June-July 2014
Your
Success
is our Business
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Ten Ideas for Better Brainstorming A Quick Fix for Workplace Problems No End to Sexual Harassment Claims Home Improvement Write-offs for Medical Reasons Tax Calendar Firm Happenings Expanding our Knowledge to Serve you Better
Want to know more? Your Faw Casson advisor is available to answer any questions or concerns you may have. Please don’t hesitate to give us a call.
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DOVER, DELAWARE
REHOBOTH BEACH, DELAWARE
OCEAN CITY, MARYLAND
302-674-4305
302-226-1919
410-213-8700
June—July 2014
Your
Success
is our Business
Ten Ideas for Better Brainstorming Are you looking to boost your business income? Although brainstorming might lead to that “million dollar idea,” it can also be a waste of time. Here are 10 ideas to improve productivity. 1. Choose a moderator. It is important to designate one person to guide the process. Otherwise, it is easy to get off track or out of control. Choose an authoritative figure who knows the project well, but who will not be overbearing—it might be you. 2. Identify the goals. Begin the agenda with a clear and concise explanation of your mission. Again, if you don’t set some parameters at the outset, you are likely to waste a lot of valuable time. 3. Get outside input. When you are constructing the team, add someone you might not normally include. This outsider can bring a fresh perspective to the mix. Fill out the roster with free thinkers and those who have close associations to the project. 4. Limit the time. Do not let brainstorming turn into a never-ending story. Set specific times for sessions and a deadline for meeting goals. This will help ensure that the team stays on track. Conversely, when it is appropriate, you might extend a session if ideas are flowing. 5. Keep good records. It may slow things down, but remember to keep notes during your brainstorming meetings. Every idea, whether it is good or bad, should be written down. Do not rely on your memory to bail you out. Provide as many details as the process will allow. Brainstorming sessions encourage creativity, 6. Do not pass judgment. Initially, you should strive for new ideas, and can generate fresh quantity over quality. Instead of shooting down an idea, perspectives to solve problems and enhance discuss it and then move on to the next one. If someteamwork. one is discouraged from speaking up, productivity may suffer. 7. Think outside the box. If there was ever a time to embrace the unusual, this is it. Encourage team members to be open to the possibilities, no matter how outlandish they may seem. You may be surprised to find that practical solutions may evolve from impractical suggestions. 8. Encourage individuality. Do not allow your team to be drawn into a herd mentality. The moderator must watch for an overabundance of consensus thinking and steer the discussions accordingly. If appropriate, play the “devil’s advocate.” 9. Narrow the focus. The moderator should help funnel general ideas into more specific concepts. This means beginning with a “scattergun approach” that might be all over the place and ending up with a laser beam dedicated to a single thought. If it is practical, break into smaller teams when an idea crystallizes. 10. Aim for synergy. As you begin to winnow ideas, apply them to your company’s overall scheme. There could be a potential for creating some synergy within your operation or within the suggestions you have generated. When one idea dovetails with another, put them together. None of these suggestions guarantees success, but implementing them should improve the chances. Learn from your mistakes, and build on the positives. 2
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A Quick Fix for Workplace Problems Even if you know you are “in the right,� or you have been wronged by another party, it may not be in your best interest to pursue time-consuming legal action. One widely used method to resolve such issues is called alternative dispute resolution (ADR). In particular, ADR is now being used to resolve disputes arising from recently enacted employment laws. The two most common forms are mediation and arbitration. 1. Mediation is an informal settlement conference. The mediator attempts to find a compromise that all parties can accept. If mediation is unsuccessful, parties can then proceed to arbitration. 2. Arbitration is essentially an informal trial before an arbitrator (usually an attorney). His or her ruling may be taken to court where, unless it is found arbitrary or counter to the law, it can be confirmed by a judicial order. Why is ADR being used in employment cases? Years ago, the U.S. Supreme Court required an employee to settle an age discrimination claim after he agreed in writing to submit to ADR. Following that decision, the Supreme Court upheld the use of ADR in a sexual harassment lawsuit. Subsequently, ADR has been used to resolve disputes involving the Americans with Disabilities Act of 1990 and other laws relating to employment.
Many companies are using alternative dispute resolution as a way to resolve workplace issues without going through the court systems. Could this method work for your company?
How does an employer take advantage of ADR? With the assistance of a qualified attorney, the appropriate language can be inserted in the employee handbook. The text should describe the company’s primary use of ADR to settle employment disputes. Similar provisions may be included in all employment contracts.
Caution: The use of ADR can differ from state to state. Some parts of the country have well-established ADR programs using retired judges as arbitrators. In other parts, trade groups have established ADR programs. ADR services are provided in most areas by the American Arbitration Association. If your company is large enough, you may want to use in-house ADR before the dispute is sent to an outside arbitrator. This arbitration can range from a corporate ombudsman to panels consisting of peers of the aggrieved employee and managers. A hearing before a peer review panel, although not binding on anyone, can serve as a safety valve. If the panel finds the company at fault, the company can take quick action to rectify the situation before things get out of hand. Of course, there is a time and place for going to court. But ADR may provide an alternative that appeals to both employers and employees. Make sure to explore all viable alternatives.
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No End to Sexual Harassment Claims According to a recent poll cited in the Wall Street Journal, 46% of women believe they have experienced sex discrimination in the workplace. And the number of sexual harassment claims filed with the Equal Employment Opportunity Commission (EEOC) in 2011 totaled 7,521. What does this show? Employers should not be fooled into dismissing or ignoring the potential for sexual harassment claims. The problem simply is not going away, at least not anytime soon. Be aware that there are two basic types of sexual harassment claims. “Quid pro quo harassment” occurs when employment decisions are determined by whether or not a person submits to sexual advances or demands. “Environmental harassment” represents unwelcome sexual conduct that creates an intimidating or offensive work environment. According to the EEOC, a single incident or isolated incidents of offensive behavior generally do not create a hostile environment unless the conduct is severe. Although both types of harassment have been recognized as being actionable by the courts, environmental harassment is generally more difficult to prove. An allegation of sexual harassment is strengthened if the complaint is contemporaneous. Note: The EEOC considers a complaint to be contemporaneous even if the worker does not notify the employer about the unwelcome conduct until the worker quits his or her job. Once the company receives notice of a complaint, it should investigate the situation, even if the employee did not communicate displeasure at the time of the alleged harassment. Is the employer automatically liable for a supervisor’s actions? No. Each case is decided on its own merits. Nevertheless, the EEOC guidelines provide that an employer will be held responsible for the unreasonable acts of its employees, regardless of whether the acts were authorized or forbidden and whether the employer knew, or should have known, of the occurrence. How does an employer determine whether the behavior is reasonable or not? This can be difficult. For instance, there may not be any witnesses to the alleged event (or series of events) or the witnesses could be biased. In some cases, the complaining worker may be accused of encouraging the conduct. In others, the employee may have “played along” out of fear or intimidation. To avoid potential problems, employers should maintain an environment free of sexual harassment. In the event a claim occurs, follow these steps: Obtain a specific description of the event from both parties. Ask for the names of any witnesses. Collect all the other relevant facts (e.g., how long the conduct has been going on and whether the alleged victim has shown disapproval). Keep records of the meetings. Find out what course of action the alleged victim is seeking. Check to make sure that unwanted conduct has stopped. When it is appropriate, respond with action. Finally, try to educate all employees about sexual harassment issues. If your company has not yet established a grievance procedure for complaints, it should do so promptly. Spell out the policy in the company manual. 4
In this case, it is far better to be safe than sorry. Do not think that sexual harassment cannot occur at your business. Take the necessary precautions to protect your interests.
Seeking Tax Shelter for Medically Related Home Improvements Can you claim a tax deduction for a home improvement? It is not as crazy as it sounds. It may be possible to write off part of the cost of a home improvement needed for medical reasons. However, be forewarned that there are significant tax obstacles to overcome. Background: Under current law, your annual deduction for medical and dental expenses is limited to the amount of unreimbursed qualified expenses exceeding 10% of your adjusted gross income (AGI). Prior to 2013, the limit was 7.5% of your AGI for all taxpayers, but the 7.5%-of-AGI threshold has been retained through 2016 only for individuals age 65 or older. Regardless of your age, it is critical to count every last medical expense that may help you clear the return. To qualify as a deductible medical expense, the cost must be incurred primarily for the prevention or alleviation of a physical or mental defect or illness. Conversely, an expense that is merely beneficial to your general health or well-being is not deductible. For example, if you build an inground pool in your backyard for your children’s pleasure, no deduction is allowed—even though it provides a location for valuable exercise.
Does a pool help your arthritis? A air conditioner ease your asthma symptoms? Home improvements that have a positive affect on medical conditions may be deductible. Contact us today to review the specifics of your situation.
On the other hand, you can deduct a portion of the cost attributable to a swimming pool if you or your spouse will be using the pool to alleviate arthritis or some other specific illness. For a medically necessary improvement made by a homeowner, the deductible amount is equal to the cost above the resulting increase in the home’s value. In addition, annual maintenance costs qualify for the deduction. The full cost of any qualified improvements, plus maintenance costs, is deductible by tenants.
Some other common examples of home improvements that may be deductible as medical expenses are air conditioning installed to alleviate a child’s asthma, an elevator constructed for an adult with a heart condition and special modifications for a disabled person. It is generally recommended that you obtain a written appraisal from an independent real estate expert establishing the increase in your home’s value due to the home improvement. Also, if a physician prescribes a home improvement to alleviate a medical condition, be sure to retain a written copy of the statement. This is only a general overview of a potential medical deduction for home improvements. Tax benefits may be realized in certain other respects. Consult your tax adviser concerning your personal situation.
Firm Happenings Faw Casson had a wonderful time supporting the Central DE Chamber of Commerce during their Honorary Mayor reveal skit. Pictured are Tammy Ordway as the rescued results-auditor with her security detail played by Jennings Hastings, Brian Stetina, and Andrew Tobias.
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Expanding
OUR KNOWLEDGE TO SERVE YOU
better.
We pride ourselves on staying up to date on regulations and updates, and in turn, being able to provide you with proactive advice and solutions. Below is a listing of continuing education courses our staff have completed in the past 2 months. DATE OF COURSE
PARTICIPANTS
OFFICE
SPONSOR
Alison Houck
Rehoboth
AICPA
April 25
Matthew Bossle
Ocean City
IMA
April 29
Janis Nesterak
Dover
AICPA
GAQC 2014 Annual Update
May 13
Kimberly Fonda Jennings Hastings Janis Nesterak
Dover Dover Dover
PICPA
AICPA Peer Review Program Advanced Course
James Arthur
Dover
AICPA
Kimberly Fonda Thomas Healey Alison Houck Janis Nesterak
Dover Ocean City Rehoboth Dover
AICPA
Accounting Standards Update 2nd Quarter
Jennings Hastings Lisa Hastings Janis Nesterak Brian Stetina
Dover
AGN
North American Regional Meeting
Andrew Tobias
Dover
MACPA
Employee Benefit Plan Conference
March 19
May 13-15 May 14
May 18-21
May 19
NAME OF COURSE Regional Meeting Let's Get Fiscal - Federal Budget
Employee Benefit Plans Conference
DID YOU KNOW‌. Generally, you can deduct the cost of business education if the courses maintain or improve skills needed in your current job. But you cannot deduct any expenses if the education qualifies you for a new trade or business. In a new case, the Tax Court said a taxpayer who claimed to work in pharmaceutical sales could not deduct the cost of an MBA program. Reason: He was not established in a business before enrolling in the program, so the MBA degree qualified him for a new line of work.
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TAX CALENDAR CAUTION – If you deposit taxes through the Electronic Funds Transfer System, you may need to make deposits on or before the prior banking business day. JUNE 2
Delaware Franchise Tax - Limited Partnerships and Limited Liability Companies
JUNE 10
Form 4070 - Employee Tip Reporting to employers
JUNE 16
Estimated Taxes - Calendar Year 2014: Corporation - Federal, Delaware and Maryland Individual - Federal, Delaware and Maryland Monthly Payroll Tax deposits - Federal, Delaware and Maryland S Corporations – Non-Resident Tax Maryland and Delaware Partnerships – Non-Resident Tax Maryland Individuals - last day for U.S. citizens working outside the U.S. and Puerto Rico (or on military duty) to file Form 1040 and pay any owed Tax, Interest and Penalties. Combat Zone Participants may get further extension.
JUNE 20
Delaware Gross Receipts tax for monthly filers Maryland Sales and Use Tax return
JUNE 27
All offices of Faw Casson will be closed
JUNE 30
Report of Foreign Bank and Financial Accounts (Treasury Form TDF 90-22.1)
JULY 1
Delaware Foreign Corporation’s Annual Report Special Tax Registration and Return - Alcohol and Tobacco (Form ATF F 5630.5). (Any seller of alcohol or tobacco must file this annual return).
JULY 4
All offices of Faw Casson will be closed in observance of Independence Day.
JULY 10
Form 4070 - Employee Tip Reporting to employers
JULY 15
Monthly Payroll Tax deposits - Federal, Delaware and Maryland Maryland 2nd Quarter Payroll Tax deposit
JULY 21
Delaware Gross Receipts tax for monthly filers Maryland Sales and Use Tax return
JULY 31
2014 Quarter 2 Payroll Returns: Federal (Form 941), Delaware (UC-8), Maryland (DLLR/DUI) Federal Tax deposit for Federal FUTA tax (Form 940): Deposit if cumulative liability is => $500 for the quarter/year to date Quarterly Return and Deposit of Excise Taxes Delaware Gross Receipts tax for monthly filers Pensions, Profit Sharing, Stock-Bonus or other Employee Benefit Plans that use a Calendar Year must file Previous Year Tax return (Form 5500 series)
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