TABS TALK: September 2022

As usual in our bi-monthly digital business update, we have collected interesting topics relevant to your U.S. subsidiary, such as information about taxes, legislation, HR matters, and more.

Tax News

Corporate Income Tax (CIT) Filing Deadline Approaching

If you requested a tax extension for your CIT 2021 last April, your tax return will be due on October 17, 2022. State income tax due dates typically follow the federal deadline.

New Sales and Use Tax Rates in CA Operative October 1, 2022

The state of California approved tax rate changes. The new tax rates, tax codes, and expiration dates will be available to view and download as a spreadsheet on September 1, 2022, on the webpage California City & County Sales & Use Tax Rates. To find the specific tax rate for your area or business location go to Find a Sales and Use Tax Rate by Address. The new rates will be displayed on October 1, 2022.

Be aware that there are over 11000 sales tax jurisdictions in the U.S. and in general Sales Tax rates are often changing. Contact our Tax team if you need assistance with your Sales Tax administration.

End of Year Tax Preparations

It’s not too early to begin preparing for next year’s tax season. You should note that the first deadline is January 31, 2023. This is the date by which your employees need to be provided with their W-2’s and contractors or vendors to whom you have paid more than $600 need to be provided with 1099’s. For this you will not only need their tax ID. but also their updated. address information. If you don’t currently have this information, you should begin to request it as soon as possible; in our experience some contractors or vendors are slow to respond and may need to be pursued at length before you receive the required information. Failure to timely file a 1099 can result in penalties.

If you would like additional information or assistance with completing the CIT or 1099s and filing the corresponding 1096 with the IRS, or if you have other tax related question, please contact our tax support officers.

Health Insurance Premium Deductible Hikes

Many small group employers can expect to see double-digit percentage increases for premiums in 2023. According to this article, the average price increase is at 10%, with some insurers requesting increases up to 20%.

Though TABS’ HR team has already seen several notices from insurance carriers requesting premium rate changes upwards of 19% in New York, it ultimately depends on the State’s Department of Financial Services to approve these requests, also further explained in this article for New York-based employers*.

According to this article, Connecticut employers may see even higher premium increases. Ultimately, premium increases depend on several factors, including industry performance, group performance and usage, as well as market performance. These factors may also differ by state. On the other hand, an increasing number of employees see the importance of getting affordable insurance benefits offered by their employers, as inflation continues to affect their budget. Below graph from KKF shows how fast insurance costs increase compared to employees’ wages over time.

Now may be the time to reevaluate your plan offerings. TABS’ HR Team is happy to assist you with any questions or reviews of your benefits. Together with our partner brokers, we can find the best solution for your group of employees. Whether it be a change of plans offered, a switch of insurance carriers, a PEO, or a switch to an Individual Healthcare Arrangement, we are here to assist you further. Contact us!

*It is important to note that these percentages do not reflect the rate increase your company may see upon renewal. As mentioned, premium increases are based on several factors.

Equity To Attract Employees In The U.S.

Trying to find new ways to attract talent for your U.S. business? Equity is a great way to keep your employees motivated. However, when you are a foreign company expanding to the U.S., there are more complexities to consider. What should you think about when you are looking to give your U.S. employees equity?

This article by Wilson Sonsini Goodrich & Rosati, one of our business partners, thoroughly delves into all aspects to consider, giving you and your business the knowledge to build a flexible equity compensation plan and deal with these overseas issues if and when they arise.

What Makes a Dutch Venture In The U.S. Successful?

Most entrepreneurs are aware of the cultural differences between the U.S. and the Netherlands but don’t pay much attention to them until they start doing business in the U.S. and things don’t go as planned.

Did you know that 70% of the foreign companies that fail to successfully do business in the U.S. fail because of lack of communication and lack of intercultural understanding?

For her Dutch American Connection Podcast series about what makes a Dutch venture in the U.S. successful, our business partner Annette van der Feltz interviewed Floor Bergshoeff, Business Developer at TABS. Listen to their conversation about Floor’s year-long research project on Dutch Ventures in the U.S. Floor describes what makes a Dutch venture in the U.S. successful, how to pitch to your American partner or investor, how Dutch and American marketing strategies differ, and the secret to managing U.S. employees – to name a few of the many tips and tricks shared in this podcast.

Listen to their podcast here

The Importance of Networking

Do you spend enough time networking in the U.S.? Networking is an important part of American business culture. Foreign entrepreneurs spend a significant amount of time networking in the U.S. and state this to be fundamental for their success in the U.S. market.

Americans are in general freer to exchange their ideas and trust other people more easily than Europeans do. Our research showed that entrepreneurs felt that in the U.S. people are more willing to connect, exchange ideas and introduce them to other business partners or business opportunities. So always say yes to a networking opportunity!

Download our full market report to find out more about U.S. business culture.

Compliments of TABS Inc. – a member of the EACCNY.