Ohio Bureau of Workers’ Compensation’s First True-Up Report Due August 15

With the changes the Ohio Bureau of Worker’s Compensation has made as to how premiums are paid, we do not want any employer to miss filing the first annual true-up report due August 15, 2016. With the BWC’s switch to prospective billing July 1, 2015, private employers have been invoiced their 12-month premium in installments over the last twelve months. Employers must now reconcile their actual payroll for the period July 1, 2015 to June 30, 2016, to the premium installments paid, called a payroll true-up.

Payroll true-ups must be submitted online at www.bwc.ohio.gov, by phone at 1-800-644-6292 or in person at a BWC customer service office. The BWC will not lapse employers’ coverage for not reporting the payroll true-up. However, the BWC will remove employers from their current rating plan or discount program if it does not receive a payroll true-up by the due date. A Go-green discount is also available for employers who complete the payroll true-up online by the deadline.

Please contact our office at 513-576-6770 or email rcupp@donohoocpa.com with any questions you might have related to payroll true-up report filing or any tax matters.

Will You Be Audited?

The easy answer to this question is most likely, NO!

Recent analysis of IRS data shows that less than 1%, about 1 out of every 104, tax returns are audited. Because of IRS budget cuts and other factors, random audits are very rare. Certain taxpayers and certain items (red flags) raise your audit chances.

Taxpayers with income over $ 200,000 have a 1 in 30 chance of being audited while taxpayers with income over $ 1 million have a 1 in 9 chance of being audited.

Some of the deductions that could trigger an audit include deducting large amounts of charitable donations compared to your income, claiming rental losses, claiming hobby losses, and taking higher than average deductions in general. I R S has data that shows what the typical deductions are for every income level and amounts outside these norms are subject to more scrutiny.

Small business owners are also subject to higher audit rates. The areas that I R S looks at closely include deduction of an office in the home, meals and entertainment and the business use of vehicles (especially 100% business use).

If you are a small business owner or individual and have any questions or concerns about the possibility of an IRS audit, please contact our office at 513-576-6770. Our CPAs and tax professionals have experience in protecting our clients as well as expertise in advising small business on tax, accounting and management strategies.

Higher Federal Unemployment Taxes

As a result of previous loans taken from the Federal Unemployment Tax fund that remain unpaid, Ohio, Kentucky and Indiana employers owe more payroll taxes in 2013. The unpaid amounts result in the federal government reducing the credit given to employers in these states and subsequently raising the net federal unemployment tax rate. Details by state are as follows:

State               Reduction %              Maximum Wages Taxed     Additional Cost*
Ohio                     0.9%                             $ 7,000                            $63 per employee

Kentucky             0.9%                             $ 7,000                            $63 per employee

Indiana                1.2%                             $ 7,000                            $84 per employee

*The additional cost calculation assumes that the employees have reached the FUTA Maximum wage amount for 2013 of $ 7,000. If a particular employee has not reached the maximum amount, the cost is calculated by multiplying their wages times the reduction %.

Please contact our office at 513-576-6770 or email rcupp@donohoocpa.com if you have any questions.

Two Requirements Employers* Must Meet Prior To and After October 1, 2013

October 1, 2013, is the deadline for employers to notify employees about the state-run insurance exchanges that will begin in 2014.

The Patient Protection and Affordable Care Act requires employers*, including those who do not offer health insurance coverage, to:

1) Distribute notification, regardless of enrollment and employment status (part-time or full-time), to all persons employed prior to October 1, 2013.

2) Provide notice to all employees hired after September 30, 2013, at the time of hiring.

Notification must include (a) the existence of an insurance marketplace, (b) that the employee may be eligible for premium assistance and a subsidy under the marketplace, and (c) that if the employee purchases a policy through the insurance marketplace, he or she may lose the employer contribution to any health benefits offered by the employer.

The Department of Labor has provided two model notices, for employers who offer health plans (http://templatelab.com/FLSA-with-plans/), and for employers who do not offer health plans (http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf).

For more information about this provision of the Fair Labor Standards Act (FLSA), visit the United States Department of Labor website at http://www.dol.gov/ebsa/newsroom/tr13-02.html.

If you have any questions or concerns, please don’t hesitate to contact our office at (513) 576-6770, and we would be happy to assist you. 

*In general, the Fair Labor Standards Act (FLSA) applies to employers that have (a) one or more employees who are engaged in commerce and (b) gross annual sales of $500,000 or more. Businesses Affordable.

Ohio Sales and Use Tax Rate Increases September 1, 2013

The Ohio Sales and Use Tax Rate increases by 0.25% effective September 1, 2013, a measure included in the recently approved two-year state budget.

For the counties of Hamilton and Clermont, the sales tax rate will increase to 6.75%. Businesses operating in any other Ohio counties can access a detailed list of sales and use tax rates by county provided by the Ohio Department of Taxation at:

The Department also provides a list by city or village and ZIP code at:

Ohio Governor and General Assembly Approves $2.7 Billion Tax Cut

Effective July 1, 2013, tax law changes approved by Ohio Governor John Kasich and the Ohio General Assembly in the biennial budget provided a $2.7 billion tax cut to Ohio businesses and individuals.   The measures included a 10% personal income tax cut phased in over the next three years, a 50% tax deduction on the first $250,000 of income for businesses structured as pass-through entities, and a new earned income tax credit for lower income households. In addition, changes were made to the state sales and use tax, income tax, Commercial Activity Tax, Motor Fuel Receipts Tax, real property Tax and tobacco tax.

For the Ohio Department of Taxation’s recent release on the modifications affecting Ohio income tax click  http://www.moormanharting.com/Documents/Ohio%20Income%20Tax%20Changes

Continuing updates can be found at www. tax.ohio.gov or by contacting your tax professional.