Holiday Shopping Hope, AICPA Asks for No Tax Info, Accessibility Lawsuits

Hey, everybody, it's Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review podcast. This is where we take some news that impacts your small business in mind, and we talk about it a little bit.

And yes, we are in our fourth week now of the government shutdown. It's almost turning into one of the longest shutdowns ever. It's close approaching that, causing major headaches for a lot of people, federal workers and a lot of small businesses. Hoping that this gets resolved soon, as we are recording this, it is still going on.

But let's turn to some good news. A recent report that just came out this week from software maker Intuit, called the Intuit QuickBooks Holiday Shopping Report, is reporting a potential 25% increase in holiday spending this year. Let me read from the report.

“As the holiday season approaches, small business owners find themselves on the cusp of significant revenue opportunities. U.S. consumers are projected to spend $263 billion this holiday season, marking a remarkable 25% increase from the previous year. The heightened spending presents a $109 billion chance for small businesses as consumers increasingly lean towards local shops, with 41% of their holiday spending designated for small business purchases.”

Now, Intuit conducted the survey of over 6,000 consumers and 1,000 small business owners. Participants expressed that the desire to give gifts to loved ones overshadows concerns about economic pressures like tariffs and inflation. Nearly half of the surveyed consumers reported a willingness to cut back on other expenditures such as dining out and even essentials like groceries to ensure they can provide gifts for their family and friends.

This year's festive spirit is fundamentally about prioritizing joy over economic anxiety, with 42% of respondents stating that giving gifts is more important now than ever.

So, an optimistic view about the upcoming holiday season, let's hope it happens and let's hope that we all take advantage of this. Remember Small Business Saturday is the Saturday after Black Friday, which occurs after Thanksgiving Day. That could be your opportunity to sell more products and get the holiday season off to a great start.

Hey, and before we go any further, let's talk a little bit about your HR and payroll. Quick pause here to share something that could save you some serious time and money. With the rush of holiday sales and perhaps adding seasonal workers to the payroll, it can add more time to your administrative tasks and stress. Did you know that processing payroll can cost an average of $23,940?

Well, Paychex can change that. They handle everything from accurate paychecks to automated tax filings and even on-demand insights all on a super simple platform and lighter budget. It's like having a payroll expert by your side so you can focus on growing your business instead of crunching numbers.

So, you want more information about paychecks? Good. Go and visit paychex.com/meetpaychex. That's P-A-Y-C-H-E-X dot com forward slash M-E-E-T P-A-Y-C-H-E-X. All right, let's get back to the news now.

There's new rules you're probably aware of from earlier this year in the big, beautiful bill regarding no tax on tips and no tax on overtime. Well, the rules themselves sound good, but there are some challenges. And just this past week, the American Institute of Certified Public Accountants issued a letter to the IRS with some concerns. Let me read to you what this said in the letter.

“The AICPA is asking the Internal Revenue Service for additional guidance and safe harbor protections for employees, er, employers and their workers related to how they report tips and overtime on W-2s and other filings in order to qualify for these deductions.”

While the IRS last month released guidelines on the no tax on tips and no tax on overtime rules, including hospitality, beverages and food services, the AICPA's comment letter signals continued uncertainty around how the new rules will be implemented.

According to Scott Klein, who is a senior manager at the AICPA for Tax Policy and Advocacy, he said “Employers and payers are unsure of how to satisfy the information reporting required under these new sections in order for individuals to be eligible for these deductions.”

The AICPA also urged the IRS to accept our recommendations and provide this much needed clarification.

Bottom line is, as an employer, we are now required to break out what we're paying our employees in tips and what we're paying in eligible overtime for this deduction. And right now, the W-2 forms don't accommodate that, and there are still some questions as to what qualifies as this tip income, what qualifies as this overtime deduction income that needs to be clarified.

With the government shutdown as it is, that is also adding to the headaches as the clock ticks to the end of the year. So, the AICPA is saying, hey, listen, make your best efforts. But can we at least get some safe harbor, so if employers don't do this correctly, they're not going to be penalized for doing so.

This just happened last week, so we're waiting to hear back from the IRS in their response to the AICPA letter. So more to come on that.

Finally, in this week's news, there is a really good article, a blog actually, on Shopify.com, which they're calling a small business shakedown. Why thousands of entrepreneurs are getting buried in lawsuits. Well, here's the reason why.

You know, many small business owners have websites that are not in compliance with the Americans with Disabilities Act. When the ADA was signed into law in 1980, it was a watershed moment, according to the blog. Its purpose was to ensure that people with disabilities could fully participate in society, and to this day, the ADA still protects the most vulnerable from discrimination and exclusion. However, in recent years, predatory lawyers have weaponized the law and are using it to harvest settlements at the expense of American small businesses.

The article goes on to say that accessibility is essential for commerce, particularly e-commerce, but vague accessibility compliance standards have left some businesses, small businesses, guessing, making them sitting ducks for lawsuits.

Meanwhile, the interests of consumers with disabilities are rarely served by these profit-moded litigation. In the end, there are no real winners, according to Shopify, except, of course, for the lawyers.

In one report from 2023 by the U.S. Chamber of Commerce Institute for Legal Reform, the organization stated that three decades after the enactment, much ADA litigation has nothing to do with accessibility but, rather, has become characterized by abusive lawsuits run by a small group of lawyers and law firms.

I know this myself. I have been subject, not personally, but clients have been subject to lawsuits on their websites because it's not too hard for an aggressive attorney to find some areas of your website that may not be super compliant with the ADA. Then they send you a letter – a threatening letter – and a lot of small business owners don't know what to do. So, they just turn around and they concede to that, and they pay a settlement. And it's a whole industry for some aggressive attorneys that are out there.

To protect yourself, please talk to your webmaster, talk to your attorney. Spend a little bit of time, go through your website. You know what? Put your website on an AI assistant like ChatGPT or Grok or Gemini or Copilot. Ask your AI assistant to recommend changes to your website that will ensure that you're ADA compliant. Make those changes. I'm sure they're not too difficult. That will avoid any headaches and costs of a lawsuit going forward.

My name is Gene Marks, and you have been watching this week's episode of the Paychex THRIVE Weekend in Review and that is the news that impacts your small business.

By the way, if you need any advice or tips or help in running your business, sign up for our Paychex Thrive newsletter. Go to paychex.com/thrive. Thank you very much for watching and listening. We'll be back with you next week. Maybe the shutdown will be over. Who knows? But we'll be back with you next week with more news that impacts your small business and a few insights to help you navigate your way around that news. We'll see you then.

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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