On Dec. 22, Gov. John Kasich signed legislation that clarified the 2013 small business tax statute, assuring that Sub S Corps adopting the PEO model will enjoy the same tax savings as all other Ohio small businesses. GMS took a leadership position in the industry that led to this legislative victory.
In 2013, Ohio business owners became eligible for small business deductions, reducing tax rates down to three percent. It wasn't until August 2016 that a client's tax practitioner noticed the issue on the Ohio Department of Taxation website containing instructions for the small business income deduction. FAQ No. 28 said that Sub S owner's wages paid by a PEO is not subject to the deduction.
The client contacted their Client Services Manager, who in turn contacted GMS's Chief Financial Officer, Mark Watkins. Watkins realized that this was a major issue for all PEO clients who are Sub S Corps in the state.
"Keeping the plates spinning," is an idiom many small businesses use to describe the way they manage their human resource responsibilities. Some outsource HR functions to various companies while some tasks are handled by an in-house team member who has many other job duties
There's no need to juggle between outsourcing tasks to multiple companies and attempting to have them work together on your behalf. Professional employee organizations, or PEOs, can help minimize the stress, time and costly resources you spend administering your HR functions by managing:
For small-or medium-sized businesses, worker's compensation can be extremely costly. You invest a lot of the time, money and resources into claims management to ensure your business stays compliant and your workers are protected. With your limited resources, there are steps you can take to minimize your risks and reduce your worker’s compensation costs.