The leaves are falling and though we may not want to believe it is already that time of year it is coming. The end of the year can be busy for many different reasons back to school, holidays and the looming tax season. Now is the time to start preparing for end of the year wage reporting. New business owners and seasoned veterans alike should get themselves organized for the end of the year. Preparation is key to the process running smoothly.
Beginning in October you can order your forms. You can order paper forms or form printing software. Form printing software allows the user to print W2 and W3
forms A beneficial feature to look for when purchasing software is laser substitute printing. Laser substitute printing government approved W2 copy A and W3 forms to blank paper. You may have a payroll software that generates W2 forms in this case you may already be equipped with the supplies you need.
In November you can expect Federal Tax Employment Forms, IRS Pub No. 393 and MMREF-1 (Magnetic Media Reporting and Electronic Filing) booklet. IRS Pub No. 393 should include a label which is to be attached to the W3 form. MMREF-1 booklet is for those employers whom electronically file their wage reports. The booklet contains specifications and edits for filing wage reports electronically. An electronic file must meet the government specifications. To generate an acceptable file employers must use a software program that generates that particular format. As stated earlier form printing software that also has this capability can be most beneficial.
By December you should have informed your employees to update their federal income tax withholding form (W-4), file a new Earned Income Credit Advance Payment Certificate (W-5) and report any name changes if necessary. If you have any employees which claimed an exemption from federal income tax withholding in the past year should file a new W-4 forms before February 18th. On February 19th you will have to start withholding at a single person rate with zero exemptions if those employees have not filed a new W-4 form.
These few steps will help you prepare to issue W2 form to your employees and file W2 A and W3 forms with SSA. You will also be organized going into the next year. If you do not use payroll software or are being priced out of your current software the beginning of a new tax year is a perfect time to invest in a new program.
Thursday, October 1, 2009
Monday, September 28, 2009
Employer Wage Reporting
Employers have a responsibility to complete specific tasks related to wages paid to employees. Different types of businesses may require additional forms. It is always best to confirm your particular requirements with the IRS.
In January employers will be wrapping up the previous year’s reporting issues. Employers will file, with the IRS, the previous year’s 4th quarter 941 form. Determine if the tax withholding (federal, Social Security and/or Medicare) rates have changed from the previous year. If rates have changed you will need to make the necessary changes accordingly. The deadline for issuing W2 forms to employees also comes at the end of the month.
With the second month of the year come a few more tasks. This is the time to file W2 forms A and W3 with the SSA. Take the time to match form 941b totals W3 information.
April starts the second quarter of the tax year. File 1st quarter 941 form by the last day of April. The 2nd quarter 941 form is due the last day of July this includes payroll from April 1st through June 30th. In October third quarter 941 form is due including payroll periods July through September.
In November request Publication 393, MMREF instructions from SSA or IRS, if you have not received it. If employers plan on electronically filing W2 information they should update their password at SSA’s Business Services Online. Before the end of the year have your employees update their W-4 and W-5 forms for the next year. Whether electronic filing or paper filing submitters should test their form processes for the next year.
The beginning of the new tax year may be an excellent time to consider investing in payroll software. A complete payroll program can save users time and money at the same time avoiding costly calculation errors on payroll forms. For a free trial of Payroll Mate follow this link: payroll software download
To read this article in Spanish please follow this link:
Reporte De Salarios Para
Los Empleadores Con Software De Nomina
In January employers will be wrapping up the previous year’s reporting issues. Employers will file, with the IRS, the previous year’s 4th quarter 941 form. Determine if the tax withholding (federal, Social Security and/or Medicare) rates have changed from the previous year. If rates have changed you will need to make the necessary changes accordingly. The deadline for issuing W2 forms to employees also comes at the end of the month.
With the second month of the year come a few more tasks. This is the time to file W2 forms A and W3 with the SSA. Take the time to match form 941b totals W3 information.
April starts the second quarter of the tax year. File 1st quarter 941 form by the last day of April. The 2nd quarter 941 form is due the last day of July this includes payroll from April 1st through June 30th. In October third quarter 941 form is due including payroll periods July through September.
In November request Publication 393, MMREF instructions from SSA or IRS, if you have not received it. If employers plan on electronically filing W2 information they should update their password at SSA’s Business Services Online. Before the end of the year have your employees update their W-4 and W-5 forms for the next year. Whether electronic filing or paper filing submitters should test their form processes for the next year.
The beginning of the new tax year may be an excellent time to consider investing in payroll software. A complete payroll program can save users time and money at the same time avoiding costly calculation errors on payroll forms. For a free trial of Payroll Mate follow this link: payroll software download
To read this article in Spanish please follow this link:
Reporte De Salarios Para
Los Empleadores Con Software De Nomina
Thursday, September 10, 2009
Avoiding W2 and W3 Errors
The fourth quarter of the tax year brings around the time to start preparing for end of the year wage reporting. Being organized and primed for this time of the year alleviates unnecessary last minute stress and mistakes. The IRS and SSA host a Small Business Seminar for both paper filers and/or electronic filers. Business owners may want to attend the seminar for valuable information on reporting wages and taxes and to receive the latest electronic filing instructions. If this is your first time generating W2 forms for your employees these seminars may be helpful. For information regarding the seminars contact the IRS (1-800-829-1040) or the Employer Service Liaison Officer (ESLO).
SSA asks employers to abide by a few guidelines when generating W2 and W3 forms. Keep your entries inside the boxes, use dark ink, do not erase or use white out on the form they also do not require dollar signs to be printed in the boxes.
W2 Box a – Employee’s nine digit Social Security number
W2 Box b – Employer’s nine digit identification number
W2 Box e – Employee’s name as shown on Social Security card and address
W2 Box 1 – Regular wages, tips and compensation
W2 Box 3 – Social Security wages, do not exceed maximum wages for the year
W2 Box 5 – Medicare wages, there is no limit on Medicare wages
W2 Box 7 – Tips paid
W3 Box b – This box must always be completed
W3 Box c – Show the total number of W2 forms included with this W3 form
W3 Boxes e, f, g – Position the label provided by the IRS in Publication No. 393 or enter EIN,employer’s name and employer’s address
W3 Box h – Show any other EIN number used during the tax year
This is a list of commonly used or required boxes on the W2 and W3 forms. Employers may be required to fill in additional boxes depending on their circumstances. Remember both the IRS and SSA websites can be very informative.
In October you can order W2 and W3 forms. You can order paper forms or W2 form printing software. By November the IRS will mail tax forms and IRS Publication No. 393 with a label identifying you as an employer. The label includes employer’s name, address and EIN, affix the label over Boxes e, f, g on the W3 form. For employers that file electronically you will receive the Magnetic Media Reporting and Electronic Filing booklet (MMREF-1). Before December your employees should update their W-4 and W-5 (Earned Income Credit Advance Payment Certificate) forms.
Before you actually file your wage reports you should balance your 941 form to your W3 form for the tax year. Annual amounts from payroll records should match the total amounts reported on all 941 forms for the year; the total amounts reported on all 941 forms for the tax year should match the sum of the same data fields shown in the W3 totals. To help you with balancing your records the SSA has prepared two worksheets. The first is a worksheet for the W3 form, the second is a worksheet for the fourth quarter 941 form. If you would like to use the worksheets to help you match your total amounts you can request a paper copy of the Employer’s Guide from SSA.
Strictly adhering to IRS and SSA guidelines and filing dates is the number one way to avoid errors and fines. Payroll software that automatically calculates Federal, Medicare, Social Security taxes and populates W2/3 and 941 forms lessens the tendency to make manual calculation errors.
Try a nice small business software:Payroll Mate
SSA asks employers to abide by a few guidelines when generating W2 and W3 forms. Keep your entries inside the boxes, use dark ink, do not erase or use white out on the form they also do not require dollar signs to be printed in the boxes.
W2 Box a – Employee’s nine digit Social Security number
W2 Box b – Employer’s nine digit identification number
W2 Box e – Employee’s name as shown on Social Security card and address
W2 Box 1 – Regular wages, tips and compensation
W2 Box 3 – Social Security wages, do not exceed maximum wages for the year
W2 Box 5 – Medicare wages, there is no limit on Medicare wages
W2 Box 7 – Tips paid
W3 Box b – This box must always be completed
W3 Box c – Show the total number of W2 forms included with this W3 form
W3 Boxes e, f, g – Position the label provided by the IRS in Publication No. 393 or enter EIN,employer’s name and employer’s address
W3 Box h – Show any other EIN number used during the tax year
This is a list of commonly used or required boxes on the W2 and W3 forms. Employers may be required to fill in additional boxes depending on their circumstances. Remember both the IRS and SSA websites can be very informative.
In October you can order W2 and W3 forms. You can order paper forms or W2 form printing software. By November the IRS will mail tax forms and IRS Publication No. 393 with a label identifying you as an employer. The label includes employer’s name, address and EIN, affix the label over Boxes e, f, g on the W3 form. For employers that file electronically you will receive the Magnetic Media Reporting and Electronic Filing booklet (MMREF-1). Before December your employees should update their W-4 and W-5 (Earned Income Credit Advance Payment Certificate) forms.
Before you actually file your wage reports you should balance your 941 form to your W3 form for the tax year. Annual amounts from payroll records should match the total amounts reported on all 941 forms for the year; the total amounts reported on all 941 forms for the tax year should match the sum of the same data fields shown in the W3 totals. To help you with balancing your records the SSA has prepared two worksheets. The first is a worksheet for the W3 form, the second is a worksheet for the fourth quarter 941 form. If you would like to use the worksheets to help you match your total amounts you can request a paper copy of the Employer’s Guide from SSA.
Strictly adhering to IRS and SSA guidelines and filing dates is the number one way to avoid errors and fines. Payroll software that automatically calculates Federal, Medicare, Social Security taxes and populates W2/3 and 941 forms lessens the tendency to make manual calculation errors.
Try a nice small business software:Payroll Mate
Monday, August 24, 2009
Payroll Forms Reporting Errors
Mistakes on payroll reporting forms can be time consuming and costly. With 941 time (always seems to be that time) and W2 season approaching fast now may be a good time to take a look at some of the frequent mistakes.
In general some of the most frequent reporting errors revolve around identifying the business and employee. The SSA and the IRS use the EIN and SSN for identification purposes. Your nine digit EIN should be correct and match on both your 941 and W3 forms. The social security number and employee’s name must match in the SSA’s file. Using titles such as Mr. and Mrs. in the name field may hinder the electronic identification of an individual. Another mistake can be made when reporting wages the year after an employee has passed away. These payments cannot be considered wages they must be reported on a 1099 Misc form in box 3.
Out of balance reports can occur due to several different circumstances. Omitting wages and/or taxes on a wage report or making a decimal error when reporting the wages and/or taxes. Always use a decimal point and report dollars and cents even if it is .00. Using the maximum Social Security wage amount for a prior year instead of the amount for the current tax year reported can be avoided by being an informed employer.
Specific W2/W3 form mistakes may be: not filing with SSA, using incorrect forms, not reporting the correct Medicare wages, or checking and/or not checking the proper boxes on the W2 form itself. W2 forms are to be filed with SSA not the IRS. Paper W2 copy A and W3 forms must be printed in OCR red drop-out ink on paper of the proper weight, margins and format. All paper forms must meet IRS regulations, red ink forms must be scannable and the forms must be for the correct reporting tax year. Remember, Medicare wages/tips do not have a limit that is subject to Medicare tax such as social security wages. Avoid checking the void box unless you do not want those wages reported. Another box to pay attention to is box 13 this includes the retirement plan box always check this box if your employee participates in a retirement plan.
Another important reporting form with frequent errors is the 941 Form. Some mistakes pertaining to these forms are again incorrect Medicare/Social Security wages and box 13, as pertaining to third party sick pay, also failing to file corrected forms and filing duplicate 941 forms. As with W2 forms separately report Medicare and Social Security wages but do not report amounts not covered by Social Security/Medicare wages such as employee earnings exceeding the yearly taxable amount for Social Security wages and payments to an independent contractor shown as wages.
If you need to adjust a prior year’s earnings on a 941 Form you must file W2c and W3c forms. Do not file duplicate 941 forms. This may happen if you include information from one month in two different quarterly filing reports. All these mistakes can be time consuming for the business owner to rectify and possibly incur monetary penalties.
Let’s try not to give anymore time and money than is required. Being vigilant and informed when inputting information and generating forms can help us avoid mistakes. Measure twice cut once as the saying goes, double check your forms the first time around to avoid a second time around.
In general some of the most frequent reporting errors revolve around identifying the business and employee. The SSA and the IRS use the EIN and SSN for identification purposes. Your nine digit EIN should be correct and match on both your 941 and W3 forms. The social security number and employee’s name must match in the SSA’s file. Using titles such as Mr. and Mrs. in the name field may hinder the electronic identification of an individual. Another mistake can be made when reporting wages the year after an employee has passed away. These payments cannot be considered wages they must be reported on a 1099 Misc form in box 3.
Out of balance reports can occur due to several different circumstances. Omitting wages and/or taxes on a wage report or making a decimal error when reporting the wages and/or taxes. Always use a decimal point and report dollars and cents even if it is .00. Using the maximum Social Security wage amount for a prior year instead of the amount for the current tax year reported can be avoided by being an informed employer.
Specific W2/W3 form mistakes may be: not filing with SSA, using incorrect forms, not reporting the correct Medicare wages, or checking and/or not checking the proper boxes on the W2 form itself. W2 forms are to be filed with SSA not the IRS. Paper W2 copy A and W3 forms must be printed in OCR red drop-out ink on paper of the proper weight, margins and format. All paper forms must meet IRS regulations, red ink forms must be scannable and the forms must be for the correct reporting tax year. Remember, Medicare wages/tips do not have a limit that is subject to Medicare tax such as social security wages. Avoid checking the void box unless you do not want those wages reported. Another box to pay attention to is box 13 this includes the retirement plan box always check this box if your employee participates in a retirement plan.
Another important reporting form with frequent errors is the 941 Form. Some mistakes pertaining to these forms are again incorrect Medicare/Social Security wages and box 13, as pertaining to third party sick pay, also failing to file corrected forms and filing duplicate 941 forms. As with W2 forms separately report Medicare and Social Security wages but do not report amounts not covered by Social Security/Medicare wages such as employee earnings exceeding the yearly taxable amount for Social Security wages and payments to an independent contractor shown as wages.
If you need to adjust a prior year’s earnings on a 941 Form you must file W2c and W3c forms. Do not file duplicate 941 forms. This may happen if you include information from one month in two different quarterly filing reports. All these mistakes can be time consuming for the business owner to rectify and possibly incur monetary penalties.
Let’s try not to give anymore time and money than is required. Being vigilant and informed when inputting information and generating forms can help us avoid mistakes. Measure twice cut once as the saying goes, double check your forms the first time around to avoid a second time around.
Monday, August 10, 2009
Federal Minimum Wage Increases
On Friday July 24, 2009 the federal minimum wage increased to $7.25. This increase affects a number of states and all employees who are covered by the Fair Labor Standards Act (FSLA). The increase is the third and final in a succession of increases, over a three year period, mandated by a bill that was passed in 2007.
The most recent increase will improve the wages, for employees, in thirty states (Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin and Wyoming) across the country. These states were either below the federal minimum wage or did not have a minimum wage. Under the Fair Labor Standards Act all employers, with very few exceptions, are required to the federal minimum wage to their non-exempt employees.
To be in compliance with the FLSA all employers subject to the requirements, must post a notice explaining the act. This notice must be posted in a prominent workplace so that employees can easily read the provisions. Posters and other compliance assistance materials concerning the minimum wage increase are available free of charge from the Labor Department's Wage and Hour Division.
In today’s economic climate full-time and part-time employees, whom the change affects, will welcome a boost in their paycheck. Employers may be nervous about the change if they are still manually calculating payroll. A simple solution, for small business owners in this situation, would be to invest in employee payroll software. A small upfront investment saves time, money and aggravation in the long run.
Try a free demo version of this small business payroll software: software download
The most recent increase will improve the wages, for employees, in thirty states (Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin and Wyoming) across the country. These states were either below the federal minimum wage or did not have a minimum wage. Under the Fair Labor Standards Act all employers, with very few exceptions, are required to the federal minimum wage to their non-exempt employees.
To be in compliance with the FLSA all employers subject to the requirements, must post a notice explaining the act. This notice must be posted in a prominent workplace so that employees can easily read the provisions. Posters and other compliance assistance materials concerning the minimum wage increase are available free of charge from the Labor Department's Wage and Hour Division.
In today’s economic climate full-time and part-time employees, whom the change affects, will welcome a boost in their paycheck. Employers may be nervous about the change if they are still manually calculating payroll. A simple solution, for small business owners in this situation, would be to invest in employee payroll software. A small upfront investment saves time, money and aggravation in the long run.
Try a free demo version of this small business payroll software: software download
Monday, July 13, 2009
Second Quarter 941 Deadline
The IRS deadline, to file the second quarter 941 form (Employer’s Quarterly Federal Tax Return) is nearing. To be compliant with government regulations this is one of many payroll forms business owners and employers need to prepare. Employers use this form to report wages paid, tips received by employees, federal income tax withheld, both the employee and employer portion of Social Security and Medicare taxes, the current quarter’s adjustments to Social Security and Medicare tax for fraction of cents, sick pay, tips, group-term life insurance, advanced earned income tax credit (EIC) payments and credit for COBRA premium assistance payments.
Those employers, who filed the first quarter 941 form, for 2009, may recall the credit for COBRA premium assistance payments line was a new addition at the time. This line was added to accommodate the COBRA premium benefits outlined in the American Recovery and Reinvestment Act of 2009.
Form 941 is due the last day of the month that follows the end of the quarter. Second quarter 941 Form is due on July 31, 2009 and includes payroll periods in April, May and June. Third quarter 941 Form is due October 31, 2009 and includes payroll periods in July, August and September. Fourth quarter 941 Form is due January 31, 2010 and includes payroll periods in October, November and December.
Preparing this can be cumbersome and time consuming. Comprehensive payroll software that includes payroll forms and reports can save business owners time and money. An automated payroll solution can save employers from possible mistakes during tedious calculations when completing payroll forms.
Many states have undergone tax table changes in 2009. Another dilemma averted by an automated payroll program. Receive automatic tax table updates and payroll forms with Payroll Mate. Payroll Mate is a user friendly, cost effective payroll solution.
A free demo version can be downloaded at payroll software download
Those employers, who filed the first quarter 941 form, for 2009, may recall the credit for COBRA premium assistance payments line was a new addition at the time. This line was added to accommodate the COBRA premium benefits outlined in the American Recovery and Reinvestment Act of 2009.
Form 941 is due the last day of the month that follows the end of the quarter. Second quarter 941 Form is due on July 31, 2009 and includes payroll periods in April, May and June. Third quarter 941 Form is due October 31, 2009 and includes payroll periods in July, August and September. Fourth quarter 941 Form is due January 31, 2010 and includes payroll periods in October, November and December.
Preparing this can be cumbersome and time consuming. Comprehensive payroll software that includes payroll forms and reports can save business owners time and money. An automated payroll solution can save employers from possible mistakes during tedious calculations when completing payroll forms.
Many states have undergone tax table changes in 2009. Another dilemma averted by an automated payroll program. Receive automatic tax table updates and payroll forms with Payroll Mate. Payroll Mate is a user friendly, cost effective payroll solution.
A free demo version can be downloaded at payroll software download
Monday, July 6, 2009
2009 California Withholding Schedules Replaced
Recently a number of states have amended their tax withholding schedules.Using a payroll software can assist you in achieving a smooth transition when applying income tax changes.
As a result of the recent budget, the California Withholding Schedules for 2009 included in the 2009 California Employer’s Guide have been replaced.The schedules have been updated to accurately reflect the withholding amounts that should be withheld in each bracket of income at the time of the employee’s payroll.
Information regarding Method B- Exact calculation method can be found at http://www.edd.ca.gov/pdf_pub_ctr/09methb.pdf
For additional information about California Personal Income Tax www.ftb.ca.gov
This California payroll software has completed the updates and sent the new tax changes, by the internet, to their customers.
Download a free demo of this payroll software: Payroll Mate
As a result of the recent budget, the California Withholding Schedules for 2009 included in the 2009 California Employer’s Guide have been replaced.The schedules have been updated to accurately reflect the withholding amounts that should be withheld in each bracket of income at the time of the employee’s payroll.
Information regarding Method B- Exact calculation method can be found at http://www.edd.ca.gov/pdf_pub_ctr/09methb.pdf
For additional information about California Personal Income Tax www.ftb.ca.gov
This California payroll software has completed the updates and sent the new tax changes, by the internet, to their customers.
Download a free demo of this payroll software: Payroll Mate
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