Michigan Unemployment Rate Changes

Recently, the State of Michigan unemployment insurance agency, commonly known as UIA, changed its annual wage base per employee from $9,500 down to $9,000.

This change is effective for all employers who have wages and have paid wages in 2015. The change will be effective as of the third quarter 2015, and will not be retroactively applied. While this is a small incremental change it will save the average taxpayer approximately $18.50 per employee, per year in unemployment taxes. This is a nice surprise for Michigan employers; it’s always nice when your unemployment rate changes for the better.

If you have unfiled reports or you have an outstanding balance on your Michigan Unemployment Account (UIA account), your business will not qualify for these changes. If however you pay your delinquent unemployment taxes due and/or file your unfiled unemployment reports you may be able to qualify for this change.

If you have any questions in regards to these changes please feel free to reach out to us. For more information about these changes click here.

Business growth

Business growth can be good—or it can be a disaster. If you’re considering growing your small business, consult with a CPA for strategic advice that will help you determine your next steps. Your business growth strategy is an important step in the progression of your small business. See how Capstone CPA Group can help

White House proposes sweeping changes to overtime rules

file4741281776353As many business owners already know overtime rules are traditionally pretty standard. There are two basic principles: One, if you pay more than a very low threshold in salary per year (23,660). And, your employee performs executive, administrative tasks, or is a special class of worker called a professional worker then this employee would not be subjected to the overtime rules.

Under the changes proposed and to be ruled on in 2016, the Department of Labor is suggesting some large and sweeping changes. First, the pay threshold to avoid paying overtime would be increased to $50,440 and be adjusted for inflation thereafter. Second, there would be more restrictive rules on which types of jobs would qualify as executive, administrative and professional workers. These changes are estimated to affect nearly 5 million workers in the US. Since this is a short-story format. I cannot include all the information that has been proposed. For this reason, if you need more information, click here.

Normally, we are not in the business of reporting or commenting on proposed changes, however the information contained in this proposal is very significant. If you have any questions about overtime rules, or the proposed changes, feel free to reach out to us.

Strategic advice

Do you want your small business to grow? A CPA is a trusted business advisor who can offer strategic advice that will help get you to that next level. At Capstone CPA Group we tailor all of our solutions to your needs. We believe small business growth is more important than most other offerings. Feel the difference.

Bill eliminates prepayment of taxes Michigan

The State of Michigan has changed a long standing collection issue. Recently the State of Michigan passed and signed into state law, Senate bill 100. Under prior law, when you had an outstanding debt with the State and did not contest your bill prior to it being assessed; The only way to argue the assessment was to first pay the bill, including penalties and interest. Once you paid, you could then argue / protest the underlying tax. This prepayment requirement was often a very harsh penalty in and of itself.

Thanks to Senate bill 100, much of that has changed. Now, if you are a resident of the State of Michigan, you no longer have to pay the debt in order to argue or protest the underlying tax assessed. This is a rather large procedural change, and opens the door to a more fair and equitable dispute system. Watch for more posts regarding tax collection issues for the State of Michigan. For more information about this bill click here. If you are a tax nerd, you may also want to check out the actual bill, by clicking here.

Financial statements

We can help you grow your small business by preparing financial statements to show potential lenders. If you are trying to secure a loan, you may need financial statements or a compilation. See how Capstone CPA Group can help.

Freelancers on the rise

Congratulations to young entrepreneurs! You are the catalysts of economic growth. People have started to think about work differently. Similarly, companies are also starting to see freelance and contract jobs as a benefit as well. Plus, job connection sites have made it easier to connect businesses with freelancers looking for work.

Click here for more information about the freelance movement


Merry Christmas

To all our friends and family we want to wish you a very Merry Christmas!

Construction Contracts

One of the most important things to understand in the construction industry is how to bill for services. Once you have a better understanding of the billing structure it is much easier to compare bids and construct the contract.

This post is not a complete list of all forms of construction contracts and there may be instances where contracts have portions of each type of contract.

Fixed price / Lump sum contract:

From the name you can understand fairly easily that the lump sum or fixed price contract is a construction contract that stipulates the price of the building project based upon the needs included in the design/per your written contract. However, it is important to note that usually these construction contracts are fixed as it relates to the agreed service level. In the construction industry changes happen constantly. For this reason, construction contractors should get signed change orders as changes occur so they are not left eating the cost of construction changes when the contract is complete.

Cost plus contract:

With the cost plus contract, the construction company says that they will charge the contract out at the cost of materials plus a percentage or fixed price for their own construction time. This model is based upon the thought that construction materials represent the largest portion of the overall construction contract.This model is nice in a scenario with many change orders, because it usually avoids the need for many signed change orders (as long as the change order can be supported in some manner). This is also nice for construction companies because purchasers are more concerned with the reputation of the company they hire, not the cost of the project. These types of contracts are also helpful as they can be bid before the scope of the project is known completely. Certain preparatory work such as site preparation, utility work and other prep stage projects are agreed based upon a cost plus model.

Maximum price contract:

Under a maximum price contract, or a price not to exceed contract, the construction company bids on the job, or part of the job and gives an overall estimate of the fees involved with a cap on the price charged for the project. Under this model, construction companies have an incentive to cap overall costs, while still making sure that the project is done appropriately. Many buyers are more willing to sign a cost plus contract with a price not to exceed, than a cost plus contract. The fact that these contracts are more valuable to consumers is the incentive for this type of contract. Many construction contractors include incentives to share the “cost savings” if the actual cost of the construction project comes in lower than the maximum price. This blending of risk and reward makes the maximum price contract a very attractive option in the construction field.

Unit price contract:

Unite price contracts are usually used in construction for repetitive tasks, which at the start of the contract the actual amount of the service is unknown. Examples of this type of contract include an agreement to deliver a certain amount of rocks, soil or other aggregate for a specified price per yard/ton. These types of contracts are used extensively in the road construction contracts as the tasks are usually repetitive and the costs can be estimated on this basis with relative ease.

Construction accounting can be very complex. If you are in the construction industry and do not use someone who specializes in the industry you are throwing money away. Let us focus on your business so you can run operations.

Giving Thanks

Thanksgiving is a time to reflect on everything we are thankful for. With that in mind, I wanted to take a minute to thank my family, friends and loved ones for all of their love and support in the last year.

I love Thanksgiving because it is a time to get together over a meal with everyone I love and catch up with them.

I hope you have a wonderful Thanksgiving with everyone you love.

Happy Thanksgiving from Anthony Momany, managing partner – Capstone CPA Group