SIMPLE IRA Set-Up – DEADLINE October 1st.

Deadline is October 1st.

simple-iraIf you are looking to set up a SIMPLE IRA for your business in 2017, the deadline to do so is October 1st.  All new plans must be set up by October 1st to be used and funded in 2017.   Using a SIMPLE IRA will allow you to make both Employee (EE) contributions, along with Employer (ER) contributions.

Contribution Limits:

  • Employee contributions can be up to $12,500 for 2017.  The employer contributions may vary slightly, but would generally be about 3% of wages to all eligible employees.

Deadline to fund the plan.

  • Employee contributions – must be withheld from pay by December 31st and remitted to the investment firm as soon as reasonably possible
  • Employer contribution – must be made by the tax return due date, including extensions

questionsIf you have further questions about the SIMPLE IRA plan set up or options, please reach out to your financial advisor for information on this plan.  

Business by Design does not set up these plans or provide financial advice, however, we do want to be sure you are aware of the deadline.

Minneapolis/St. Paul Sick and Safe Time

The cities of Minneapolis and St. Paul have both passed ordinances requiring employers to adopt Sick and Safe Time leave policies. Both ordinances are set to go into effect on July 1, 2017. Employers in these cities should familiarize themselves with the rules of each ordinance.


What is the effective date of the ordinances?

  • Effective July 1, 2017 – Minneapolis and St. Paul
  • Effective January 1, 2018 – St. Paul Employers with fewer than 24 employees

Who is covered by the new ordinances?

Employees who work within the geographic boundaries of each respective city for at least 80 hours per year.  This applies to employers within the city limits of Minneapolis or St. Paul. Minneapolis also applies its ordinance to employers outside the city limits.

  • The Hennepin County District Court issued a temporary injunction on January 19, 2017, that prohibits enforcing the ordinance against any “employer resident outside the geographical boundaries of the city”. The City of Minneapolis agreed to follow the Court ruling until it is modified or rescinded.

What are the new ordinances?

Required Leave:

Employees can use sick and safe time for a number or reasons, including but not limited to:

  • Their own mental or physical health condition or to receive health care, or to care for a family member for the same purposes
  • For absence due to domestic abuse, sexual assault or stalking of the employee or a family member
  • For the absence due to the closure of the employee’s place of business by order of a public health official to limit exposure to infectious or hazardous materials
  • To accommodate an employee’s need to care for a family member whose school or place of care is closed due to inclement weather, loss of power or other unexpected reasons, or that have been closed by a public health official.

Note: the definition of “family member” extends beyond the immediate family.

Accrual and use of sick and safe time leave:

Although employers can be more generous, both ordinance require that, as a minimum:

  • Employees accrue one hour of sick and safe time for every 30 hours worked, up to a maximum of 48 hours per year. Exempt employees are deemed to work 40 hours by week unless their normal work week is less than 40 hours
  • Employees must be allowed to carry over accrued but unused sick and safe time to the following year. The total amount of accrued but unused safe and sick time need not exceed 80 hours at any time
  • Sick and safe time begins to accrue at the beginning of the employment relationship or the effective date of the respective ordinances, whichever is later.
  • Both ordinances allow employers to satisfy the accrual and carryover by frontloading 48 hours of sick and safe time to an employee, then providing at least 80 hours of earned sick and safe time at the beginning of each subsequent year.
  • Employees may begin using accrued sick and safe time beginning 90 calendar days after they begin their employment.


Is Sick and Safe Time paid or unpaid?


For employers with 6 or more employees, sick and safe time is paid leave. For employers with 5 or fewer employees, such leave can be paid or unpaid, but not both.

St. Paul

Sick and safe time is paid leave for all eligible employees.

Notice to Employees:

Employers will be required to post notices to employees in a conspicuous location at each location where an employee works.  The notice must be in English and the other languages.  Employers who have a handbook must include a notice of employee rights and remedies in the handbook.

More Information:

The information provided here is general information and not inclusive of every rule and requirement of the ordinances. Business by Design does not provide legal or human resources advice and does not provide services for the tracking required for these ordinances. For specific questions about each of the ordinances follow the links below.

Minneapolis Sick and Safe Time Ordinance

St. Paul Sick and Safe Time Ordinance

New Overtime Rules Effective December 1, 2016: How to Comply


In a surprise move, a federal judge in Texas put the brakes on the Department of Labor’s new federal overtime rule, which was scheduled to take effect on Dec. 1. For now, employers may follow the existing overtime rule. For more, click here


The Department of Labor (DOL) has issued final rules that will substantially increase the minimum salary requirement to be exempt from overtime under the Fair Labor Standards Act (FLSA). The final rules are effective December 1, 2016. Here is an overview of the new rules and guidelines to help you prepare.


The FLSA requires covered employers to pay “non-exempt” employees at least the minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek.

“Exempt” Employees:

While most employees are “non-exempt,” the FLSA provides for exemptions from its minimum wage and overtime requirements for certain administrative, professional, executive, outside sales, and computer professional employees. These employees are known as “exempt” employees. To be considered “exempt,” employees must generally satisfy all of these three tests:

  • Salary-level test: Employees must earn a weekly salary that meets the minimum requirements. Until December 1, 2016, the minimum salary requirement is $455 per week for the administrative, professional (including the salaried computer professional), and executive exemptions.
  • Salary-basis test: With very limited exceptions, the employer must pay employees their full salary in any week they perform work, regardless of the quality or quantity of the work.
  • Duties test: The employee’s primary job duties must meet certain criteria.

There is also an exemption for “highly compensated” employees who customarily and regularly perform at least one of the exempt duties or responsibilities of an executive, administrative, or professional employee. Until December 1, 2016, these employees must receive total annual compensation of at least $100,000 to qualify for this exemption.

What Is Changing?

Here is a summary of the final rules, effective December 1, 2016:

  • Salary increase for certain exemptions. The minimum salary requirement for the administrative, professional (including the salaried computer professional), and executive exemptions increases from $455 per week to $913 per week($47,476 annually).
  • Increase for highly compensated employees. The minimum total compensation required for the highly compensated employee exemption will increase to $134,004 per year, which must include at least $913 per week paid on a salary basis.
  • Automatic updates. There will be automatic adjustments to these minimum salary requirements every three years.
  • A portion of certain bonuses count. For the first time, employers may use nondiscretionary bonuses (generally defined as those announced or promised in advance), incentive payments, and commissions, to satisfy up to 10 percent of the minimum salary requirement for the administrative, professional, and executive exemptions, as long as these forms of compensation are paid at least quarterly.

Note: The DOL made no changes to the duties tests for the administrative, professional, executive, highly compensated, computer professional, or outside sales exemptions.

Potential Impact on Exempt Employees:

If your exempt employees earn less than the new salary requirement, they will no longer meet exemption criteria and must be classified as non-exempt and paid overtime whenever they work more than 40 hours in a workweek. An employee who meets all applicable exemption criteria, including the new minimum salary requirement, salary-basis test, and applicable duties test, may continue to be classified as exempt.

Options for Compliance:

If your exempt employees’ salaries fall below the new minimum, you will generally either have to:

  • Raise their salaries to the new requirement (if you elect this option, review employees’ job duties to ensure they continue to qualify for the applicable exemption); or
  • Reclassify the affected employees as non-exempt and pay them overtime whenever they work more than 40 hours in a workweek.

These options are discussed in greater detail below.

Option 1: Raising Salaries

If an employee’s salary is closer to the current minimum ($23,660) and they rarely work overtime, it might make sense to reclassify them as non-exempt. To determine the cost of raising an employee’s salary to the new minimum, simply subtract the employee’s current salary from the new minimum ($47,476).

Note: If you provide your exempt employees with nondiscretionary bonuses, incentive payments or commissions, make sure you factor this in when calculating the potential costs of raising their salaries to meet the new requirement (10 percent of these payments can be used to meet the minimum salary threshold).

Also remember that with the automatic increases, you would need to review and adjust (if necessary) exempt employees’ salaries every three years. If you currently offer regular merit increases, you will need to decide how you will handle those going forward in light of the automatic adjustments.

Option 2: Reclassifying Employees

If exempt employees don’t meet the new salary requirement, you can reclassify them as non-exempt and pay them overtime (1.5 times their regular rate of pay) whenever they work more than 40 hours in a workweek. If your employees rarely work more than 40 hours in a week, you could reclassify them as non-exempt and convert their salary to an hourly wage (divide their weekly salary by 40 hours).

If your employees regularly work more than 40 hours per week, simply converting their salary to an hourly wage would result in a significant increase in costs. However, assuming you have an accurate picture of the hours they work, you could keep your costs the same by accounting for the overtime premium in their new hourly wage. To take this cost-neutral approach, here is a simple formula you can use:

Weekly Salary / [40 hours + (Overtime Hours Worked Per Week x1.5)]

Here’s an example:

An exempt employee’s current salary is $715 per week, the employee regularly works 50 hours per week, and you want to convert this employee to an hourly employee but keep your costs the same. You would calculate the hourly wage as follows:

$715 weekly salary / [40 hours + (10 overtime hours x 1.5)] = $13 hourly rate.

This employee would be paid $13 per hour for the first 40 hours and $19.50 per hour ($13 x 1.5) for each hour of overtime. Remember, whatever hourly rate you decide to pay reclassified employees, it must meet or exceed the highest applicable minimum wage (federal, state, or local).

Notify Employees and Payroll Providers of the Changes:

Make sure to inform your employees of the changes and give them a reasonable amount of time to prepare for the change.

Once you have finalized your option for compliance, make sure to inform your payroll provider of the changes you are making to any employees.


For more information you can read DOL guidance on the new rules here.

A easy way to document your auto mileage…

mileiqDo you have a mileage log?

If you are like me, documenting your auto mileage was always a pain.  Trying to write down the date, miles of each day was nearly impossible.  I know many of our clients have this same experience.   So, I wanted to have an easier way to document my business auto use and protect one the the largest deductions on your tax return.  That is why I have been using MileIQ over the past 18 months.

How does MileIQ work?

MileIQ an app that runs on the background of your phone and tracks your mileage for you.  It have been a great tool for me to use.  Feel free to check it out.  We and get you a 20% discount if you use our promo code listed here:  Mile IQ Discount Code – BBD

Give it a try and see what you think.  I know I would never go back to the “old way” again.

Tax Deadlines – Schedule your appointment now!

DeadlineWelcome to summer of 2015!  We hope you all have a safe and productive summer this year.  However … before we know it summer screams by and a tax deadline will be around the corner.

** We would like to prepare your tax returns in June/July to avoid crunch time.

Your 2014 S corporation or LLC return is due by 9/15/15.  If you file your return after this date, you will incur a penalty of $195.00 per shareholder, per month.

Currently, our deadline for having ALL of your tax information to us, to meet the 9/15/15 filing deadline, will be some time during the week of Monday, August 10th – Friday, August 14, 2015.  Our current deadline is Friday, August 14th (but is subject to change – read below)

BBD Tax appointment deadline:

If you wait to schedule your tax appointment until the week of August 10th, or wait to send us your information that week, we are preparing returns on a first come, first served basis.  Our deadline of guaranteed completion will be determined by you, our client.

We currently have a limited number of open appointments left available for August.  All returns will be prepared based on a first come, first serve basis.  This could mean we will not be able to GUARANTEE your returns will be timely prepared, and will possibly incur the penalties stated above.

Please call us to reserve a time

We strongly encourage you to schedule your appointment now, or send us your tax information as soon as you can.  We cannot stress enough that you should not wait until the week of August 10th, as we may not be able to guarantee completion by the 9/15/15 deadline.  We want to deliver a quality product for you, and be sure we have time to discuss all options for your return to get the best possible outcome.  The sooner we get your information, the better we can serve you.

If you need our tax organizers, please click on this link:   2014 Tax Organizers and Forms

If you would like to set up a time for a tax drop, OR give yourself a “self-imposed” deadline, please hit reply to this email or call us at 952-392-1200.  We look forward to hearing from you soon….