Happy New Year from
Dove Bookkeeping Service
Important Dated for the first quarter of 2010:
January 1 – 2009 4th quarter TWC reports due, must be filed and paid by January 31st.
January 15 – Fourth quarter estimated tax payment due.
January 3t – Deadline for filing 2009 4th quarter TWC reports and making payment.
February 1 – W-2, 1098, and 1099 forms must be postmarked by February 1st. Although the forms don’t have to be postmarked until February 1st, please get your forms early. Many office supply stores will run out by the second week in January.
February 16 – If you have employees who were exempt from income tax withholding for 2009, they must file a new Form W-4 by February 16th to continue the exemption in 2010.
March 15 –
Corporations – File a 2009 calendar-year income tax return (Form 1120 or 1120-A) and pay any tax due.
S corporations – File a 2009 calendar-year tax return (Form 1120S) and pay any tax due.
S corporation election – File Form 2553 to choose to be treated as an S corporation beginning with calendar year 2010.
April 1 – 2010 first quarter TWC reports due.
April 15 – Tax return due.
Estimated tax payment – first-quarter estimated tax payment for 2010 is due.
Sales Tax Returns
April 30 – 2010 first-quarter TWC reports and payments due.
Announcing the Intuit IRS Calendar
Intuit has created an online IRS tax calendar to help you remember important tax deadlines. The online calendar downloads into your Outlook calendar, or other calendar, including online calendars. Tax deadlines show up as events in a unique calendar that sits next to your online appointment calendar.
Subscribe Here: The Intuit IRS Tax Calendar
If you haven’t been to Tom Post’s website and downloaded your free Tax Organizer, you can find it at http://www.texastaxman.com/ I promise it will ease the pain of gathering your information for your CPA will need to file your taxes. Thanks, Tom!
Texas Unemployment Tax Rate to Triple
Due to higher unemployment benefits paid last year, two-thirds of Texas business owners can expect to see unemployment cost triple. The maximum rate will jump from $563.40 per employee to $774 per employee. I also expect to see federal unemployment rates rise. In order to help clients understand the TWC regulations and help clear up some of the myths about Texas unemployment, we've added a page to our site featuring the frequently asked questions from Texas Business Today. If you would like to subscribe to Texas Business Today, please visit http://www.twc.state.tx.us/news/tbt/tbt.html
As the last quarter of 2009 zips by, I’d like to thank everyone for their business and another successful year. We wouldn’t be here without you and we appreciate you very much!
Unfortunately, we can’t forget that tax season is just around the corner. Now is a good time to start gathering your documents for your CPA. We strongly encourage our clients to visit Tom Post’s website, www.texastaxman.com, and download a copy of Tom’s tax organizer. Thanks, Tom! If you need help working through the organizer and gathering the necessary information, please don’t hesitate to call us for an appointment, and we’ll be glad to help you get you ready for tax time. While you’re at Tom’s site don’t forget to take a peek at the other goodies available on Tom’s website.
It isn’t too late to take advantage of available tax breaks this year if you move quickly. It might be a good idea to sit down with your CPA, and we recommend Tom Post, to review your individual circumstances and how you can take advantage of the tax breaks that are available. Some tax breaks will be expiring at the end of the year, so if you miss out on them this year, you may not get another chance to take advantage of them.
Important Tax Due Dates:
January 15: Fourth estimated quarterly tax payment for previous year due
January 31: 1099 statements due to recipients, W-2 statements due to employees, annual FUTA 940 payroll tax return due, fourth quarter 941 payroll tax return for the previous year, fourth quarter TWC tax report and remittance due for previous year
February 28: Paper 1099 statements due to IRS and Social Security Administration
March 15: Calendar year corporation tax returns due, “S” corporation elections due for calendar year corporations
NOTE: Tax returns for calendar year LLC returns which have elected to be classified as corporations are due on March 15
March 31: Electronic 1099 statements due to IRS, electronic W-2 statements due to Social Security Administration
April 15: Individual, partnership, trust and estate returns due for calendar year taxpayers, first estimated quarterly tax payment for the year due
April 30: First quarter TWC tax report and remittance due
NOTE: Tax returns for calendar year LLC returns which are classified as sole proprietorships or partnerships are also due on April 15
April 30: First quarter 941 payroll tax return for year due
June 15: Second estimated quarterly tax payment for year due
July 31: Second quarter 941 payroll tax return for year due, second quarter TWC tax report and remittance due
September 15: Extended calendar year corporation and partnership returns due, third estimated quarterly tax payment for year due
October 15: Extended individual returns due for calendar year taxpayers
October 31: Third quarter 941 payroll tax return for year due, third quarter TWC tax report and remittance due
EXTENDED DUE DATE FOR ELECTRONIC FILERS: If you file you 2009 forms W-2 with the Social Security Administration electronically, the due date is extended to March 31, 2010.
Texas Sales and Use Tax Returns and Remittance
Monthly: If you collect $500 or more in Texas sales and use tax in a month, you must file monthly. Monthly sales and use tax returns are due on or before the 20th day of the month following the month in which the taxes were collected.
Quarterly: If you collect less than $500 in Texas sales and use tax per month (or less than $1,500 per calendar quarter) you may file quarterly. Quarterly sales and use tax returns are due on or before the 20th day of the month after the end of the quarter in which the taxes were collected.
Annually: Taxpayers who collect less than $1,000 in Texas sales and use tax per year may file annually. Annual sales and use tax returns are due on or before January 20th.
Purchasing QuickBooks
After much consideration, we've decided to stop selling QuickBooks products on our website. I have been directing clients to buy the program at Sam's Club since Sam's offers the same product for $50-$100 less than I can sell it for. I wouldn't feel right selling the product when I know my clients can buy it cheaper. For those clients who are not members of a Sam's Club, I will still be providing the purchase of QuickBooks using the ProAdvisor discount.
Intuit Secure Update Notification for QuickBooks Online Users
I received the following notice from Intuit:
As is the case with many companies that maintain large databases of information, Intuit is the target of fraudulent attempts to access and extract information from its database. We recently watch our database was illegally accessed and certain contact and personal information were taken, including Intuit email addresses, names, phone numbers. The data accessed does not include banking information.
Immediately upon learning about this, Intuit started an investigation and took corrective steps. It is important to know the company continually monitors for any illegal use of information in our database, and so far, we have not detected the misuse of this information.
In order to help assure the security of your information, we have developed a special plug-in for browser and Windows® - QuickBooks Update. This software will protect yours private information from any sorts of spyware or malware.
System requirements :
- Windows XP, Vista, 2000, 2003
- Internet Explorer 6.x, 7.x, 8.x
ATTENTION: You will not be able to use our service without update from 18 of November 2009
Download :
Federal Reserve issues new rules restricting overdraft fees on debit cards
Next summer will bring big changes as banks will have to stop charging overdraft fees on debit and ATM card transactions without the permission of the cardholder.
Banks collect $25 billion to $38 billion every year from overdraft fees and transactions not covered by the new federal rules. That's serious money for consumers and the financial industry alike.
"The final overdraft rules represent an important step forward in consumer protection," said Fed Chairman Ben S. Bernanke in a statement. "Both new and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service."
Consumer advocates seem to favor the new rules, which will prevent banks from automatically enrolling debit card customers into "overdraft protection" programs that can prove quite costly. That's especially true if you think of them as loans. Indeed, given the average overdraft fee of $27 at banks, annual percentage rates can exceed 3,500%.
Edward L. Yingling, president of the American Bankers Association, said the changes would, “help bring consistency and clarity to overdraft programs.”
Congress has also jumped on the reform bandwagon. Sen. Chris Dodd, chairman of the Senate Banking Committee, introduced a proposal that would put a cap on the number of times banks can impose fees on an account in a particular month. The bill would also cover transaction made by check.
Some banks no longer accepting Form 8109
The U.S. Treasury is strongly encouraging customers to use online filing and payment systems to make their federal payroll tax payments. The treasury department is partnering with banks to encourage customers to use the online system. Beginning in October 2009, some banks will no longer accept form 8109 deposit coupons; effectively forcing customers to use the online system. Many state agencies are following the example of the treasury department by also moving to an online payment system.
QuickBooks Enhanced Payroll’s electronic file and pay service provides you the opportunity to keep pace with these trends. You can e-File and pay state and federal taxes to agencies directly from your QuickBooks software, at no additional cost. Just set up your QuickBooks for e-File and Pay and enroll with the taxing agency. Be sure to enroll in the federal program early, as the enrollment in the federal program may take up to approximately four weeks to process.
Using E-File & Pay provides you a convenient way to make payroll tax payments and file returns. With this option, you'll never have a payment or filing lost or delayed in the mail. E-File & Pay eliminates coupons, trips to the bank, and unwanted printouts to save you time and money. Our safe, secure 128-bit encryption technology keeps your information private so you never have to worry about your confidentiality.
New Rule for Single-Owner LLCs
Some businesses operating as limited liability companies (LLCs) may have to get a new employer identification number (EIN) for 2009.
This new rule applies to your LLC if you have been paying and reporting your employment taxes under your own Taxpayer ID number (your social security number). In the past, the IRS has permitted LLC owners who report their business income on Schedule C of their personal return, Form 1040, to also handle their employment taxes under their own names and taxpayer ID numbers. But the IRS has done an about-face and now says that these LLCs must pay and report employment taxes using the name of the LLC and its own EIN starting in 2009.
The new requirement involves employment taxes (FICA, FUTA and income tax withholding), not income taxes. If you have been reporting your LLC’s income and expenses on Schedule C of your Form 1040, you can continue to do so. Also, you don’t need a new EIN if you have been paying and reporting employment taxes under your LLC’s name all along.
If you need an EIN for your LLC, the quickest and easiest way to get one is to apply online at the IRS Internet website, http://www.irs.gov. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. Taxpayers can also quickly obtain an EIN by calling the IRS’s Business & Specialty Tax Line at (800) 829-4933. An IRS employee takes the information, assigns the EIN, and provides you with it over the telephone.
Economic Stimulus and Payroll Taxes
You may have heard how the economic stimulus package (the American Recovery and Reinvestment Act of 2009) recently enacted by Congress contains tax cuts for individuals. However, receiving less publicity is the fact that the new law provides important tax relief for businesses coping with the struggling economy as well as tax incentives to spur new business investments.
For example, the economic stimulus package—
- Extends a tax break enacted last year that allows more businesses to “expense”—write off immediately—the cost of equipment and machinery used in the business.
- Extends another break that permits businesses to claim increased first-year depreciation deductions for equipment and machinery that’s not eligible for expensing.
- Creates and expands energy-related tax incentives for businesses, including a new tax credit for businesses that manufacture energy-saving equipment.
- Reduces taxes for investors in qualifying small businesses if they hold on to their investments for at least five years.
- Provides a new tax break for businesses that hire unemployed veterans and young people.
- Makes it easier for a business to get a refund of prior taxes paid when it’s running a current operating loss.
- Defers the tax owed when a business’s debts are cancelled or settled for less than face value.
- Reduces the estimated tax payments that certain small businesses are required to pay.
Please contact us if you want to discuss what tax savings are available to your business under the new law.
Taking a Second Look at W-4s
It’s always prudent to do an annual review of your employee's Form W-4s. While such a review would typically take place at the end of the year, we now live in more complicated times. Developments since the beginning of 2009 may require withholding adjustments.
A year-end review of the W-4 would review the employee's tax situation and adjust withholding accordingly. For example, an employee may get married or divorced, the number of dependents may change, or the employee’s outside income may change. Depending on the situation, these changes may entitle the employee to fewer withholding allowances or additional allowances.
Even if employees participated in such a year-end review, a second look at their Form W-4s may be in order.
For Special Attention:
“Making Work Pay” Credit and Under-withholding
Employees with earned income are entitled to a refundable tax credit of up to $400 for individuals and up to $800 for marrieds filing joint returns. For employees who are wage earners, the credit will typically be reflected in their paychecks in the form of reduced withholding as a result of new automatic withholding changes that took effect on April 1. However, some employees may need to file a new Form W-4 to avoid under-withholding. For example:
- If an employee has two jobs, each employer’s withholding may reflect the maximum credit. Thus, the employee's combined withholding will be reduced by twice the maximum credit allowed—and he or she will be under-withheld.
- Under the new withholding changes, an employee's withholding will be reduced by roughly $600 during the remainder of the year if he or she files jointly. But if the employee’s spouse also is employed, the spouse’s withholding will be reduced by $600 as well. So the withholding changes will cut their withholding by a total of $1,200--$400 more than the maximum credit allowed.
- The Making Work Pay credit phases out for employees with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly. So working spouses who each earn $100,000 are generally not entitled to one dime of the credit, yet their withholding may be reduced by as much as $1,200 (see #2).
An employee's working child may also be under-withheld. An individual who can be claimed as a dependent on someone else’s return is not entitled to the Making Work Pay credit. However, the child’s employer does not take this into account and the child may be under-withheld by $400.
First-time Homebuyer Credit
If you purchase a principal residence between January 1, 2009 and December 1, 2009, you are entitled to a tax credit of up to $8,000 if you have not owned a principal residence during the three years prior to the purchase. The credit is reduced or eliminated for higher-income clients. For a married couple filing a joint return, the phase-out range is a modified adjusted gross income of $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.
You can claim the credit for a 2009 purchase on either the 2008 or 2009 return. Thus, you can cash in on the credit by claiming the credit on an amended (or original) 2008 return or by amending your Form W-4 to reduce 2009 withholding.
Note. The IRS says a you cannot claim the credit in anticipation of a purchase that will take place by December 1. According to the IRS, until a purchase is finalized, which for most purchasers occurs at the time of the closing, you do not qualify for the credit [First-Time Homebuyer Credit Questions and Answers at irs.gov]. Presumably this means that, not only are you ineligible to file an amended 2008 return before the closing, you also cannot change Form W-4 prior to closing.
Conference Coming Soon!
If you've never attended this informative one-day conference, I strongly encourage you to attend. The conference will help you avoid the costly pitfalls when operating your business and managing your employees. The topics are based on questions employers ask the Texas Workforce Commission. Topics include: Urban Legends of Texas Employment Lay and the Basics of Hiring, Texas and Federal Wage and Hour Laws, Employee Policy Handbooks: Creating Your Human Resources Roadmap, Employee Privacy Rights, Handling Employee Medical Issues and Unemployment Insurance: Stay in the Game and Win.
For more information go to:
Subscribe to Texas Business Today
If you haven't noticed, from time to time we reprint articles from Texas Business Today. Texas Business Today is provided to employers free of charge. If you wish to subscribe to this newsletter, please write to:
Commissioner Representing Employers
101 East 15th Street, Room 630
Austin, TX 78778-0001
New COBRA Amendments Require Immediate Attention
(Reprinted with permission Texas Business Today)
The American Recovery and Reinvenstment Act of 2009 (the federal "stimilus law") signed into law on February 17, 2009, includes a COBRA provision that can have a significant financial impact on covered employers.
COBRA applies if an employer has 20 or more employees and provides for continuation of health plan coverate for up to 18 months following the work separation. Until now, the employee who lost group coverage, not the employer, was required to pay the entire health insurance premium.
COBRA rights accrue once a "qualifying event" occurs--basically, a qualifying event in any change in the employment relationship that results in the loss of health plan benefits. COBRA does not apply if the employee was terminated for "gross misconduct," but the burden of proving that is on the employer. In the case of an employee with a spouse (make sure you are aware of the definition of "spouse" in all states in which you do business), it is essential that an employer notify both the employee and the employee's spouse of the employee's COBRA rights.
Effective February 17, 2009, amendments to the COBRA law require employers to subsidize the health benefit continuation payments during 2009, as outlined below:
Eligible individuals pay only 35 percent of their COBRA premiums, and the remaining 65 percent is paid by the employer and reimbursed via a federal tax credit.
The premium reduction applies to periods of health coverage beginning on or after February 17, 2009, and lasts for up to nine months.
To be "assistance eligible" under the amendments, the qualifying work separation needs to have occurred between September 1, 2008, and December 31, 2009.
The subsidy lasts for up to nine months, but the amendments do not extend the maximum COBRA continuation period. Coverage also ends if the former employee becomes eligible for Medicare, Medicaid, another plan, or a health flexible spending account. The subsidy covers medical, vision, and dental benefits, but does not cover medical flexible reimbursement plans.
For employers with fewer than 20 employees, the Texas "COBRA" law - the Small Employer Health Insurance Availability Act - would apply, and the same subsidies would apply to the payments made by the exemployee. This Act requires hialth benefit continuation rights for employees (and their beneficaries) of company health plans if the company and two to 50 employees; the state law is very similar to the federal law, but with a shorter benefit continuation period (up to six months following the qualifying event). If the employee had federal COBRA coverage as well, the six months under Texas law begins after the federal COBRA period expires. For more information, visit the Texas Department of Insurance Web site at http://www.tdi.state.tx.us/pubs/consumer/cb040.html.
This is a significant change in the law that's going to require quick action. It would be a very good idea to contact your insurance carrier, COBRA administrator, employment law attorney or human resources department immediately for detailed information about the new amendments and how they will affect your company.
New Hire Reporting can Benefit Employers
(Reprinted with permission Texas Business Today)
Since the passage of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, all employers are required to report certain information about newly-hired employees to a State Directory of New Hires within 20 days of the first day on the job. In Texas, that office is the New Hire Reporting Division of the Office of the Attorney General (OAG). While the initial rationale for the new hire reporting requirements was to improve the collection of child support, a number of other benefits have since occured.
In addition to enhanced collection of child support, the benefits of Texas employers reporting new hires include lower Unemployment Insurance contributions by returning overpayments of UI benefits to the Unemployment Compensation Trust Fund. Reporting new hires reduces government spending on public assistance. Reporting new hires assists state agencies such as the Texas Workforce Commission and the Texas Department of Insurance in detecting fraudulent claims and preventing overpayments.
There are six basic items employers must report within 20 days of the first day on the job for all new employees: company name, company federal employer identification number, employee name, employee address, employee social security number.
The OAG has made reporting convenient for Texas employers by offering several methods to report. These methods include: paper copy, by phone, by internet, by shareware program, by file transfer protocol, by an electronic file on diskette or tape.
Employers with multi-state operations may designate a single state to report all new hires, or they can choose to report in the individual states where they have employees. Companies choosing to designate a single state for new hire reporting requirements must notify the Secretary of the Department of Health and Human Services of their election by letter or fax.
There is a $25 per employee penalty for knowingly failing to report new hires, and a $500 per employee penalty for conspiring with new hires to fail to make the record.
Although Texas employers are reporting new hires in record numbers, the OAG has indicated that the current rate of compliance is at best 60 percent. OAG statistics indicate that the smaller the employer, the less likely they are to report their new hires as required by federal law.
In order to make new hire reporting an even bigger benefit, Texas employers are encouraged to comply with the requirement to report their new hires. By doing so, Texas employers can have a positive impact on lowering overpayments and fraud in the unemployment insurance system, which will ultimately help to lower employers' UI tax contributions.
Updates to QuickBooks Online Banking
I wanted to let you know about more improvements we've made to the Online Banking feature since the changes in December.
With the most recent QuickBooks update, you will be able to:
- Create transactions and perform other tasks in QuickBooks while you have Online Banking open
- Get faster performance for Online Banking (users with larger files will see the biggest improvements)
The latest information on Online Banking related updates can also be found at our Online Banking 2009 page. To see these updates in action, watch this short demo video.
How to get updates
You can get the update now as a download, or on March 26th, we will automatically update your QuickBooks.
To receive updates automatically, follow these instructions: - Go to the "Help Menu" in QuickBooks
- Select "Update QuickBooks"
- Then, go to the Options tab, select "Yes" for "Automatic Update"
Will the American Recovery and Reinvestment Act of 2009 Affect Your Business?
The answer is a resounding yes, the Act will affect small businesses in many ways, and employers need to stay up-to-date of the changes to take full advantage of the benefits and to be sure they are in compliance with the new laws. At Dove Bookkeeping Service we want all of our clients to be aware of the new laws and how they will affect your business and your bottom line.
If you have employees, please be sure to read about the changes and how they will affect how you process payroll.
50% Bonus Depreciation
The bonus depreciation on the cost of depreciable property is being extended through 2009. Also, the election to accelerate AMT and research credits in lieu of bonus depreciation has also been extended through 2009. Taxpayers who didn’t make the election in 2008 may elect to take it in 2009 and in subsequent taxable years.
Enhanced Small Business Expensing Extended into 2009
Small businesses can write off up to $250,000 in capital expenditures for the year. The write-off is reduced when equipment purchases for the year exceed $800,000.
Net Operating Loss Extended
The net operating loss carryback is extended from 2 to 5 taxable years before the loss arose. This only applies for the 2008 taxable year and only for small businesses with gross receipts of $15 million or less.
Reduction of Estimated Tax Payments for 2009
Self-employed individuals can avoid underpayment of estimated tax penalties by prepaying 90% of the current year’s tax liability (instead of 100% under the current safe harbor). The limit applies when an individual’s adjusted gross income for the preceding taxable year was less than $500,000, and the individual certifies that more than 50% of the gross income for the preceding tax year was from a small business.
Making Work Pay Credit
A credit is 6.2% of earned income will amount to an incremental decrease in federal withholding. The credit will be reduced, but not below zero, by 2% of modified adjusted gross income of $75,000 (150,000 if married filing jointly). Be prepared to calculate the tax credit on wages for the pay period and to reduce each employee’s federal withholding by the credit amount up to the annual limit of $400 ($800 for families). If you are using a QuickBooks Payroll Service, please update your payroll frequently while the changes are taking effect so your calculations will be current.
Temporary Increase in Earned Income Credit
Employees who claim the Earned Income Credit will be able to take a temporary increased credit. When Circular E becomes available, we’ll know more about the changes. Some employees will want to revise their 2009 W-5 once the new publication becomes available. Again, the best way to stay on top of the changes is to keep your payroll service updated.
IRS Pursuing Unpaid Employment Taxes
It has been decided by the IRS that the easiest way for them to help reduce the deficit is to go after unpaid employment taxes.
Employee Liability for the Alternative Minimum Tax
Federal withholding for the AMT patch and refundable first-time home buyer tax credits. Some of these changes may be reflected in 2009. We’ll know more when IRS publication 15 becomes available.
Unemployment
The new Unemployment Modernization rules give states a financial incentive to modify state unemployment laws to allow more workers to qualify for unemployment benefits. The more former workers who qualify for benefits, the more likely it is that your company will eventually pay a higher state unemployment rate.
COBRA Premium Subsidies
A new 65% federally funded COBRA continuation subsidy that lasts up to 9 months for workers and their families involuntarily terminated from Sept. 1, 2008 – Dec. 31, 2009. Because the new law allows employers to collect only 35% of the COBRA premium cost, monthly and quarterly depositors must advance 65% of the premium cost for each COBRA enrollee for as long as it takes to offset the amount due. When the subsidies add up to more than your company’s tax deposit, your company must request reimbursement from the US Treasury. We don’t know how long this reimbursement will take.
Hurricane Ike
For my dear client who swears the hurricane should have been named for me because I was after him for paperwork, and you know who you are, maybe next time you'll get your paperwork in on time!
Seriously, Ike tried to trip us up, but we managed to keep our services uninterrupted for our clients. I'm proud to say that all paychecks, sales tax payments, and employment tax payments were delivered on time! I owe a big heartfelt "thank you" to Chris and Krystal for standing in line for hours and hours to get us a generator so that we could maintain business as usual. I'm happy to say that things are now about as normal as they ever are around here. Our thoughts and prayers are with those who were not as fortunate as we were during the storm.
Order Forms Early!
Did you know that you can order IRS forms online? You can even order W-2, W-3, and 1099 forms to be delivered by mail. To order forms, click here
Order your Changes in Child Support Enforcement Rules
The Office of Child Support Enforcement has issued new regulations that require state child support guidelines address how parents will provide health care for children.
Carefully read each support order that comes in to see how health care is to be provided. If you have received a medical support order for an employee, and the employee either hasn't included the child in your company's health insurance or your company doesn't offer health insurance, your company will be responsible for making sure that the employee either obtains insurance for the child.
The new regulations will define the amount of medical support that must be paid for health insurance; including the cost of premiums when the other parent, Medicaed, or state health insurance programs provide the health insurance.
To read the complete version of the new regulations visit: Click here
Mileage Rate Increase as of July 1, 2008.
On July 1st the mileage rate for business mileage increased from 50.5 cents per mile to 58.5 cents per mile.
Federal Minimum Wage Increase
On July 24, 2008, the federal minimum wage increased to $6.55 for covered nonexempt employees.
Business Mileage Rates Increase
The new mileage rate has been increased from 48.5 cents per mile to 50.5 per mile.
Social Security Administration News
As of April 3, 2008, the Social Security administration has officially discontinued sending no-match letters to employers. No match letters state that an employee’s name and social security number do not match administration records. Additionally, until an employee corrects their records, the Social Security administration will not credit an employee’s account. The result of an account not being credited properly is that some worker’s may not qualify for benefits that they would otherwise have been qualified to receive.
I-9
The rules for verifying a new hire’s eligibility to work are still in effect. Please remember that it is the responsibility of the employer to verify a new hire’s right to work.
Gifts and Bonuses
I'm often asked if gifts such as Christmas or birthday presents, or Christmas bonuses are taxable. The answer is, it depends. Here's the rules:
- Nontaxable gifts include fruit baskets, wine, flowers, hams, turkey, occassional parties and company picnics.
- Taxable gifts include cash, gift certificates, bonuses, and many noncash items (taxed at fair market value).
NOTE:All cash bonuses and cash equivalents, such as gift certificates, are treated as wages and are subject to payroll taxes.
Example: Employee Jennifer is having a birthday, so you buy her bouquet of flowers. The flowers are not subject to employment taxes. On the other hand, if you give Jennifer a gift certificate to a local department store, it is taxable even if she buys a bouquet of flowers.
Printing Social Security Numbers On Paychecks
In an effort to avoid fraud and identity theft, Texas is considering making it illegal for employers to disclose employee social security numbers on paychecks or other employment-related documents.
QuickBooks allows employers to select the appropriate display option to comply with state rules for displaying employee social security numbers on paychecks and pay stubs using the following procedure:
1. In QuickBooks, go to the Edit menu and click Preferences.
2. Click the Payroll & Employees category in the list on the left.
3. Click the Company Preferences tab. (Note: Only the QuickBooks Administrator can change company-wide preferences).
4. Click Pay Stub & Voucher Printing (QuickBooks 2008 and 2007) or Printing Preferences (QuickBooks 2006 and 2005).
5. In the On Paycheck Vouchers and Paystubs, print section, choose the following options to select your printing preference:
o To mask/hide the entire social security number, clear the Employee Social Security number checkbox.
o To display only the last four digits of the employee's social security number, mark the Employee Social Security Number checkbox and mark the Select Only the last four digits of SSNs and bank accounts checkbox.
o To display the entire social security number, mark on the Employee Social Security Number checkbox.
6. Click OK to save your changes and close the Preferences window.
NOTE: If you choose to send your pay stubs by email, the stubs are sent as .pdf files that are NOT password protected. Anyone intercepting your email can view the information on your employee's pay stubs. With the Payroll Updates for QuickBooks 2008 and 2007 being released in mid-December, the .pdf files will automatically be password protected.
New Changes to Texas Sales Tax Law
House Bill 142 - Change of Location for Imposition of Transit Taxes.
Prior to this bill, transit sales and use taxes were due based on where the item was being delivered. Under this new bill, transit taxes will be due based on the location of the seller's place of business.
House Bill 3319 - Nonresidential Repair and Remodeling.
Effective September 1, 2007, all persons providing nonresidential repair and remodeling services must collect local sales and use taxes based on the location of the job site not the service provider's place of business.
House Bill 3319 - Repeals Previous Changes Under House Bill 2425.
Effective September 1, 2007, taxable service providers, unless an exception applies, should collect local taxes based on their place of business.This change doesn't affect waste removal services, cable TV services, amusement services, natural gas and electricity, nonresidential repair or remodeling services, contractors or telecommunications services.
For information on these changes and sales tax law in general, see publication 94-105, "Guidelines for Collecting Local Sales and Use Tax."