademark registration without properly updating the declarations as to identification and use. Trademarks that are renewed in this manner may later turn out to be invalid, and may be cancelled or successfully challenged by competitors. [Read more…]

Managers’ ability to keep investigations secret is limited

Can a company that conducts an internal investigation tell the employees it’s interviewing not to talk about the matter while the inquiry is pending?

Not necessarily, according to a new decision by the National Labor Relations Board. The ruling applies to all businesses, regardless of whether they have a union.

Companies can insist on confidentiality only if certain conditions are met, the Board said. [Read more…]

Creating an LLC? What you need to know

Many business owners think it’s easy to set up an LLC. That’s partly the result of companies and websites that claim to offer simple, “standardized” LLC operating agreements. Just fill in the blanks and you’re off!

In reality, there’s no such thing as a “standard” LLC operating agreement. You have a lot of choices to make, and even if you’re starting a very simple business, your choices will have a profound effect on you down the road if the business takes off. [Read more…]

Company can’t ask for ‘inexperienced’ job applicants

A medical device company in Illinois posted an ad for a job in its legal department, saying it would only consider candidates who had no more than seven years of relevant legal experience.

It got a resume from 59-year-old Dale Kleber, who had previously served as general counsel of a Fortune 500 company, CEO of a national trade organization, and interim CEO of a different medical device business. The company didn’t even give Kleber an interview, and hired a 29-year-old instead. [Read more…]

49-year-old replaced by 42-year-old can sue

Salesman Robert Liebman was fired at age 49 after working for the Metropolitan Life Insurance Company for 27 years. He sued under the federal age discrimination law, which prohibits discrimination against workers over age 40.

MetLife argued that Liebman’s firing couldn’t possibly be discrimination because it replaced him with someone who was 42 years old, and thus was also protected by the law.

But a federal appeals court in Atlanta said it didn’t matter that Liebman’s replacement was also over 40. As long as his replacement was “substantially younger,” Liebman could sue and have a jury decide if he was discriminated against.

Employers can be tripped up when requiring arbitration

A growing number of employers are requiring employees to sign arbitration agreements, saying that any future employment disputes must be resolved by arbitration rather than going to court.

Arbitration has a lot of advantages for businesses – it can be quicker and cheaper to resolve than a lawsuit, and the details of any disagreements don’t become a matter of public record.

However, if companies require employees to sign these agreements without thinking them through carefully, they can backfire. [Read more…]

Company sued for breaking oral promise not to fire someone

Denise Parker was an administrator at a nonprofit youth leadership organization for nearly 40 years, receiving consistently strong performance reviews.

But when the organization hired a new CEO, his management style lowered morale and made many employees worried about losing their jobs. Parker herself received a vague warning that there were people “lined up in the street” waiting to take her job. [Read more…]

Two mistakes companies make with non-compete agreements

A lot of companies require their employees to sign non-compete agreements (where the employee agrees not to work for a competitor for a certain amount of time after leaving the company), non-solicitation agreements (where the employee agrees not to seek business from the company’s customers after leaving), or confidentiality agreements (where the employee agrees not to divulge the company’s proprietary information to anyone).

But two recent cases show that companies can make mistakes with these agreements that render them legally invalid. [Read more…]

Workers with substance abuse issues benefit from ‘last chance agreements’

Substance abuse is a rapidly growing workplace issue, especially given the recent opioid epidemic. Many employers are scratching their heads wondering what they can do, and many employees affected by the problem are wondering if there is a way to save their jobs.

Of course, substance abuse is a major problem in the workplace, since it can lead to absenteeism, lost productivity, increased health care costs, and in the worst cases, accidents, injuries and even violence. [Read more…]