Beauty Store Business

NOV 2017

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52 November 2017 | beautystorebusiness.com Kirk says, "I ended up making some major mistakes and getting fined heavily by the IRS—to the point where some- body actually came into my place of business during my workday and flashed their ID and served me papers!" Kirk's experiences as a small-business owner provide her with the perfect view- point to judge the benefits of the app. "When I joined Simon, I found out our Simon Payroll App, which we launched in March, is absolutely the best option for salon, spa and boutique businesses. … Being intimately familiar with the salon industry for so long, I can say that if I had had Simon I would have never gotten fined by the IRS, and I would have been counseled by experts who know what they were talking about. I would have saved a lot of money," she says. SIMPLIFYING PAYROLL Charles Read, president and CEO of Simon, is not only a CPA but a U.S. tax court practitioner. "There's only about 200 of us total in the country," says Read. "That allows me, as a nonattorney, to practice in a U.S. tax court." As an expert in payroll tax compli- ance, Read has taken his decades of experience and incorporated it into the Simon Payroll App to help the compa- ny's clients avoid payroll tax headaches. "When the IRS screws up, we know how to fix it," Read says. According to him, 40 percent of all penalties the IRS issues are abated every year. In 2005, Read launched GetPayroll, a software program to help businesses with up to 50 employees manage their payroll and tax obligations. Read learned that millions of small businesses don't need all the features required by larger companies. So he distilled the essentials of GetPayroll down to just those needed by companies with 10 or fewer employ- ees. The result is Simon Payroll App, which costs just $20 per payroll for up to five employees, and $30 for up to 10. With Simon, busy beauty store and salon owners don't need to be concerned if they have to make a lot of different payments on payday. The app provides alerts, including a countdown ticker and text messages, when it's time to run your payroll. Funds are transferred from your bank to Simon to cover the pay- roll, including taxes. From there, Simon pays the appropriate amounts by direct deposit to each employee, with the taxes paid automatically to the various agencies for you. Simon works well because it is set up specifically to service small businesses. There are other services that allow you to run a 1,000-person payroll in 15 states. "But you pay for that," Read says, "even if you have only four or five people on the payroll." With other services, you're paying for EEOC (U.S. Equal Opportunity Commission), Affordable Care and other compliance issues you might not need. TIME SAVER A 2017 survey by the National Small Business Association revealed that the typical small-business employer spends a significant amount of time preparing pay- roll. Almost 85 percent of the respondents had fewer than 20 employees. One-third of them reported spending more than six hours a month preparing payroll. This amounts to more than 72 hours per year—time that could be spent more productively growing the business. According to Read, about 55 percent of businesses in the U.S. outsource their payroll. While the benefits of outsourcing payroll are saving time and reducing the potential for costly errors, Simon Payroll App is designed to excel in both these areas. "At Simon," Read says, "we guar- antee that our clients won't have IRS tax problems. If they have problems, we will solve them. Should we make a mistake, if we cannot abate any penalty or interest, we will pay it." Kirk emphasizes the efficiency of going paperless. "I used to do all my pay- roll and paperwork on one of my facial beds in between clients. If I had had it right on my smartphone or on my iPad, I could have just done it right then and there. Now it's so easy!" ■ RESPONDING TO IRS NOTIFICATIONS No matter who's at fault, don't ignore the IRS! Simon president and CEO Charles Read says, "As a CPA, one of the things I see on a constant basis is payroll tax problems from people who try to do their own payroll. They screw up and then the IRS sends them a letter and they have no idea what to do. They don't know whether they screwed up or the IRS screwed up. The IRS makes numerous egregious errors every day, and then insists that you pay them." Jing Wang, another long-time CPA, agrees. "The IRS makes mistakes all the time!" she says. But one problem that can cause confusion is the proliferation of scams. Wang says, "It's hard to know with so many scams going on where people impersonate the IRS." The IRS will never just call you. They will send you a letter in the mail first. Wang counsels her clients never to ignore tax notices. "When you get something," she says, "always send it to your accountant." That includes notices or letters that don't appear legitimate. You want to pass them on to your accountant just to make sure. Because mistakes happen, the Simon Payroll App offers a guarantee. "When we make a mistake, it should not be the client's problem," says Read. "If clients have provided us with the correct information and notify us of any changes, we will guarantee the accuracy of their filings and deposits. And when—not if—the taxing authority makes a mistake, we will fix their errors as well, at no cost to the client." Outsourcing certain jobs to contractors can save you time and money. It's easier to hire and replace contractors, and you don't need to withhold taxes from the money you pay them. But employers need to be careful. Charles Read, president and CEO of Simon, says, "Employee classification is something the IRS is very hot on at the moment." Jing Wang, a CPA and business consultant based in Los Angeles, says, "If you have any doubts, it's best to include all your workers as employees, and not contractors." She explains, "To be correctly classified as a contractor, that person must have other customers, not just you. They are typically skilled workers with a license." Contractors are not restricted like employees. Wang says, "Contractors can make their own decisions about how and when they deliver their services. You cannot tell them exactly when and how things are to be done." "You need to get a W-9 from your contractor first," she recommends. "And you have to ask for invoices. Everything must be in place, and then you can offer work that is project based. Otherwise they are employees." At the end of the year, businesses send contractors copies of the 1099 tax form rather than the W-2 forms that employees receive. Read warns that in spite of the advantages of using contractors, employers can still be on the hook for taxes. He says, "A lot of 1099-ers don't file their taxes. And if they really are employees, then the IRS will come back and make you pay all the taxes you should have withheld. And then you have to go get it from the 1099-er that you didn't collect it from." ACCURATE EMPLOYEE CLASSIFICATION SAVES MONEY Are you properly classifying workers as employees or independent contractors? Get Connected! @getpayroll getpayroll.com @getpayroll

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