December 17, 2011
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Comment on sales tax
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Ken
Many estimates especially old style handwritten and generic forms will state does not include any/all applicable taxes, before tax or similar.
I'm not a CPA nor do I work for the IRS but the expectation in most areas is that you are paying taxes. Consumers should always make sure they are aware of if the amount of an estimate includes those taxes or not. If you are giving them an invoice it must include the applicable sales taxes and they typically must be a separate line item. Programs like QuickBooks will do this as their default and do it for you; subtotal, taxes and then total which is all-inclusive.
Subtotal is used to make mention of a total prior to sales tax, s&h or other fees that are not subject to tax. 'Total' would imply all inclusive. Restaurants and other business do show the taxes as it's own line item. If you are in some areas where there are state as well as local taxes you often see multiple line items to explain the tax breakdown.
If your estimate does not include any applicable sales taxes I'd make sure it states the same in the contract spelling everything out!
Jason Etter
AVX Integrated Technologies, Inc.
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Question on C or S corp
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Ken,
My current accountant suggested that we consider changing our corp. status from a "C" corp. to an "S" corp. He said we might save some money by only having to file 1 return. Is there any downside to this move? More exposure?
Thank You,
Dave
Security Alarm
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Answer
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Even an S corp has to file a tax return; there just isn't any income tax on the corporate level. It's taxed as a partnership with all income or losses passing through to the stockholders. A C corp pays taxes on retained income [less permitted deductions]. [not sure if that's called "retained earnings"]. Unless you are a very large company I would say the general rule is elect S corp status.
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Question: Accessing alarm system remotely
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Ken
What if any do your contracts [sales/service/lease etc.] have in the way of provisions allowing the current 'Alarm Company' and or his agent (another alarm company on his behalf) access into the control (fire, burglar, access control etc.)at any time to see the status, make changes and adjustments (additions, deletions, pass codes, clock times, remove central station communications after termination etc.) without recourse to the alarm company and or agent, if any for doings so without getting permission to do so from the customer/subscriber? Please provide as much detail as possible in your response as to what can and cannot be done as well when and if a notice has to be given as well as if permission is it necessary in any form (written or verbal).
SG
Superior Protection
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Answer
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The Standard Form Contracts provide for remote access by the alarm company to the control panel to add or delete programming. Obviously access should be in connection with the contract and the subscriber's interests. Since the contract provides for access no notice would be required.
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More on NJ Workers Comp Insurance
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Dear Ken:
Regarding the Works Comp “ I had a ladder break from under me 28 years ago with close to 250K in surgeries & 2-months hospital stay the 1st time. The Workers Comp is a CHEAP way to insure. I did NOT have to worry about Medical Collection Agencies coming after me during my 18 months of recovery!!!! GET THE INSURANCE!!
Regarding Elevator ADA Compliant Phones are these required from "freight" elevators that post signs that state "FREIGHT ONLY “ NO PASSANGERS"
Happy Holidays!
Joseph Pfefer
Jade Alarm Co.
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Questions
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Ken
Can u please clarify. If you are a 1 man operation the only way to operate without workers comp in NJ and be protected from personal liability, is to be set up as an LLC
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Ken,
Your associate's comments seem to exclude the "principal" owner of a sole proprietorship. Isn't that just what John is? He says that he is the solo business owner with no employees.
Yet there is also the statement that a business owner can file a claim for worker's comp. These two statements are conflicting so I am confused.
Thanks,
Lynn
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Answer
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There is apparently an exception to the Workers Comp Ins requirement if you are a one man business conducting that business in your own or an assumed name; in other words, not as another entity. If you have a corporation, LLC or partnership you need workers comp even if you are the only employee. The original question said he was the owner, which could mean owner of a corporate entity.
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Comment
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Ken
If NJ has a State run Workers Comp Insurance plan, as NY has, then he may save some money there on premiums. In fact, I actually got money back from the plan this year in a refund.
Andy
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More on workers comp
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Comment
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Ken
Workers Compensation / Labor Laws vary from State to State. In general, the easiest way to think about coverage for an owner is an you sue. For instance, an officer is an employee. Thus, a corporate officer can sue the corporation. The same holds true for partners, whether general partners or limited partners; a partner can sue the partnership. However, an individual owner of a sole proprietorship cannot sue himself.
In certain situations, the State laws may permit an officer or a general partner to elect not to be covered by workers compensation insurance. But such election many not relieve the company of liability for an injury or illness.
As one who engages / hires others, the question arises, is are the individuals performing the work covered by workers compensation insurance? This question can, generally, be answered if a) you verify that you are making payment to a company 'not an individual' for services rendered, and b) you verify that the company that you are paying has workers compensation insurance for their employees by having them provide evidence of such.
But that still leaves the question of owners and excluded officers and partners.
However, the question that John asked is why he has to obtain workers compensation insurance coverage when he has no employees. The answer is because he needs to assure that IF he engages someone to do work, if even for a moment, that that individual is covered by workers compensations. How many times has a sole proprietor asked someone to just help him/her out for a moment. As an example can you always pull alarm wire by yourself? Sometimes yes. But there are the situations where you needs someone to help you and you cannot buy the insurance after the injury.
(The information provided above is not to be used as a legal opinion)
David Deutsch
California
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