WOW!!!
There is a plethora of new, fun, things to know about payroll and benefits!
New Hire Payroll Tax Cut: you may have heard about this one - there is a bill in front of Congress that would allow for a break from the 6.2% SS tax on new hires wages for 2010. The specifics: the worker must have been unemployed for 60 days or more, and they must replace someone who left voluntarily or was terminated. Employers would also receive an additional $1,000 income tax credit in 2011 for those they keep on the payroll for 52 weeks.
Pay Your Payroll Taxes on Time: Just about anyone could be held a "responsible person" liable for a trust fund penalty - even an entrepreneur. Someone who served as a corporate officer and director who hired, fired, and secured loans was found personally responsible when one of his restaurants started losing money and the people he hired to take care of the payroll failed to pay his quarterly payroll taxes. Since it was deemed that he knew and decided to pay other creditors first, he was penalized an amount equal to 100% of the unpaid taxes. Ouch!
FSLA Compliance - 4 of the Most Common Mistakes:
- Giving comp time instead of overtime.
- Considering employees who are paid a salary as exempt from OT.
- Treating anyone paid on a commission basis as exempt.
- Treating all sales personnel as exempt employees The Act can be a bit intimidating but is a very important part of any employee/employer relationship.
Payroll Tax Treatment of Safety Gear: If you reimburse employees for certain safety gear like steel-toed boots and hard hats, do you have to include that as income to the employee? Well, no you don't - as long as the expenses are substantiated. According to the IRS "clothing or uniforms are excluded from the wages of an employee if they: are specifically required as a condition of employment, and aren't worn or adaptable to general usage as ordinary clothing." (I guess that means that those $500 Jimmy Choo shoes won't go through on my expense report!)
Can you get paid to take a shower? You sure can - if you work in an industry that requires you to wear protective clothing and you work with hazardous materials and must change your clothes and shower before leaving work. That zippy Fair Labor Standards Act at work again!
Want to know what it's going to cost you if you cheat on your taxes? Average jail time in 2009 was 24 months.
Well - that was fun, wasn't it?? Now, get back to work - the farmers may be done, but those pesky corporation returns are knocking on the door wanting to be taken care of next!
Have a great day!
Kelly Harwick
Accounting Supervisor, QuickBooks Support
I know you’ve been waiting for it!! The latest in payroll trends is here…sit down and hold on cuz here we go:
The IRS is launching its National Research Program (NRP) this month. The NRP is an intense program where auditors go line- by-line through employment tax returns to gather the impact of employment noncompliance on the tax gap. The selection process is entirely random and there isn’t anything you can do to avoid being chosen. They are hitting about 2,000 employers over the next three years.
Furlough’s and Exempt from OT Status: Remember that if you have an employer that may require some salaried employees to take unpaid furlough time, they may be risking the exempt status under the Fair Labor Standards Act. The DOL states that “In no event can any deductions from an exempt employee’s salary be made for full or partial day absences occasioned by lack of work.” If an employee is ready, willing, and able to work, deductions may not be made for time when work is not available. If you need more information on what makes an employee exempt from overtime status, let me know!
Mileage Rate: Even though the standard mileage rate went down for 2010, if an employer chooses to reimburse at a rate higher than the IRS rate, the difference must be picked up as income to the employee.
Cobra Subsidy extends through 2/28/10 for recently terminated employees and an additional 6 months of premium assistance to those already receiving the subsidy
I know, you can let go of your chair now – today’s wild ride is over!
Look forward to the next issue of Payroll Update coming soon to a computer near you!
Kelly Harwick
Accounting Supervisor, QuickBooks Support
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