Or at least will be on December 31st. I actually never was very fond of having to do this anyway. It seemed like a lot of work for very little money for my employee. And honestly, I don't know too many people in payroll that actually have employees using it anymore, at least legitimately. But it seems that a lot of employers and employees like to use it for fraud so they decided to do away with it. What ever the reason this is one duty I am glad payroll is not going to have to do anymore as of Jan 1.
I put the full story on my Facebook discussion page so you can read about it there.
Got to fly today, put in the paypal buttons on the website today so it should be up and running by week's end.
Tuesday, August 17, 2010
Thursday, August 12, 2010
Draft Forms on Tap
I get alot of questions about where I find material. I usually say when you spend as many hours out on the internet as I do you just run into things. But one site I have made a career in the last 15 years or so of studying is http://www.irs.gov/. I used this back when it was a bulletin board and we were requesting pubs in DOS. So I have over the years covered my fair share of the site, especially the parts that relate to payroll. But branching out is always a good thing and so I have done with the IRS site. Which brings me back around to answering questions. I am constantly asked how I know what a new form is going to look like when it has not been released for the general use by the IRS. I answer simply, I look at the draft the IRS puts out for opinions as they are required to do by statutes.
And since draft forms are an area where payroll professionals like to keep ahead of the game knowing what a new form will look like prior to it landing on your desk to complete is the best of policies. And this is where the draft forms section comes in handy.
The IRS puts all forms that it is going to release out on this section and lets everyone and anyone look at them. Right now if you went out there you could see the 2011 Form W-4, the latest version in 2010 of the Form 941X and so on. And with as much changes as forms are getting lately advance copies are nice.
Once the form gets to the draft stage it is usually set in stone for major changes. You can access this area by going to the IRS website...www.irs.gov and clicking on Tax Professionals on the top tool line. Then go down the left side under Tax Professional Topics and see "More Topics" as it is on the second page of topics. Click on this. Then scroll down the topics listed in the center of the page until you get to Draft Tax Forms Picklist. That is where all the forms are. You can review by revision date or by posted date.
Checking out this area of the IRS website is a good practice to get into especially as year end approaches.
And since draft forms are an area where payroll professionals like to keep ahead of the game knowing what a new form will look like prior to it landing on your desk to complete is the best of policies. And this is where the draft forms section comes in handy.
The IRS puts all forms that it is going to release out on this section and lets everyone and anyone look at them. Right now if you went out there you could see the 2011 Form W-4, the latest version in 2010 of the Form 941X and so on. And with as much changes as forms are getting lately advance copies are nice.
Once the form gets to the draft stage it is usually set in stone for major changes. You can access this area by going to the IRS website...www.irs.gov and clicking on Tax Professionals on the top tool line. Then go down the left side under Tax Professional Topics and see "More Topics" as it is on the second page of topics. Click on this. Then scroll down the topics listed in the center of the page until you get to Draft Tax Forms Picklist. That is where all the forms are. You can review by revision date or by posted date.
Checking out this area of the IRS website is a good practice to get into especially as year end approaches.
Wednesday, August 11, 2010
Working on the Blog and Website
I am working on the design of the blog today to bring it more in line with our new website as to logo etc. No real news today in the payroll world. So a good day to work on the designs.
Thanks for stopping by. I should be posting again tomorrow.
Thanks for stopping by. I should be posting again tomorrow.
Tuesday, August 10, 2010
Website is THISSSSS Close!
My fellow payroll professionals: Sorry I missed the blog yesterday. Was under the weather. But back at it today. Just want to give an update on my website. It is now up so you can view it. We are doing the final finishes on it and I should be able to announce it this week.
I will be posting news stories daily or as they come in. I will also be offering an update service so you get the payroll news right to your e-mail inbox. So check us out and sign up when you see the announcement right here on our blog.
You can also follow us on facebook by searching for payroll advisor. We are on twitter as payadvisor. I am also now on LinkedIn.
Our website is at www.thepayrolladvisor.com
Yours in payroll...
I will be posting news stories daily or as they come in. I will also be offering an update service so you get the payroll news right to your e-mail inbox. So check us out and sign up when you see the announcement right here on our blog.
You can also follow us on facebook by searching for payroll advisor. We are on twitter as payadvisor. I am also now on LinkedIn.
Our website is at www.thepayrolladvisor.com
Yours in payroll...
Wednesday, August 4, 2010
The Politics of Independent Contractors
As you know I live in Nevada. There is an article in the Las Vegas Sun today about independent contractors and political campaigns. In part it reads: Senate Majority Leader Harry Reid’s campaign has accused his Republican rival, Sharron Angle, of attempting to skirt tax law by paying her staff as independent contractors instead of employees subject to payroll taxes. Since she filed to run, Angle has paid her staff as consultants and as such has made no payments to the Internal Revenue Service. Although not uncommon for political candidates, the practice could raise legal issues with the IRS if she doesn’t carefully follow the rules dictating when a worker can be classified as an independent contractor.
What I found most fascinating were the comments made about the story. For example one commenter wrote:
So, what's the point?? My wife has worked as an independent contractor for years. It's not illegal. By putting this article in the paper, Harry Reid shows his ignorance of how many small businesses and individual workers handle their taxes.
As a matter of fact, it's a common practice and more convenient for some people to either hire independent contractors or to work as independent contractors.There's absolutely nothing wrong here. This is a non-story.
But whether someone is an independent contractor or an employee is not a matter of "convenience" or "common practice" it is suppose to be a matter of IRS regulations. Right now the GAO is guesstimating that over 30 million workers are misclassified. States are passing legislation right and left to make it more "costly" to misclassify workers and millions of dollars are lost in revenue for SUI etc due to this type of misclassification.
My question here is three-fold. First, If our political candidates don't think enough of our tax laws to follow them when they are not holding an elected office can they still create, and vote on legislation that will help keep the country moving in the right direction which ever direction that may be?
Second, why is it that no one seems to understand the basic rules of independent contractors?
And third, should people who deliberately break tax laws for their own financial gain (remember she doesn't have to pay FICA or SUI or FUTA so the campaign saves thousands of dollars which can be spent on ads and such) be given a chance to run our country? I include all those who hold appointed offices as well. Like paying for Nanny taxes or back income taxes.
Let us know what you think.
What I found most fascinating were the comments made about the story. For example one commenter wrote:
So, what's the point?? My wife has worked as an independent contractor for years. It's not illegal. By putting this article in the paper, Harry Reid shows his ignorance of how many small businesses and individual workers handle their taxes.
As a matter of fact, it's a common practice and more convenient for some people to either hire independent contractors or to work as independent contractors.There's absolutely nothing wrong here. This is a non-story.
But whether someone is an independent contractor or an employee is not a matter of "convenience" or "common practice" it is suppose to be a matter of IRS regulations. Right now the GAO is guesstimating that over 30 million workers are misclassified. States are passing legislation right and left to make it more "costly" to misclassify workers and millions of dollars are lost in revenue for SUI etc due to this type of misclassification.
My question here is three-fold. First, If our political candidates don't think enough of our tax laws to follow them when they are not holding an elected office can they still create, and vote on legislation that will help keep the country moving in the right direction which ever direction that may be?
Second, why is it that no one seems to understand the basic rules of independent contractors?
And third, should people who deliberately break tax laws for their own financial gain (remember she doesn't have to pay FICA or SUI or FUTA so the campaign saves thousands of dollars which can be spent on ads and such) be given a chance to run our country? I include all those who hold appointed offices as well. Like paying for Nanny taxes or back income taxes.
Let us know what you think.
Tuesday, August 3, 2010
Minnesota Providing Guidance on 2010 Withholding Requirements
Not many states have had time to react to the Affordable Care Act. So they are beginning to advise payroll professionals on how to handle reporting and taxation for 2010. Minnesota is the latest to give us some guidance.
The 2010 Minnesota State Legislature did not enact legislation incorporating into state law any of the changes to the IRC contained in the Affordable Care Act. So for the definition of wages payroll departments will have to include the fair market value of insurance benefits provided to nondependent adult children as taxable wages for 2010.
It appears that this will be a growing trend for the rest of the states with income taxes. And I think it will also be a trend for the SUI taxable wages as well.
It would be a great idea if payroll departments get out in front of this by informing employees of the tax consequences of this now before the employee gets hit with a big state income tax bill next year. Employees may want to adjust state withholding to compensate while they still have some time left.
How are you handling the state taxation of adult children insurance coverage in your department? Let us hear from you.
The 2010 Minnesota State Legislature did not enact legislation incorporating into state law any of the changes to the IRC contained in the Affordable Care Act. So for the definition of wages payroll departments will have to include the fair market value of insurance benefits provided to nondependent adult children as taxable wages for 2010.
It appears that this will be a growing trend for the rest of the states with income taxes. And I think it will also be a trend for the SUI taxable wages as well.
It would be a great idea if payroll departments get out in front of this by informing employees of the tax consequences of this now before the employee gets hit with a big state income tax bill next year. Employees may want to adjust state withholding to compensate while they still have some time left.
How are you handling the state taxation of adult children insurance coverage in your department? Let us hear from you.
Monday, August 2, 2010
Military Spouses in Ohio Just the Latest
Since the 2009 change in tax law under the Military Spouses Residency Relief Act that permits military spouses to be able to determine their residence for taxation while on assignment with the military spouse more and more states have weighed in. The latest is Ohio.
This act basically states that a civilian spouse of an active duty military service member is not subject to income tax of the state in which the spouse is present if the service member and the spouse have the same state of residency and that state is in another state other than the one in which the service member is stationed.
Ohio's Department of Taxation is now making the IT-MIL-SP form available for spouses of active duty military. This form allows the spouse to exempt themselves from Ohio taxation for wages earned in Ohio if that is the duty station of the military spouse but not the actual resident state of the spouse.
Payroll professionals need to research this area carefully as many of the states are now using this type of form to allow the spouses to opt out of taxation on their payroll check.
This act basically states that a civilian spouse of an active duty military service member is not subject to income tax of the state in which the spouse is present if the service member and the spouse have the same state of residency and that state is in another state other than the one in which the service member is stationed.
Ohio's Department of Taxation is now making the IT-MIL-SP form available for spouses of active duty military. This form allows the spouse to exempt themselves from Ohio taxation for wages earned in Ohio if that is the duty station of the military spouse but not the actual resident state of the spouse.
Payroll professionals need to research this area carefully as many of the states are now using this type of form to allow the spouses to opt out of taxation on their payroll check.
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