Is your business using part-time workers?

Recent job statistics indicate that more employers are using part-timers to deal with variations in workload and for short-term projects. Here are a few tips your business will find useful if you hire part-time workers.

* Communicate clearly with the part-timer. Explain the person’s duties, the hours and benefits, and the individual to whom the part-timer will report.

* Tell your full-time staff why you’re hiring the part-timer. Make it clear what that person will and won’t be expected to do.

* Provide introductory training for the part-time worker. Assign someone the new person can turn to with everyday questions.

* Monitor the part-timer’s progress. Provide feedback on performance and recognition for doing a good job.

Pay attention to these points if you want hiring part-time workers to be a good choice for your company.

Review your credit policies

There are many ways to make your business more profitable, and sound credit policies are high on the list. The current slowdown in the economy is a good reason to reexamine your company’s policies. Keep the following items in mind as you review your policies.

* Don’t be so eager to sign on new customers that you neglect to check out their credit history. Take the time to check references, and obtain a credit report to see how they’ve handled other financial transactions.

* Establish collection policies and follow up promptly on delinquent accounts. The more overdue accounts become, the more likely they are to become uncollectable. That cuts into your profits.

* Calculate what it costs to carry credit for your customers. For example, if your business generates $1,000 per day in credit sales, and it takes you an average of 60 days to collect, your cost of providing credit to your customers is $3,000 per year. This example assumes you can borrow money at 5% interest. By speeding up the average collection to 30 days, you cut your carrying costs by half.

* To speed collections, invoice customers when you ship the goods; don’t wait until the end of the month. Make sure your invoice clearly shows your payment terms, including penalties for late payment and the discount, if any, for prompt payment.

* Be aware of the payment cycles for your industry. For example, if contractors typically pay their bills by the 10th of the month, make sure your invoices arrive in plenty of time for them to process your payment.

Call us if you’d like to review your credit policies.

You may have a deduction for moving expenses

If you moved in 2014 because of a new job location, you may be entitled to a tax deduction for your moving expenses. To qualify for a tax deduction, your new job location must be fifty miles further from your old home than the distance from your old home to your old job. In other words, if your commute would be increased by fifty miles or more from your old house, you have met the distance test.

In addition to the distance test, you must meet a length-of-employment and commencement-of-work test. During the twelve months following the move, you must have been employed full time for at least 39 weeks. Self-employed people have slightly different rules. The work test is waived if you have certain family or job misfortunes.

For details on the rules for deducting moving expenses, give our office a call.

Women and retirement

Women need to save more for their retirement than men do. Statistics show that women live longer than men, but earn less than men during their working years (which are often fewer due to time taken off for child rearing). According to the Census Bureau, 57% of the population over age 65 are women, and 70% of older people living in poverty are women.

Retirement and taxes

If you continue working past age 70, you can still add to a 401(k) or Roth IRA, but not to a traditional IRA. At age 70½, you must start withdrawing from a traditional IRA, and unless you’re still working, from a 401(k) plan. There is no age requirement for starting withdrawals from a Roth IRA.

Age matters in the world of taxes

Are you aware of the numerous age-related provisions in the IRS code? They are probably more plentiful and significant than you thought. Here are a few examples of the age-related tax rules that could affect you and your dependents.

* At birth up to age 19 and even 24: dependency deduction. Parents can claim a dependency exemption for a child under 19 or for full-time students under the age of 24.

* Under 13: child care credit. This provision gives parents a tax credit for dependent care expenses.

* Under 17: child tax credit. If parental adjusted gross income is below a threshold level, parents can claim a child tax credit of $1,000.

* At 50: retirement contributions. The government allows extra “catch up” contributions to retirement savings. This is a helpful provision to encourage savings.

* Before age 59½: early withdrawal penalty. Withdrawals from IRAs and qualified retirement plans, with some exceptions, are assessed a 10% penalty tax.

* At 65: increased standard deduction. Uncle Sam grants a higher standard deduction, but there’s no additional tax benefit if the taxpayer itemizes deductions.

* At 70½: mandated IRA withdrawals. The IRS requires minimum distributions from a taxpayer’s IRA beginning at this age (doesn’t apply to Roth IRAs). This starts to limit tax-deferral benefits.

Awareness of how the tax code affects you and your family at different ages is important. For tax planning assistance through the various phases of life, give our office a call.