A Busy September but Productive

Well I am back.  It has been a very hectic September.  My website is coming along nicely.  We are building up the Payroll Resource Collection and should have it all built by the end of the year.  So for now we are offering free access to this valuable collection until December 31st.  Just sign up on our website.

Not only have I been busy but so has Congress, the IRS and even some of the states. Let's review what has happened so far.

1. Good news for company cell phone users.  The Small Business Jobs Bil of 2010 signed by President Obama on September 27th.  The bill removes cell phones from the definition of Listed Property in the Internal Revenue Code.  It is effective for tax years after December 31, 2009.  This means that the heightened substantiation  requirements do not apply to cell phones. 

2.  Bad news in the same bill for employers who are late or who fail to provide informational returns.  The penalties have been increased.  First Tier goes from $15 to $30 and the calendar year maximum increases from $75,000 to $250,000.  A complete recap of the penalties are on my website.

3. IRS is putting off mandatory reporting on Form W-2 for health insurance and making it optional for 2011.  This is to allow businesses--read that payroll departments--time to adjust systems to allow for the new requirement.  Read the entire news report on our website under IRS News.

4.  States are beginning to announce new minimum wages for 2011.  Missouri will remain unchanged for 2011.  Montana is going up to $7.35.  Ohio is going up to $7.40 for non-tipped employees and $3.70 for tipped if tips including. Oregon is going to $8.50.

5. States are beginning to announce tax changes as well.  Oklahoma is requiring all SUI reports to be filed electronically in 2011. Iowa tax tables will remain the same in 2011.

So now we begin the year end hectic rush of news for payroll.  I will keep you updated on the blog. If you need to receive news of new minimum wages etc as it breaks sign up for our news bulletin.  We send out an e-mail blast as each news item is announced by the source.   See my website for details and to sign up.

Payroll Benchmarking --Best Practice

I have been finishing up my latest project this week.  The benchmarking report for my publisher.  It is a lot of work but really an enjoyable venture.  It is very interesting to see all of the statistics on the costs etc associated with payroll just laid out to review at my leisure.  When I was first working full time in payroll I would have killed to see some of these numbers.  But back in those days no one had heard of benchmarking. So I had to guess how well I was doing.  There was nothing to compare it to.

But it wasn't really necessary to benchmark back in those days either.  Since we only paid by check or cash, had only a few fringe benefits--no 401(k) or cafeteria plans, and very few garnishments what was there to benchmark.  All anyone cared about is that I got the payroll out on time.  Compliance wasn't even an issue with the company--just me!  Just get it out on time, don't make too many mistakes or tick any of the employees off and they were satisfied.

But times certainly have changed.  Now they want you to get it out on time, don't make too many mistakes, don't tick off any employees, keep in compliance (still not as strict as it should be), and on top of all that--keep the costs down.

So today I guess my suggestion for a best practice is to check out how well you are doing.  Think about adding benchmarking to your project list next year.  You will find places to save costs, improve functions and processes and maybe even impress the bosses.  Who knows, might even surprise yourself at how well you are doing.

How many out there are benchmarking already?  Let us know what you have found.

New Forms are Everywhere These Days

It amazes me sometimes how the world of  payroll goes in cycles.  For years we use the same old forms--941, DE 6 and DE 7 in California, etc.  Then suddenly everyone is bored or something and new forms start popping up.  Remember when the 941 had nonpayroll related stuff on it?  They broke that out with the 945.  Then smaller employers got the 944.  Then the 941 stayed the same for quite a while year in and year out the same lines with the same things until last year.  Then we got 2 forms in the same year last year and then again this year and it will be changing again next year.

Well now CA is doing the same.  They are changing quarterly returns starting in January of 2011.  Gone is the lovely DE 6 and the equally as lovely DE 7.  Now we will have the DE 9 and the continuation DE 9C. Note: For more details on what each form does see our website under State News.  It just seems that as soon as you get complacent knowing all the forms you have to submit along comes a new one.

Oh well, at least it gives me something to write about anyway.

IRS Proposes Paperless in 2011 and I agree

The IRS issued a news bulletin last week that it is proposing that all deposits for taxes be done by electronic funds transfer or EFT.  The IRS has long had a reliable system in place for making deposits via EFT and I for one think it is about high time they went paperless.  There is no reason to keep paying clerks etc to handle paper when it can be done quickly and cleanly with far less "human error" on the side of the IRS.  Most of the country is use to using electronic methods for deposits or withdrawals or information.  Those that aren't can catch up with the rest of us, which they should anyway.

So to the IRS I say bravo!  Go 100% paperless deposits in 2011 and move the government into the 21st century with the rest of us.

What do you think?

Just a quick note, I will not have a blog for tomorrow or Thursday.  I have a family medical procedure to attend to and will return on Monday.

Our New Website is Up and Running at Last!

Our new website at www.thepayrolladvisor.com is up and running at full strength now.  Please check it out when you can.  We have put the latest news on the home page with links to the stories for your convenience.  The news will be updated as items come across my desk.  If you hear of a news story but don't see it on our home page let me know at payrolladvisor@cox.net and we will research the item.

We will be covering the latest news from the IRS, Department of Labor, Social Security Administration and all 50 states.  So whether it is the new tax amnesty program in Kansas, going paperless at the IRS in 2011 or giving the IRS a comment on the Form W-11 you will find it in our "Latest Updates" section.

To save time be sure to sign up for our free news bulletin.  We issue the news bulletin whenever a story breaks so you don't get dozens of e-mails a day with some trivial story and 10 columns of advertisement.  We issue the news bulletin when we have information to send. So you may get one on Tuesday but not again until the following Monday.  We want to make sure you have the latest news but not be bothered otherwise. You have a payroll to get out and we know that. So sign up now at www.thepayrolladvisor.com and tell all your friends.

The IRS is Asking for Comments---Are You Giving Them?

In my news bulletin for my subscribers and on my Facebook page today I covered the announcement by the IRS that they are seeking comments on the Form W-11.  The Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit was created to be used as a template for employers who must collect affidavits from qualifying employees.  It was for the convenience of the employer only and the form is not submitted.  So the IRS wants to know how the form is working. This type of request for comments is very common for the IRS and payroll is not taking full advantage of the opportunity to be heard.

Payroll professionals need to take the time to respond to these comment requests.  Even if you like the form and can only write a few lines.  The more the IRS hears from individual payroll professionals the more credibility we will have with them and that upgrades our profession. Generally, most of the time the IRS will hear from attorneys or similar agents of employers, or organizations such as the APA.  But what we really should be doing is not relying on the American Payroll Association to give "their" opinion on what payroll likes but give our own opinion.

Our opinions are valuable and they need to be heard.  But they can't be heard unless we take the time to submit them.   So let the IRS know how you feel about Form W-11.  Send your comments by October 12th to:  Gerald Shields, Internal Revenue Service, Room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.

I will be posting my comments that I send to the IRS on this subject in a couple of weeks.  Post yours here as well so we can all read them and get inspired to send ours in.

EIC In Advance is Now History

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.