Wednesday, January 30, 2019

Homestead Exemptions

Did you purchase a home in 2018 or have you
never filed a Homestead Exemption?

The Brazos County Homestead Exemption can lower annual property tax rate for owner-occupied homes.

If you're unsure if you have or have not file for the Homestead Exemption you can check online at the Brazos CAD Property Search.
Search for your property by address or by name and look under "Exemptions". "HS - Homestead" should be written in the "Exemptions" box.  If it is not, you should file for a Homestead Exemption.

To get a copy of the Brazos County Homestead Exemption Application, contact the Brazos County Assessor's Office and ask for details on the homestead exemption program or see the below links. Be sure the county appraisal district has the completed application with any required documents by April 30th. 

Credit To: Lacey Hogan, Broker Associate at Keller Williams.

Wednesday, January 23, 2019

Are Your Salaried Employees Truly Exempt?

There are individuals in every workplace in the United States who are paid a salary and considered exempt from pay for overtime after forty hours in a work week. The current threshold for exempt status is $23,660.  This number will likely increase to $31,000 to $33,000 in the near future.  It has been reported that such a proposed rule could be issued in early 2019.
It is imperative that those employees that you classify as exempt from overtime pay are truly properly classified. If overtime is common in your business, the back pay liability could be significant. The liability period can go back three (3) years. In addition, penalties also include liquidated (double) damages and attorney’s fees.
How Does an Employee Qualify as Exempt from Overtime?
To be properly classified as exempt, the person must satisfy the two part, “salary” and “duties”, tests. The person must be paid at or above the required salary level (currently $455 per week) and the duties of the employee must fall within one of the so-called “white collar exemptions”. They are generally referred to as the “executive”, “administrative” and “professional” exemptions.
Executive Exemption
For the “executive” exemption to apply, the person’s primary duties must be management of the enterprise or a customarily recognized department or subdivision thereof. The person must also direct the work of two or more other employees, and have authority to hire or fire employees or have particular weight given to his or her recommendations on employee issues. The most common positions falling under the executive exemption are business owners or managers, department managers, and supervisors.

Administrative Exemption
The “administrative” exemption is the one most commonly used by businesses to classify employees as exempt and also the one most frequently litigated. To qualify, it requires the requisite salary and that the person perform office or non-manual work directly related to the management of the business. In addition, the employee must exercise discretion and independent judgment on significant matters.
The exemption would not apply to an employee responsible for performing duties that involve clerical or secretarial work. Some of the well-recognized exempt administrative positions include human resources personnel, purchasing agents, insurance claim adjusters, office managers, payroll managers and executive assistants to business owners.
Professional Exemption
In considering who qualifies as an exempt professional employee, the DOL recognizes four separate categories: “learned professionals”, “artistic or creative professionals”, “teachers” and employees engaged in the practice of law or medicine. Most businesses will have few, if any employees who qualify as a professional. If they do, such as engineers, the basis for exempt status is usually clear. They will have a college degree or comparable training qualifying them as a professional in their area of expertise.  
Computer Professionals
The DOL also recognizes certain computer professionals as exempt. The FLSA actually has two separate exemptions for these types of employees. In addition to an exemption with the same salary level as that of other categories, $455 per week, there is also an exemption for computer employees who are paid at least $27.63 per hour. The types of employees that qualify for these exemptions are computer system analysists, computer programmers, software engineers and other similarly skilled professional employees.
Outside Sales
The FLSA also provides an exemption for employees engaged in “outside sales” as opposed to inside sales. This exemption must satisfy both a duties and a location test. No specific salary amount is required.
Outside sales employees generally work alone, away from the place of business, have minimal supervision, and normally receive commissions based on their successful sales rather than hours worked. Inside sales personnel are generally not exempt unless they qualify for the “executive” or “administrative” exemptions. These are among the most frequently misclassified employees.
Final Thoughts on the Overtime Exemption
Employers should be cognizant of workplace morale. Simply re-designating previously exempt employees as non-exempt to avoid a salary increase can have serious negative workplace effects. First, it is likely that some employees will view this as a demotion. Second, previously exempt employees could lose work schedule flexibility, benefits that are provided only to exempt employees, and perhaps equally important to many, their perceived status in the workplace. By carefully considering all these factors, you may be able to avoid the misclassification challenges that some employers face when an exempt status is questioned, or a new salary threshold is implemented.    

Friday, January 18, 2019

IRS Waives Penalty for Many Whose Tax Withholding & Estimated Tax Payments Fell Short in 2018

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017.

The updated federal tax withholding tables, released in early 2018, largely reflected the lower tax rates and the increased standard deduction brought about by the new law. This generally meant taxpayers had less tax withheld in 2018 and saw more in their paychecks.

However, the withholding tables couldn't fully factor in other changes, such as the suspension of dependency exemptions and reduced itemized deductions. As a result, some taxpayers could have paid too little tax during the year, if they did not submit a properly-revised W-4 withholding form to their employer or increase their estimated tax payments.

Although most 2018 tax filers are still expected to get refunds, some taxpayers will unexpectedly owe additional tax when they file their returns.

Please check your withholding for 2019. This is especially important for anyone now facing an unexpected tax bill when they file. This is also an important step for those who made withholding adjustments in 2018 or had a major life change to ensure the right tax is still being withheld. Those most at risk of having too little tax withheld from their pay include taxpayers who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with non-wage sources of income and those with complex tax situations.

To help taxpayers get their withholding right in 2019, an updated version of the agency's online Withholding Calculator is now available on

Here are a couple useful resources for anyone interested in learning more about tax reform. They are Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318, Tax Reform What's New for Your Business.