Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
DOL Compliance Audits
In the last several months, many of our clients with Service Contract Act (SCA) contracts have been audited by DOL Investigators from the Wage and Hour Division. These auditors are part of the expanded enforcement that occurred as a result of the American Recovery & Reinvestment Act.
They usually begin with auditing employee and contractor records, before moving on to personal interviews with employees. They are looking for Contract Work Hours and Safety Standards Act irregularities as well as FLSA and Service Contract Act violations. It is critical that companies pay the minimum wage rates and fringe benefits as listed in their respective wage determinations. In addition, record keeping should be up to date and verify the aforementioned, including your health and welfare reconciliations.
It is important to remember that employee wages and fringe benefits should not be combined. This is especially true when fringe benefits are paid in cash. Your records should verify the wages and fringe benefits are distinct, in the event an investigator asks for them.
Surprising as it may seem, some contractors are not aware they have a SCA contract until an audit takes place. At that point, fines are assessed and payments of back wages become due. In some instances, the Contracting Officer can ask to withhold funds that were destined for payments to the contractor, if there is a potential risk of default.
The best remedy to handle these audits is to have your appropriate personnel properly trained in the fundamentals of the SCA and how to handle DOL audits. In many cases we can assist a contractor with these audits, but it is imperative that we have good facts to build a prima facie case.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe benefit obligations and provides your employees with valuable benefits.
An Invaluable App
A recent article in the Boston Globe, entitled “Boston’s Brightest Pick their Top Apps”, peaked our curiosity. While we all have read countless articles and downloaded oodles of apps, there might be one more you should consider. It’s called MyHome Scr.APP.book.
After reading that Joseph Murphy, the state’s Commissioner of Insurance recommended the app, we not only downloaded it but began using it. We found it to be one of the best and easiest ways to take inventory of household possessions. It even includes a preparedness section with various insurance tips.
MyHome Scr.APP.book is great for determining how much insurance you really need and cataloging your possessions in the event you need to file a claim. If you’re like us, you don’t think about taking a picture of your washing machine or jotting down the serial number until something happens and your homeowner’s insurance company is looking for the information. With MyHome Scr.APP.book, you simply walk through your home and enter names, purchase dates, prices, and serial numbers of your most valuable possessions.
Developed for the National Association of Insurance Commissioners (NAIC), the software links to your smartphone camera so you can easily attach a snapshot of each item. Once your list is complete, you can email or export the list to a safe location on the internet.
Cataloguing the contents of your home can be tedious and time consuming. It always seems to be on the list of things to do next week, though next week never seems to come. While no one wants to think about filing a claim, especially those that aren’t prepared, you can get prepared and organized with the help of MyHome Scr.APP.book. Best of all, it’s free and easy to use.
Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines departement will work with you to evaluate your insurance needs, identify exposures and create a customized insurance portfolio. Give us a call today at 617-723-0700.
Tax Filing Deadline
As the countdown to April 15 continues, it’s likely that you’re knee-deep in receipts, canceled checks, brokerage statements and other financial records that your tax advisor will need to prepare your individual income tax return. Having organized records — and knowing when to keep or discard them — can ease the pain of tax season.
Managing Your Tax Records
Maintaining accurate and up-to-date financial records is critical to determining your tax liability. Carefully review your records at least once a year and discard what’s no longer necessary or relevant. Here are some guidelines for managing specific records:
Tax-related documents. Keep tax-related documents, such as receipts that support your deductions, for at least three years after you file your original return. Why? Because the IRS typically has three years from the date you file — including extensions — to audit you. (If you omit more than 25% of the amount of your gross income stated in your tax return, the statute of limitations can extend to six years.)
There’s no time limit if you fail to file a return (or file a fraudulent return). So permanently keep a copy of tax returns for a longer period of time (10 years or more) as evidence that you filed.
Save W-2 forms until you start receiving Social Security benefits to serve as a record of your work history and earnings. Your annual statement from Social Security will show your earnings history per their records.
Property records. Hold on to closing documents from a property sale or purchase, as well as receipts from home improvements or from money you invested in the property, for at least six years. If you’ve owned your home or other real estate for longer than that time, keep your tax return and records relating to any improvements dating from when you purchased the property so you can document your adjusted basis in it.
Investment account statements. Keep investment statements until you receive your year-end statement and confirm that it reflects your transactions for the year. Save trade confirmations that show the purchase and sale of mutual funds and stocks for three years after you report the capital gain or loss on your tax return.
Checking account and credit card statements. If your checking and credit card statements include deductible expenses, retain them for a minimum of three years after you file.
Utility bills. Keep these documents for a minimum of three years if you need them to support a home office or rental property deduction.
Pay stubs. Retain these until you’ve reconciled the totals with your Form W-2.
Organizing and Storing Records Safely
The IRS requires you to maintain the fundamental accounting records needed to file and support an acceptable tax return, including documents that reconcile differences between your accounting records and your return, to avoid penalties. This would apply to your individual tax return if you have a sole proprietorship or a single member LLC reported on Schedule C.
Are you able to easily locate all of your important financial records? Create a record keeping system that organizes important documents so that you can readily access them.
Maintain copies of these records at home, and keep the originals in a safe deposit box or other secure place in another location. You also may store records electronically so long as your computer storage system meets IRS security and retrieval standards.
Getting a Jump on Next Tax Season
April 15 may be only weeks away, but it’s never too late to begin organizing your financial records. Doing so will help you stand up to IRS scrutiny, ward off costly penalties and alleviate some tax-related stress.
At Cleary, we are committed to a holistic approach of protecting and preserving our clients’ financial assets. Give us a call today at 617-723-0700 and let us know how we can help you.