Painting Pressures: House Painting Has Worries

Running a house painting business is a great way to make money even during a downturn in the economy; many homeowners and business owners alike are looking for ways to spruce up a building rather than sell it – or seeking to attract buyers and business.  If you enjoy physical labor in the outdoors, house painting is a great option.  House painting is not a solo proposition.  In order to be efficient the painting company will need employees.  With employees come responsibilities for the employer, namely insurance and employee taxes.  Figuring out what insurance to provide and what taxes to pay will keep your business moving and out of any entanglements.


House painting is a physical job that takes place in an uncontrolled environment.  Work is often performed on a ladder with the added burdens of equipment, fumes, and weather conditions.  There is the possibility of serious injury or even death when painting homes.  Purchasing workers’ compensation insurance will provide a financial safety net for your company.  Workers’ compensation insurance covers employees injured on the job.  The insurance will pay for wages lost, medical bills, and rehabilitation bills.  In exchange for workers’ compensation the employee agrees not to sue the employer for damages.  Every state except Texas requires workers’ compensation insurance.  There are informational websites available that will point out specifics in each state.  Shopping for workers’ compensation insurance is as easy as browsing online or looking in the phonebook.  There are 12 states that hold their own workers’ compensation fund.  This is the best way to provide a safety net for your company’s assets.  It also signals to employees that you are serious about their welfare.


Tax issues are tricky for small businesses.  Doing taxes the right way from the start will save a lot of money and headaches later on.  The first thing that a new business needs is an Employer Identification Number through the IRS.  The business needs to withhold certain taxes from every employee paycheck: Federal income tax, Social Security and Medicare, and Federal Unemployment Tax.  Federal income tax is determined from the information on an employee’s W-4 form.  Both the employee and the employer will contribute for Social Security and Medicare.  Currently, they contribute 6.2% each for Social Security and 1.45% each for Medicare.  Employers will pay a Federal Unemployment Tax for any worker that has been fired.  Having a professional look over your taxes is the best solution for any small business, as taxes can get tricky.


When people plan on starting a house painting business they need to be aware of the technical issues that deal directly with employees.  Employees want to be taken care of both physically and monetarily.  Before starting your business make sure you have workers’ compensation and payroll taxes taken care of by calling PCG for the best quotes and most competitive rates in the industry. Since we work with dozens of providers you are always assured of getting the perfect fit for your needs.



A Closer Look at Electricians…

Many electricians dream of staring a small business, but they need to understand how to lay the groundwork and make the best use of scarce resources. If the proper foundation is not put in place the business can fail especially during tough economic times.


One of the most important but least understood aspects of starting a business is Worker Compensation. Workers’ compensation insurance will pay employees who get injured on the job.  The only state in the United States that doesn’t require workers’ compensation is Texas.  Employers can purchase the insurance from companies that carry it, while a select number of states have a government run fund.  Make sure to look into the details of your states regulations or speak to a PCG rep for more information about the specifics for your state. Workers’ compensation will typically pay for any medical expenses, rehabilitation expenses, and lost wages due to injury.


Taxes for small businesses can be confusing, but figuring them out beforehand is necessary to avoiding any problems.  It is recommended that every business get professional tax help from either an accountant or a computer program.  If you are the sole employee in the company you will have to pay self-employment tax.  This includes estimated payments every quarter.  You will also have to pay a larger portion of Social Security and Medicare because you are the employer as well as the employee.  If you have other employees it is necessary to withhold money for Federal income tax, Social Security and Medicare, and possibly unemployment tax.  Employers also share contributions to both Social Security and Medicare.


Setting up payroll is a big process.  It also involves a lot from the above tax plan.  Your tax part of payroll included getting an Employer Identification Number and having employees fill out W-4 forms to figure out any withholding.  To complete payroll you will need to set up a payment schedule, figure out overtime and other benefits, and set up vacation and sick time.  Companies usually pay on a set schedule of weekly, bi-weekly, or monthly checks.  The IRS has withholding charts available to calculate tax based on payment schedules.  There are also state regulations on overtime pay that you need to check.  Once you figure out payroll it is time to send in your payments to the IRS.  There are professional payroll companies that handle all of the work for you and PCG specializes in finding the best company perfect for small business owners and contractors just like yourself.


Figuring out workers’ compensation and payroll, including taxes, will be one of the bigger foundational moves for your electrical company.  These are steps that most small business owners don’t find pleasant, but they are necessary.  There are professionals available to help in each area, so don’t hesitate to get what you need to bring you through the process.


Top Trends to Watch for 2009

Savvy small business owners should be keeping a close eye on upcoming changes. Here to help keep you prepared and informed are the Top Trends to watch for 2009.

1.      Tighter Credit Lines. Even if you have great credit and make all your payments on time, banks might reduce your credit line or increase interest rates for reasons as erroneous as having the wrong business partner or working in a high risk industry. If you rely upon credit cards or other credit lines to do business, begin increasing your debt-to-income ratio and keep some ‘wiggle room’ available just in case.

2.      Higher Taxes. Taxes, taxes and more taxes are likely to be coming down the pipelines as state, local and federal budget deficits attempt to make up the difference. Everything from higher payroll taxes to increased workers compensation premiums are likely to grow faster than the rate of inflation.

3.      Tougher Regulations. One way the government makes money is to enforce stiff penalties in response to tougher regulations; expect state and local municipalities, federal agencies and other oversight bodies to investigate and penalize infractions much more aggressively than in the past.

4.      Inflation. The cost of goods and services has been rising and is likely to continue to do so well into 2009. So far, the cost of raw materials, transportation and other expenditures hasn’t been passed on to the consumer – yet. However, with an official CPI of 5 percent and a PPI of over 8 percent it won’t be long until inflation rears its ugly head across the board.

5.      Bankruptcy. Some small business owners simply won’t make it through the tough times. Make a point of not allowing your business partners and sub-contractors to hurt your business; keep an eye on payments, work and other measures to make sure partners remain viable and healthy. If in doubt – ask or make alternative plans so their financial problems don’t becomes yours.

Small business owners are faced with numerous challenges for 2009 but one way to stay lean and mean even during touch economic times is through the strategic use of PEO services and competitive workers compensation rates. Contact a PCG staff to learn how we can save you time and money.


Big Changes Coming in 2009

Big Changes Coming in 2009

As the last few months of 2008 wind down, savvy business owners should begin preparing for big changes coming in 2009. Not only will the nation see a new President take office but corporations and business owners of all sizes are likely to begin feeling increased pressure due to these tough trends:

1.      A rough economy. The stock market has dropped by over 30 percent in recent months leading to growing consumer uncertainty and cuts in purchasing power. Business leaders are taking note and expect to dramatically reduce inventory as well as hiring after the holidays. Small business owners should begin preparing now by using outsourced labor and payroll services rather than keeping long term employees in-house. Bottom line: get lean and mean while you still can.

2.      Tax shortfalls. Slowing business isn’t good news for Uncle Sam – after all these big bail-outs they need more money than ever and that means more taxes from the companies still in business. One way to collect taxes when sales are down is to redefine what constitutes an employee. Confused about what constitutes an Independent Contractor? Find out for sure by speaking with a PCG staff member today. Mistakes are likely to cost you more than you realize as the IRS, Department of Labor, Workers Comp offices and other state and federal entities combine forces to “crack down” on violations.

3.      Restriction on Safe Harbor Guidelines. Many industries – including construction – rely upon the “norms” for each industry when determining worker classification and other benefits. Recently proposed legislation is slated to severely limit or even eliminate safe harbor guidelines in the near future. Should this provision be put into effect, small business owners will be hard pressed to implement changes fast enough to stay out of trouble. Find out how to position your company to ride the coming changes without increasing your cost or risk – in fact, you may be able to substantially reduce your expenses for payroll, workers compensation premiums or other insurance needs by utilizing PEO and other benefit programs provided by the PCG brokers. Unlike other vendors, PCG doesn’t just represent one or two options – instead, we act like a broker to find you the best fit at the best possible price. It’s fast, friendly and free since our fees are paid directly by the program after placement.  For more information visit and sign-up for our blog while you are at it!


Taxing Small Business Owners Above $250,000

Taxing Small Business Owners Above $250,000

If Democrats have their way Obama’s small business tax plan will go into effect whether he wins the Presidential nomination or not; what Joe the Plumber has come to know is likely to impact every small to mid-sized company in the nation. If you are a little confused about the exact details then don’t worry – you aren’t alone. The fact is, there is still a lot of work to be done but it works something like this…

1.      If you own a small business that pays you more than $250,000 per year then your personal income would go up in the form of increased FICA and/or Social Security amounts above the current limit. This would not impact your earnings from investments or other sources of profit – only income taxes.

2.      If you own a business that makes a profit of $250,000 or more annually then it will also get taxed at a higher rate than currently; the exact level of tax increases is still open to debate with estimates ranging from 28 percent to 38 percent. Where the actual rate will end up is purely speculation at this point. Keep in mind, the government is anxious to make-up major deficit spending by increasing taxes whatever manner possible.

3.      Taxes on health benefits and other employee provided options is also on the table thanks to McCain’s proposals. Big bail-outs have led to near desperation as the government tries to support a sagging economy without throwing the nation into a recession. Either way, employees will bring home less of their paycheck and expect small business owners to make up the difference.

So, should small business owners prepare for the worst? Yes and no. Chances are changes are coming down the pipeline no matter who makes it into office this week. On the other hand, changes won’t be immediate and there is likely to be a work-around for almost any scenario. One of the main considerations is to remain flexible and keep your options open in order to streamline costs while still growing your business in any situation.  

As the government attempts to make-up for deficit spending and huge bail-out plans don’t be surprised to encounter more taxation rather than less. Reduce your costs now while the option is available; later you might find it more difficult to eliminate excess workers or reduce expenses.





Are Your Workers Employees or Contractors?

Many small business owners really aren’t sure whether or not their workers are employees or contractors. In fact, some contractors would be surprised to learn they actually are considered employees by government standards; unfortunately, even the most well intentioned small business owners could be at risk for costly lawsuits by making even a simple mistake when it comes to properly classifying workers. Here to help determine whether your worker is an employee or contractor are a few of the factors the government uses to distinguish between the two…just keep in mind, there are no less than a half dozen different laws each with different requirements so this is just a general guideline.

1.      Control. Contractors are typically in control of how work is performed, when it is performed and other specifications. They operate independently of your business and utilize their own discretion in critical questions related to quality, scheduling and other major decisions.

Independence. Contractors have a large degree of independence and latitude when it comes to their work. Outside of meeting the specifications of the contract, they also typically work for themselves

1.      as evidenced by billing, other clients, business license, training programs etc…

2.      Risk. Contractors bear their own legal risk as well as reward in relation to work performed.

3.      Delegation. Contractors can delegate work unless specifically prohibited by the original contract – workers cannot delegate and are typically responsible for their own work.

4.      Tools and Equipment. Contractors typically provide their own tools, equipment and training with the exception of specified or proprietary materials related directly to the project at hand (and which remain in the ownership and control of the employer).

Make sure your small business understands how to properly classify workers; better yet, let someone else handle it all for you at a fraction of the cost and time required to do it yourself. Remember, it’s completely tax deductible and allows you the extra time required to grow your business during these tough economic times.


Obama Likely to Bring Big Changes to Small Business

By the time you are reading this the nation will have selected a new President. Whether you voted for Obama or not, one lasting legacy he will certainly have upon the small business landscape is the pending legislation known as the Obama-Durbin Independent Classification Act or ICPCA.

The ICPCA is expected to pass into law by the overwhelmingly Democratic congress early next year in response to a growing trend toward “cracking down’ on business owners using Independent Contractors rather than full-time workers. While the bill does not limit the use of IC’s, it does poise severe penalties against business owners that misclassify a worker as an Independent Contractor rather than employee. It also tightens the definition of IC and makes it easier for workers to report business owners and file official complaints against corporations for back wages, benefits and other compensation.

Not only does the bill make it easier for workers to sue employees for back wages and other compensation but hefty fines at the state and federal level are also expected. To support the ability to investigate potential violations, the IRS has made worker classification enforcement a top priority. Additionally, states are now required to prove how effective their own investigation programs are and enhanced communication between the IRS, Department of Labor and  Workers Compensation makes it easier than ever to file multiple complaints should a company come under investigation.

Since the government itself admits “there is neither a single or simple test used to determine whether  a worker is an independent contractor or employee” it should come as no surprise that small business owner and contractors alike are left confused by the new changes. With hefty penalties and major incentives for workers and government agencies to find the employer at fault, small business owners are increasingly seeking ways to reduce the risk of inadvertent misclassification. One easy and effective method is to use a third party outsourcing company to handle it all for you! Fast, affordable and as risk-free as possible, it is one less worry during these challenging economic times.

Find out how easy it can be to reduce your expenses and eliminate risk by speaking to a friendly PCG representative today. Chances are you small business solutions are right around the corner just waiting for you to fill out a simple form and get back to the business of growing your share of the market.

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