IRS audit focus on worker classification

Major tax deadlines

 

Welcome to Craft, Noble and Company's e-news update. Now that half of the fiscal year is over, here's the most current news.  If you would prefer to receive a print copy of each quarterly e-newsletter, please call our office to place that request.

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Nobody in business wants an unhappy customer, but when a customer complains, think of it as three opportunities in one:

An opportunity to get free feedback on something that’s not working right in your organization.

An opportunity to convert a disgruntled customer into a loyal customer.

An opportunity to head off negative publicity as the complainer shares his gripe with others.

How do you turn a complaint to your advantage? Here are the four steps you need to take.

Automatically enrolling new employees into a company’s 401(k) plan was made easier by the Pension Protection Act of 2006. A survey of 5,490 plans by Plansponsor, a Connecticut research firm, revealed that about 25% of companies now have automatic enrollment in their plans.

The good news about automatic enrollment is that it gets workers to start saving. The not-so-good news is that the rate of saving is often below the rate these employees would have chosen on their own. Trusting to automatic savings to build an adequate retirement fund is unwise; employees need to realize that they must take responsibility for themselves and increase savings levels if necessary.

1. The initial response.
The initial response to a complaint should be respectful and helpful, not defensive or “it’s not our fault.”

2. Understanding the complaint.
Make sure you really understand the true complaint. This is perhaps the most important part of the process. By allowing the customer to vent, you’ll defuse a large part of the hostility and ill will. Also, this step provides valuable feedback to pinpoint the exact problem and find out exactly what went wrong.

3. Fixing the problem.
Employees must know clearly who has the responsibility and the authority to fix a problem. You may choose to compensate the customer for inconvenience, but at a minimum, you must remedy the customer’s immediate concern.

4. The follow-up.
A supervisor or higher-level manager should always follow up with the customer to make sure that the problem has been resolved. This is a key step in turning the customer from “disgruntled” back to “loyal.”

For assistance with this or any of your business concerns, please contact Craft, Noble & Company.



With gas prices soaring, the IRS has responded to numerous requests to increase the standard mileage deduction for business driving.

For the final six months of 2008, the standard mileage rate for business driving has been raised to 58.5¢ per mile. The rate for business miles driven from January 1, 2008, through June 30, 2008, remains at 50.5¢ per mile. (The IRS also increased the deductible rate for medical and moving mileage for the last six months of 2008 to 27¢ a mile. For the first six months of 2008, the rate is 19¢ a mile.)

The IRS adjusts the standard mileage rates for business driving annually, but when driving costs rise dramatically during the year, the Service may consider a midyear change. Rates are based on annual fixed and variable costs of operating a car. A study by the National Federation of Independent Businesses determined that the cost of energy is ranked as the second most troubling problem for small businesses this year.

Minimum Wage
The federal minimum wage increased from $5.85 an hour to $6.55 an hour, effective July 24, 2008.

This increase is part of a three-stage increase in the federal minimum wage mandated by the Small Business and Work Opportunity Act of 2007. The first increase took place July 24, 2007, raising the then-current rate of $5.15 an hour to $5.85. This was the first increase in the minimum wage since 1997.

The next and final step in the minimum wage increase takes place next year when, effective July 24, 2009, the federal minimum wage will go to $7.25.

Note that many states already have a minimum wage higher than the federal required rate. Please contact
Craft, Noble & Company if we can assist you further. We are here to help.

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