IRS And Labor Law Posters

Labor Law Poster Updates.

Effective January 1, 2016, several states will be increasing their minimum wage rates:

• Alaska Minimum Wage will increase to $9.75

• Arkansas Minimum Wage will increase to $8.00

• California Minimum Wage will increase to $10.00

• Connecticut Minimum Wage will increase to $9.60

• Hawaii Minimum Wage will increase to $8.50

• Michigan Minimum Wage will increase to $8.50

• Nebraska Minimum Wage will increase to $9.00

• Rhode Island Minimum Wage will increase to $9.60

• Vermont Minimum Wage will increase to $9.60

• West Virginia Minimum Wage will increase to $8.75

In addition to the list above, nine states (Arizona, Colorado, Florida, Missouri,Montana, Nevada, Ohio, Oregon, and Washington) will have their minimum wages linked to a consumer price index.

IRS 2016 Business Travel Rate Updates.

The IRS recently updated the per diem rates for business travel starting October 1, 2015 (the start of fiscal year 2016).

Key Items To Note:

• As an alternative to reimbursing employees for expenses they incur while traveling, employers can pay them a per diem amount, or daily allowance, for lodging, meals and incidentals.

• The rates are IRS approved and vary depending on where your employees travel.

• Instead of the usual record keeping requirements for business travel, per diem rates allow you to pay the specified amount to employees without any extensive paperwork.

• The only thing you need to have record of is the time, place and business purpose of the trip.

Starting October 1, 2015:

• Cost of traveling between places of lodging or business, and places where employees dine out are not considered incidental expenses.

• Mailing expenses resulting from filing travel vouchers and paying employer-sponsored charge card billings are not considered incidental expenses.

• The list of high-cost areas has been updated in IRS Notice 2015-63.

• The per diem rate for all high-cost areas within the continental U.S. has increased $16 from its prior rate and is now $275; $207 for lodging and $68 for meals and incidentals.

• The per diem rate for all low-cost areas within the continental U.S. has increased $13 from its prior rate and is now $185; $128 for lodging and $57 for meals and incidentals.

Click here to read IRS Notice 2015-63.

Other Items To Note:

• If you use the high-low method for an employee, you have to keep using it for all business travel reimbursement (within the continental U.S.) for the entire calendar year.

• The per diem rate cannot be paid to individuals who own 10% or more of the business.

• When deducting reimbursed amounts to employees on your company's tax return, you have to treat meals and incidental expenses as a food and beverage expense subject to the 50% deduction limit on meal expenses.

• You have to continue using the same method (per diem or high-low) for an employee's travel reimbursement in the last 3 months of the calendar year that you used during the first 9.

Since the IRS is highly critical of business travel expense reporting, per diem substantiation might be a helpful alternative; especially considering the simplified record keeping requirements.