For All The Small Businesses That Have Employees

To All My Valued Employees,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn’t pose a threat to your job.

What does threaten your job however, is the changing political landscape in this country. Of course, as your employer, I am forbidden to tell you whom to vote for – it is against the law to discriminate based on political affiliation, race, creed, religion, etc.

Please vote for who you think will serve your interests the best. However, let me tell you some little tidbits of fact which might help you decide what is in your best interest. First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business
owner there is a back story.

This back story is often neglected and overshadowed by what you see and hear.  Sure, you see me park my Mercedes outside.  You saw my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up some idealized thoughts about my life. However, what you don’t see is the
back story.

I started this company 12 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living space was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn’t have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting Nordstrom’s for the latest hot fashion item, I was trolling through the
Goodwill store extracting any clothing item that didn’t look like it was birthed in the 70′s.

My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business — with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9 am, mentally check in at about noon, and then leave at 5 pm, I don’t. There is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself.  I unfortunately do not have the freedom.  I eat, ****, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to me like a 1 day old baby.

You, of course, only see the fruits of that garden — the nice house, the Mercedes, the vacations… You never realize the back story and the sacrifices I’ve made. Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail out all the people who

The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for. Yes, business ownership has its benefits but the price I’ve paid is steep and not without wounds. Unfortunately, the cost of running this business, and employing you, is
starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don’t pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what?   I have to
pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes.  You know what my “stimulus” check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check?

Obviously, government feels the latter is the economic stimulus of this country. The fact is, if I deducted (Read: Stole) 50% of your paycheck you’d quit and you wouldn’t work here. I mean, why should you? That’s nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your
job is in jeopardy. Here is what many of you don’t understand .. to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn’t need to pay taxes, guess what?   Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don’t defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart?   Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the mud of America are the essential drivers of the American economic engine.

Nothing could be further from the truth and this is the type of change you can keep. So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers.   You can then plead with the government to pay for your mortgage, your SUV, and your child’s future. Frankly, it isn’t my problem anymore. Then, I will close this company down, move to another country, and retire.

You see, I’m done. I’m done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

While tax cuts to 95% of America sounds great on paper, don’t forget the back story: If there is no job, there is no income to tax. A tax cut on zero dollars is zero. So, when you make decision to vote, ask yourself, who understands the economics of business ownership and who doesn’t? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of saving your job. While the media wants to tell you “It’s the economy Stupid” I’m telling you it isn’t.

If you lose your job, it won’t be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the Constitution, and will have changed its landscape forever. If that happens, you can find me in the South Caribbean sitting on a beach, retired, and with no
employees to worry about.

Signed, Your boss

The author:  Michael A. Crowley, PE is the owner of  Crowley & Associates, Inc. and was President and an owner of Crowley, Crisp & Associates, Inc. and Michael A. Crowley, PC.  As President of Crowley & Associates, Inc., Mike is a lead designer of water supply, treatment and storage projects, regional sewage
lift station design, and residential and commercial site development projects and is responsible for the management of the firm. Mike’s industry background includes over 20 years experience in the civil engineering field inclusive of executive level responsibilities in Marketing and Project Management.

Prior to founding Michael A. Crowley, PC, Mike held positions with several engineering firms in North Carolina and Maine.  Mike holds a B.S. Degree in Civil Engineering from University of Maine and a Master of Business Administration from Boston College.  Mike is a member of the American Water Works Association (AWWA) and holds professional registrations in North Carolina, South Carolina, Virginia, Maryland, Arkansas, Texas, Arizona, New Mexico, Indiana, Maine, Tennessee, Australia, and Trinidad & Tobago, West Indies.  Mike is a native of  Norridgewock, Maine.  The Crowley family resides in Wake Forest.

Let’s Write Off Your Summer Cruise

And you thought this couldn’t be done…

When you know the rules, it’s easy to travel to a business meeting by cruise ship rather than by airplane or other mode of transportation. 

The law provides various ways for you to deduct a cruise. Let’s   examine just one: a trip to St. Thomas in the Virgin Islands and let’s say   you live in California or New York. 

IRS Regulation 1.274-4 gives us two one-owner business friendly rules that we can use to our benefit:

  1. The United States means the 50 states and the District of Columbia

  3. Transportation cost to a foreign destination for seven days or less, excluding the day of departure, is not subject to an allocation between business and personal days

St. Thomas is outside the 50 states; accordingly, it’s a foreign destination. You are subject to the foreign travel rules on your trip   to the business meeting or convention in St. Thomas.
  You plan to fly to Miami, Florida, and then board a cruise ship that will   take five days to arrive at St. Thomas.
  Once you arrive at St. Thomas on day five of your trip, you will

  1. Depart the ship

  3. Check in for a two-night stay at the hotel where the convention or meeting is being        held

  5. Attend the convention or meeting after sleeping at the hotel for the first night

  7. Depart by airplane for Miami on the day after the convention or meeting

Your business tax deductions include the cost of:

  1. Travel to Miami

  3. Cruise ship fare to St. Thomas (not to exceed tax law’s luxury boat limits that range in 2012 from a low of $620 to $734 per day, depending on the dates of travel)

  5. Food and lodging in St. Thomas

  7. Airfare to Miami

  9. Travel from Miami to home

Note that you have no personal, nondeductible expenses for   this trip to St. Thomas. You have to admit, tax knowledge can be fun. 
 Thanks again to W. Murray Bradford, CPA and Publisher of the Tax Reduction Letter 

It’s Time To Hire a Daily Money Manager

The following article is a reprint of Erica Sangberg’s submission on Yahoo! Fnance.

Precisely Right Accounting now offers personal money management. You’re going to love this!

Overweight? Hire a personal trainer.  Dirty house? Call a cleaning service. But to whom do you turn to get a grip on overspending  and debt? A daily money manager can come to your rescue. 

What‘s a daily money manager?   As the title implies, daily money managers (DMMs) assume a client’s basic  yet often irksome financial duties.  “Generally speaking, we manage the personal administrative and financial business  of individuals, families and seniors,” says Alison Salisbury, founder and owner of Fiscally Fit, a Palo Alto, Calif., daily money management service provider. Specifically, they do everything  people tend to avoid, including: 

  •   Sorting mail.
  •   Creating paper and digital financial  file systems.
  •   Setting up Quicken or Quickbooks and  training clients to use the software.
  •   Paying bills.
  •   Reconciling accounts.
  •   Producing cash flow reports.
  •   Establishing budgets and spending plans.
  •   Resolving creditor disputes.

  Sound good? It gets better. They work on  your schedule and some daily money managers even make house calls.  

DMMs  help you delete debt   If a haphazard (or nonexistent) cash  and credit plan is your main reason for overcharging, a daily money manager can be particularly  useful. Their job is to shed light on payment and budgetary problems — and do much of the hard work to establish a clear spending plan. 

  According to Vivian M. Wright, a daily money manager and president of the Atlanta-based Common Sense Solutions , DMMs dig  deep into their client’s transactions to track where money is being spent and  whether it’s  coming from checking, savings or  credit card accounts. “Analyzing spending and following guidelines for each  category of spending avoids debt,” says Wright.  

  Since daily money managers quickly become  attuned to a person’s financial habits, they can  pinpoint trouble spots and offer solutions to keep borrowing in  check. “I work with my clients to learn to live within their means and  not to have to rely on  credit cards at all,” says Salisbury. “Several of my  clients have stopped using credit cards entirely since working with me.” 

  Daily money managers also take on laborious but  important tasks such as  consolidating accounts. So rather than you being on the phone for hours,  they’ll make the calls to transfer high interest credit card balances to those with lower rates, and  then prioritize them for the most-efficient  debt deletion. They’ll also develop spreadsheets that will map out how long it will take to pay  down each card, keeping you on track and motivated.  

  More, DMMs can even identify fraudulent  liabilities. Wright recalls a client who was inadvertently paying someone  else’s credit card bill. “Our system of accounting allowed us to see very  quickly what was happening and perform the forensic accounting for the civil  law suit  against the individual.”  

Get  out and stay out: your role in the goal   Achieving a positive net worth is one  thing, but remaining that way is another. Sometimes, a daily money manager’s findings can be enough to  instigate change.  

  “Most of the people I work with who  have overspending issues are not aware of the severity of the problem until  they see a cash flow  report that shows their spending over time,” says Salisbury. “I let the numbers  speak for themselves, and once my client recovers from the initial shock, we  discuss the numbers and how they got that way. From there we talk about  what the client would like to see, and do some goal setting.”  

  For formidable issues like compulsive  debting, a daily money manager might take a more creative and authoritarian approach. “One of  my clients has a serious shopping addiction and just couldn’t stop using her credit  cards,” says Salisbury. “I finally put them all in a Ziploc bag which I  then filled with water and put in the freezer . She was aghast, and said, ‘now I won’t be able to use them!,’ to which I replied, ‘but you can use them  anytime you want. You’ll just have to wait until they thaw to get to them,’  giving her time to think about what she was about to do.”  

  Ultimately, though, it’s up to the  client to change unhealthy ways, says Louann A. Webber, president and professional daily money manager for Your Money Inc., an Arlington, Va., direct money management company. “We try to give  them the information to show they are overspending, but we are not the money police. We  can’t control a person who is determined to spend, but we have found that presenting  information in a form that is understandable and not overwhelming goes a long  way.” 

DMMs  can save your marriage   Fighting about finances with your spouse?  The odds are in your favor.  According to a 2012 American Institute of CPAs survey ,  American couples average three money arguments per month. As an objective  professional, a daily money manager can smooth over relations with a plan that suits each  person’s needs and desires.  

  “Because I’m a third party, couples  often find it easier to talk about money than when they’re together by  themselves,” says Salisbury “I’m not a therapist, but I am a good  listener. I’m a great believer that everyone just wants to be heard.” And  once the person is understood, the daily money manager can develop a suitable budget and may  even suggest helpful resources. For example, says Salisbury, “with one couple,  I shared Barbara Stanny’s book ‘Overcoming  Underearning.’ They  did all the exercises in the book and discovered a lot about their individual  values and beliefs about money, which helped them understand each other without  judgment.” 

  Of course, even the best efforts of a daily money manager can  fall short if one or both of you are not willing to adjust. Wright recalls a  married couple with a young child who wanted to get ahead but, even after  receiving her advice, could not stop shopping for unaffordable luxuries. “Their  inability to manage their cash flow led to a divorce. The husband came for  help and cooperated fully; the wife unfortunately was unable to commit to the  plan, so the efforts were unsuccessful.”  

How  to choose the right DMM   As with bringing anyone into your  private affairs, check credentials. “First, go to the American Association of  Daily Money Managers website and look for a DMM in your area who is certified as a PDMM” (professional daily money manager),  says Webber. “That means a daily  money manager has passed a certification  process that  includes an exam and minimum hours of experience.”  

  Then meet with a few before you decide.  “Most DMMs will grant an initial phone interview for no charge, giving both the  client and the daily money manager an opportunity to determine if the shoe fits on both feet,  so to speak,” says Wright.  

  As for rates, most daily money managers charge between  $75 to $100 per hour. The more complicated your situation is, the more you can  expect to pay. Therefore, if you also need assistance with such complex matters  as Medicare and Social Security, be prepared for steeper fees.  

  Ultimately, says Salisbury, you need to  find someone with whom you can be absolutely honest, especially about  debt. “Many of my clients feel they are the worst money managers ever, and  are filled with embarrassment or shame. A big part of my job is to help them  overcome those feelings and develop a positive attitude about moving  forward.”

How to Deduct The Thurston County Chamber Golf Tourney

Are you capturing your double deductions? Do you have the following line items set out in your chart of accounts?

  1. 100% business entertainment      deductions
  2. Regular 50% business      entertainment deductions

If not, and if you attend or participate in charitable sporting events, you are missing valuable deductions because you are giving your tax preparer only one category for entertainment. Worse yet, you might be deducting the charity events as charitable deductions. Yikes!

Example 1. You buy two tickets to the local Thurston County Chamber’s golf outing. On the day of the golf outing, you collect your business colleague and the two of you have breakfast at the outing. Over breakfast, you and the colleague discuss new ways of getting more prospects for your businesses. This gives you a business meeting, and now the golf outing qualifies as business entertainment associated with the breakfast discussion. With proper documentation of the cost and business discussion, the entertainment cost of this golf outing qualifies for the 100% deduction.

Example 2. Everything is the same as in example 1—breakfast discussion and all—but you go as a spectator to a PGA TOUR event that gives 100% of its net proceeds to 501(c)(3) charities. Your cost of the PGA TOUR event is 100% deductible.

Example 3. Everything is the same as in example 1. The charity sends you a note saying that the fair value of your golf, food, etc., is equal to the amount you paid and you have no charity tax deduction. Smile. You have no problem. The fair value limitation does not apply to business entertainment. Thus, like in example 1, you deduct everything.

You might ask me: Where does the law say that I can do this? Internal Revenue Code Section 274(l)(1)(B) says that the 50% cut in a business entertainment deduction shall not apply to any ticket for any sports event

  1. which is organized for      the primary purpose of benefiting an organization which is described in      section 501(c)(3) and exempt from tax under section 501(a),
  2. all of the net proceeds      of which are contributed to such organization, and
  3. which utilizes volunteers      for substantially all of the work performed in carrying out such event.

Events that use volunteers for substantially all the work and donate the net proceeds to charity include, among others: GOLF!

~ W. Murray Bradford, CPA

Yes, You Can Deduct Your Golf Lessons

Spring is here (ok, almost) and the links are calling your name.  Thank you, W. Murray Bradfor, CPA for this great tip on saving my small business owner friends money on those all important golf lessons.

The golf lessons improve the business skills you need in your prospecting.

You are somewhat like Tracey Topping, who used her equestrian events as the  marketing muscle for her barn and home design business. The court allowed her to deduct the cost of her equestrian trainers. Topping needed the trainers so that she could win events and have her name announced over the loudspeakers as the rider of the winning horse.

You are also somewhat like the air traffic controllers who won education deductions for private pilot certification courses, aircraft rentals, and flying lessons, as this education improved their air traffic skills.

Alan Aaronson won an education deduction for his flying lessons because he proved that being able to fly improved his abilities as a news photographer.

How do you get this deduction? The first thing you need to assert is how those golf lessons improve your prospecting. For example, your improved play

  • might help you gain access to new and different prospects.
  • may give you more business prestige and standing with the prospect group you currently access (thereby improving business).
  • might simply keep you as you are, thereby maintaining the skill that you need in your business prospecting.

Next, you need to allocate the cost of the golf lessons to three possible categories, as follows:

1. Personal nondeductible golf (which you said is 10 out of the 40 times you will play golf, or 25%)
2. 100% deductible charity event golf (if you participate in such charity events)
3. Regular business entertainment golf (which you said is 30 out of the 40 times you will play golf)

What is an IRS Enrolled Agent?

What is an Enrolled Agent?

An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.

What does the term “Enrolled Agent” mean?

“Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS.  Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS.  The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.

How does one become an Enrolled Agent?

The license is earned in one of two ways, by passing a comprehensive examination which covers all aspects of the tax code, or having worked at the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations.  All candidates are subjected to a rigorous background check conducted by the IRS.

How can Enrolled Agent help me?

Enrolled Agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements.  Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS.

Privilege and the Enrolled Agent

The IRS Restructuring and Reform Act of 1998 allow federally authorized practitioners (those bound by the Department of Treasury’s Circular 230 regulations) a limited client privilege.  This privilege allows confidentiality between the taxpayer and the Enrolled Agent under certain conditions.  The privilege applies to situations in which the taxpayer is being represented in cases involving audits and collection matters.  It is not applicable to the preparation and filing of a tax return.  This privilege does not apply to state tax matters, although a number of states have an accountant-client privilege.

Are Enrolled Agents required to take continuing professional education?

In addition to the stringent testing and application process, the IRS requires Enrolled Agents to complete 72 hours of continuing professional education, reported every three years, to maintain their Enrolled Agent status.  NAEA members are obligated to complete 90 hours per three year reporting period.  Because of the knowledge necessary to become an Enrolled Agent and the requirements to maintain the license, there are only about 46,000 practicing Enrolled Agents.

What are the differences between Enrolled Agents and other tax professionals?

Only Enrolled Agents are required to demonstrate to the IRS their competence in matters of taxation before they may represent a taxpayer before the IRS.  Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all Enrolled Agents specialize in taxation.  Enrolled Agents are the only taxpayer representatives who receive their right to practice from the U.S. government (CPAs and attorneys are licensed by the states).

Reasons to file your tax return

You are required to file a federal income tax return if your income is above a certain level, which varies depending on your filing status, age and the type of income you receive. However, the Internal Revenue Service reminds taxpayers that some people should file even if they aren’t required to because they may get a refund if they had taxes withheld or they may qualify for refundable credits.

To find out if you need to file, check the Individuals section of the IRS website at or consult the instructions for Form 1040, 1040A or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.

3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.

5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.

6. Health Coverage Tax Credit Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.

Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.

Thanks to Colonial Tax for their timely information.

QuickBooks Quicktune Now Available

If you use QuickBooks, and are getting ready to send your file to your accountant, I have a money saving offer. Using the information below, contact Precisely Right Bookkeeping for a “quicktune”.

For $100 I will review and repair (if necessary) your QuickBooks file and make sure it is ready to send to your tax accountant or upload to TurboTax.

As a special bonus, if you choose Precisely right bookkeeping as your tax preparation service $50 will be deducted from the price of your tax return.

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Special Offer for QuickBooks users

The Log on Mileage Logs

What’s the point in keeping a mileage log?

Ahh! Good question!

And, I have a good answer:   Because your total business deduction may just be greater $$$ than using the standard IRS mileage rate; especially if you’ve had car repairs or have recently purchased a new vehicle for business purposes.

The website has a great example:  Susan is a self employed interior designer. She started her business January 1, 2010 and began using her 2007 Toyota for business purposes at the same time. Her total mileage at year end was 10,000 miles, of which 8,000 miles were for business (8,000 /10,000=80%). Susan charged all her car expenses to one credit card (good tax tip!), so she knows exactly what they were; they add up to a total of $5,775, including depreciation expense. Susan also keeps a mileage log. To calculate her business car deduction using the Actual Expense Method, Susan calculates:

Total Actual Car Expenses x 80% = $5,775 x .80 = $4,620

Susan is curious what figure she would get if she used the standard IRS mileage rate instead of the standard IRS mileage deduction:

Total business miles x 2010 IRS Mileage Rate =   8,000 x .50 = $4,000

Because Susan had kept good records and had included all her actual expense receipts, her car deduction is higher by $600 using actual car expenses. She is in the 27% tax bracket and pays self employment tax (15.3%). This means that her tax savings using the actual expense method vs. using the standard IRS mileage rate is approximately $250.

If you’re in the Lacey/Olympia/Tumwater area and need a mileage log, please let me know and I will send you one free of charge. They’re great quality, preprinted booklets and fit just right in the center console of your car.

Best wishes for the greatest New Year!

WA State Unemployment Tax Rates DROP!

From the Employment Security Department website:

OLYMPIA – Gov. Chris Gregoire’s unemployment tax and workers’ compensation reform bills from last legislative session continue to help businesses through a down economy by causing next year’s unemployment tax rates to drop and keeping workers’ compensation rates flat into 2012.

Eighty-eight percent of Washington’s businesses will pay a lower unemployment tax rate in 2012 than they pay today. This decrease will save businesses an estimated $207 million in 2012 – in addition to $300 million in 2011 savings. Overall workers’ compensation insurance rates will not increase, which will save businesses an estimated $150 million in 2012.

When Gregoire signed her unemployment tax reform bill in February 2011, the Employment Security Division estimated that businesses would save more than $300 million in 2011. Today, it was clear that her reform’s effectiveness far surpassed initial expectations:
• Updated estimates indicate that businesses will save more than $500 million in the two-year period — $300 million in 2011 and $207 million in 2012.
• 88 percent of Washington’s employers will pay lower unemployment tax rates in 2012 than what they pay now.
• The overall average unemployment tax rate will drop by 13 percent.
• For the 77,338 employers that have had no layoffs in the past four years, the tax rate will plummet by 71 percent.