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CA Minimum Wage Increases to $10 per hour

Effective January 1, 2016, the minimum wage in California is $10.00 per hour. Read more… http://www.dir.ca.gov/dlse/faq_minimumwage.htm

Be on the lookout for IRS Payroll Tax Deposit frequency notices

Each year, during November and December, the IRS sends out FTD Federal Tax Deposit Frequency notices that inform you about what schedule that your payroll taxes must be paid. Your deposit schedule for a calendar year is determined from the total taxes reported on your Forms 941 in a four-quarter lookback period. The lookback period […]

Be on the lookout for state state UI rate notice for 2016

Each year during November and December, states send out UI (unemployment insurance) rate notices for the upcoming year. You want to make sure to input that new rate before the first payroll of 2016 to avoid miscalculation of the UI tax liability.

2016 Retirement Plan Contribution Limits

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000. […]

For 2016 Social Security Wage Base remains at $118,500

Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year with changes in the national average wage index. We call this annual limit the […]

2015 SIMPLE IRA Plan FAQs – Contributions

SIMPLE IRA Plan FAQs – Contributions What types of contributions may be made to a SIMPLE IRA plan? Each eligible employee may make a salary reduction contribution and the employer must make either a: matching contribution or nonelective contribution. No other contributions may be made under a SIMPLE IRA plan. Can contributions made under a […]

New California Mandatory Paid Sick Leave Law begins 7/15/15

Healthy Workplace Healthy Family Act of 2014 (AB 1522)   See overview: http://www.dir.ca.gov/dlse/ab1522.html See FAQ: http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm   An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment, is entitled to paid sick leave. Employees, including part-time and temporary employees, will earn at […]

Payroll taxes and rates: wage bases and limits-Multiple Years

Taxes and rates: wage bases and limits Article ID: 2000093  Source: http://payroll.intuit.com/support/kb/2000093.html Overview This article is about the rates and limits for Social Security, Medicare, federal income tax (FIT), state income tax (SIT), and state unemployment income (SUI). Assumptions You have employees subject to federal taxes. Details Wage base limits for DIY and Assisted payroll are […]

For 2015 Social Security Wage Base increases to $118,500

Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year with changes in the national average wage index. We call this annual limit the […]

Accountable Plan Expense Reimbursements

From IRS Publication 15 (2014) http://www.irs.gov/pub/irs-pdf/p15.pdf Employee business expense reimbursements. A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees’ business expenses. How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. If a single payment includes […]

QuickBooks Payroll: FAQs for 2014 FUTA Credit Reduction States

This article explains how the Federal Unemployment Tax Act (FUTA) credit reduction affects your FUTA taxes, Form 940, and Schedule A for 2014. http://payroll.intuit.com/support/kb/1000921.html

2014 Federal Unemployment Tax Act (FUTA) Credit Reductions

FUTA Credit Reduction What is a credit reduction state? A state is a credit reduction state if it has taken loans from the federal government to meet its state unemployment benefits liabilities and has not repaid the loans within the allowable time frame. A reduction in the usual credit against the full FUTA tax rate […]

What employees are exempt from hourly pay provisions of the FLSA?

Many employers want to treat their employees as salary employees instead of hourly employees. There are big potential problems if you do this with an employee that is not exempt from the minimum wage rules of the FLSA (Fair Labor Standards Act). Note that certain states have wage and hour rules that are more stringent […]

IRS Semi-weekly and Next-Day Payroll Tax Deposit Requirements

If you have a tax liability of more than $50,000 in the look back period (2012Q3 + 2012Q4 + 2013Q1 + 2013Q2), the semi-weekly deposit schedule applies to you. As a semi-weekly schedule depositor, your deposit of accumulated taxes for wages paid on Wednesday, Thursday, or Friday is due by the following Wednesday. Deposit of […]

IRS Announces 2014 Pension Plan Limitations

IR-2013-86, Oct. 31, 2013 WASHINGTON — The Internal Revenue Service today announced cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014.  Some pension limitations such as those governing 401(k) plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory […]

Employers may owe additional tax on FUTA wages paid in credit reduction states.

FUTA Credit Reduction What is a credit reduction state? A state is a credit reduction state if it has taken loans from the federal government to meet its state unemployment benefits liabilities and has not repaid the loans within the allowable time frame. A reduction in the usual credit against the full FUTA tax rate […]

For 2014 Social Security Wage Base increases to $117,000

For 2014 Social Security Wage Base increases to $117,000 Source: http://www.socialsecurity.gov/OACT/COLA/cbb.html

2013 Social Sec/Medicare Rates & Wage Bases

2013 Social Sec/Medicare Rates & Wage Bases Social Security: EmployEE: 6.2% on earnings up to $113,700 EmployER: 6.2% on earnings up to $113,700 Medicare: Employee/employer (each) 1.45% on all earnings* * Certain high-income taxpayers will be required to pay an additional Medicare tax beginning in 2013. For details, see the IRS information on this topic. Basics: Employer […]

Questions and Answers for the Additional Medicare Tax

Questions and Answers for the Additional Medicare Tax: Source: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax The following questions and answers provide employers and payroll service providers information that will help them as they prepare to implement the Additional Medicare Tax which goes into effect in 2013. The Additional Medicare Tax applies to individuals’ wages, other compensation, and self-employment income over […]

Partners are not employees and should not be issued a W-2

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. A partnership must file an annual information return to report the income, deductions, gains, losses, […]

2012 SIMPLE IRA Contribution Limits

SIMPLE IRA contributions include: salary reduction contributions and employer contributions: a. matching contributions or b. nonelective contributions. No other contributions can be made to a SIMPLE IRA plan. Salary reduction contributions. The amount the employee contributes to a SIMPLE IRA cannot exceed $11,500 for 2011 and 2012. If an employee participates in any other employer plan […]

CA Employer New Hire Notice (Wage Theft Protection Act of 2011)

California Governor Brown has signed into law AB 469 (Chapter 655, Statutes of 2011) known as the Wage Theft Protection Act of 2011. Click here for the full text of the Bill. The provisions of the Act become effective January 1, 2012. Labor Code section 2810.5 was added by the bill which requires that all […]

Payroll tax cut extended for remainder of 2012

The Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) that was signed into law by President Obama on February 22, 2012, extends the 4.2% Social Security tax rate for employees through December 31, 2012. It also extends jobless benefits for between 63 weeks and 73 weeks, and averts a big cut […]

2012 Form W-4, Employee Withholding Allowance Certificate

Workers should review their withholding every year and if necessary, fill out a new Form W-4 and submit it to their employer. Workers who claimed exempt on their 2011 Form W-4 will need to complete a new Form W-4 for tax year 2012 by February 16, 2012 in order to maintain their exempt status.

Wages paid in excess of $18,350 within the first two months of 2012.

What to do regarding wages paid in excess of $18,350 within the first two months of 2012?  At this time, 4.2% Social Security Tax should be withheld on all wages for that period (01/01/12-02/29/12). Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive […]