Category: Accounting

On September 30, 2021, Florida’s minimum wage will increase to $10.00 per hour. This is a rise of $1.35 per hour. This increase is the result of an amendment approved by voters to Florida’s Constitution to gradually increase the state’s minimum wage to $15.00 per hour by the year 2026.

Florida Minimum Wage

Employers in both the public and private sectors are required to pay the minimum wage regardless of the size of the company or the number of employees. Under the amendment, the minimum wage will increase by $1.00 per hour on every September 30 through 2026. Beginning in 2027, the minimum wage will be adjusted annually for inflation, as it has been since 2004. Below is the scheduled for the increases:

• $11.00 on September 30, 2022
• $12.00 on September 30, 2023
• $13.00 on September 30, 2024
• $14.00 on September 30, 2025
• $15.00 on September 30, 2026

It should also be noted that beginning on September 30, 2021, that the minimum wage for tipped employees will be increased to $6.98 per hour. Additionally, the minimum wage for tipped employees will be increased annually by $1.00 on September 30 through 2026. The wage for tipped employees will increase as follows:

• $7.98 on September 30, 2022
• $8.98 on September 30, 2023
• $9.98 on September 30, 2024
• $10.98 on September 30, 2025
• $11.98 on September 30, 2026

Federal Contractors Minimum Wage

On April 27, 2021, President Biden issued an Executive Order raising the minimum wage for federal contractors from $10.95 per hour to $15.00 per hour, effective January 30, 2022.

This new minimum wage will be “phased in” on January 30, 2022, starting with new contracts issued on or after this date, and also applying to any existing contract that is subsequently extended or renewed on or after January 30, 2022. Moreover, the President’s Executive Order “strongly encourages”–but does not require–that contracts entered into by federal agencies before January 30, 2022, observe the new $15.00 minimum wage.

Only when the contract is extended or renewed after January 30, 2022, will the $15.00 minimum wage requirement take effect for contracts entered into prior to the effective date. If an option in a contract entered into prior to January 30, 2022, is exercised after this date, then the $15.00 minimum wage requirement will also take effect.

Beginning January 1, 2023 (and annually thereafter), the minimum wage for federal contractors will be adjusted for inflation, and the new minimum wage can never be lower than the one that preceded it. Any adjustments will be published by the Secretary of Labor at least 90 days before any new minimum wage is to take effect.

In addition to preparing for internal wage adjustments, another area that contractors may want to start preparing for early is in their diligence of subcontractors. Contractors will be required to incorporate the higher minimum wage into lower-tier subcontracts, so this requirement will need to be factored into subcontractor selection processes, particularly where the process includes an evaluation of subcontractor pricing for work to be performed in future years.

The Secretary of Labor will issue additional guidance and regulations by November 24, 2021. These regulations will address the implementation and additional requirements of the President’s Executive Order.

If you have any questions on the impact of this proposed legislation on the ERTC, please contact RVG & Company at 954. 233.1767.

The IRS recently issued Tax Tip 2022-62. In this publication the IRS is informing taxpayers that they should open and carefully read any mail from the IRS. During this time of the year, the IRS mails notices to taxpayers regarding their recently filed returns. Notices are sent for a variety of reasons that don’t involve collection, so there’s no need for a taxpayer to panic. 

IRS Correspondence. The IRS will mail a letter or a notice to a taxpayer if there is something wrong with the taxpayer’s return or if the agency needs more information about the return or the person who filed it. The IRS will also send the taxpayer a notice if it changes the taxpayer’s return. In many instances the IRS may be confirming the taxpayer’s identity, or the IRS needs additional information.

If a taxpayer receives mail from the IRS, they should open it and read it carefully.

Do Not Ignore Mail from the IRS. Taxpayers should never disregard mail from the IRS. The notice or letter will explain why the IRS is contacting the taxpayer and will outline the action the taxpayer needs to take. 

Do Not Panic. Taxpayers should read the notice or letter carefully and follow the included instructions. For example, if the IRS changed the taxpayer’s return, the taxpayer should compare the information in the notice or letter with the information on their filed return. Generally, if the taxpayer agrees with the changes the IRS made, they don’t need to contact the IRS. 

Timely Respond to the Notice or Letter. A taxpayer should promptly respond to any notice or letter from the IRS that requires a response. By responding quickly, the taxpayer will:

1. avoid delays in processing their tax return.
2. minimize any additional interest and penalty charges.
3. preserve their rights to appeal changes they don’t agree with.

Amount Due Notices. If a taxpayer receives a balance-due notice, the taxpayer should pay as much as they can, even if they can’t pay the full amount due. The IRS has several ways to pay, and most taxpayers should be able to use the self-help tools on IRS.gov to set up a payment plan. Taxpayers can pay online or apply online for a payment agreement – including installment agreements and Offers in Compromise.

Keep a Copy of any IRS Correspondence. Taxpayers should keep a copy of all notices or letters with other tax records.

When calling the IRS. If a taxpayer must contact the IRS by phone, they should use the phone number in the upper right-hand corner of the notice. The taxpayer should have a copy of their tax return and the notice or letter when calling.

Typically, taxpayers only need to contact the IRS if: 

• they don’t agree with the changes the IRS made to their return,
• the IRS requests additional information from the taxpayer, or 
• the taxpayer has a balance due and can’t pay.

Taxpayers can also write to the agency at the address on the notice or letter. Taxpayer replies are worked on a first-come, first-served basis and will be processed based on the date the IRS receives it. Also, remember that the IRS will not contact taxpayers by phone, therefore do not provide personal information (or tax information) to anyone calling that claims to be the IRS.

If you need assistance with an IRS notice, please contact one of the tax experts at RVG & Company to assist you at 954. 233.1767.