NPD Payroll wants to use this post to congratulate our client, Mitchell D. Weiss, on his recently published book Life Happens. The book will be available on Amazon, formatted for the Kindle Fire, Barnes & Noble, formatted for the Nook, and will soon be available on iBooks for the iPad. Postings of upcoming interviews with Weiss will be on the books website, as well as Facebook, Google+and Twitter. Weiss' blog posts can be found on his Tumblr.
Congratulations Mitchell on this exciting achievement!
You can find more information about Life Happens on Weiss' website: http://www.mitchelldweiss.com/
Thursday, January 26, 2012
Thursday, January 19, 2012
The Difference Between 1099s and W-2s
1099s and W-2s will be received in February, so it is important to understand ahead of time the difference between the two forms. The employee who receives a W-2 will have paid state and federal taxes through automatic deductions from their paycheck all year and the 1099 employee will have paid quarterly federal and state income tax payments themselves.
Here is a simple layout of the differences between 1099s and W-2s.
The W-2 Employee
The 1099 Employee
Here is a simple layout of the differences between 1099s and W-2s.
The W-2 Employee
- Is paid on an hourly or salaried basis.
- Has no pre-determined or agreed-upon end date to employment.
- Upon hiring, fills out a W4 form.
- Receives a W-2 tax form, which includes wages, tips and commissions earned by the employee in the previous year, as well as the total amounts paid to state, local and federal government(s).
The 1099 Employee
- Is hired on a contractual or project basis with an end date or agreed upon end to employment.
- Upon hiring, fills out a W9 form.
- Receives a 1099 tax form, which includes the total compensation that the employee received in the previous year without any payments to state, local and federal government(s).
- Is responsible for paying quarterly taxes throughout the previous year, which pay for state, local and federal tax responsibility.
- The 1099 form is also used to record prize money or royalties as a form of income that is subject to taxation.
Thursday, January 12, 2012
Taxpayer Checklist
In order for taxpayers to stay on top of their finances in 2012, it may be helpful to keep a tax check list.
The first priority should be to create an organized section to keep taxes and receipts. Use lots of labels, file folders, and drawers to keep the year's records.
Download a 2012 tax calendar online, complete with 2012 tax deadlines. Print it out, or keep it on the desktop of your computer.
If you have moved over the past year, make sure you have updated your address with everyone who is expected to send you tax documents.
If your name changed in 2011 from a marriage or divorce, you MUST remember to notify the Social Security Administration so you will be able to e-file your tax return under the new name.
Since Congress extended the 2% reduction of Social Security taxes from paychecks for only 2 months, consider filing a W-4 with your employer now and in March.
Remember you are still responsible for sending household employees their W-2s in January, even though the IRS offers a short cut for paying taxes for them.
Send out 1099-MISCs to anyone who was paid $600 or more for their services during the year.
The new 1099-K form is only for a banking related organization that settles payments related to merchant card transactions.
Make sure all medical refunds have been received if you did not spend enough money on medical care during the year. Turn in all receipts immediately, or contact your FSA administrator to find out if you have extra time.
Remember that January 17th is the 2011 estimated tax payments deadline!
Finally, make time to learn from your 2011 finances and make a list of improvements for 2012.
Read the full article here
The first priority should be to create an organized section to keep taxes and receipts. Use lots of labels, file folders, and drawers to keep the year's records.
Download a 2012 tax calendar online, complete with 2012 tax deadlines. Print it out, or keep it on the desktop of your computer.
If you have moved over the past year, make sure you have updated your address with everyone who is expected to send you tax documents.
If your name changed in 2011 from a marriage or divorce, you MUST remember to notify the Social Security Administration so you will be able to e-file your tax return under the new name.
Since Congress extended the 2% reduction of Social Security taxes from paychecks for only 2 months, consider filing a W-4 with your employer now and in March.
Remember you are still responsible for sending household employees their W-2s in January, even though the IRS offers a short cut for paying taxes for them.
Send out 1099-MISCs to anyone who was paid $600 or more for their services during the year.
The new 1099-K form is only for a banking related organization that settles payments related to merchant card transactions.
Make sure all medical refunds have been received if you did not spend enough money on medical care during the year. Turn in all receipts immediately, or contact your FSA administrator to find out if you have extra time.
Remember that January 17th is the 2011 estimated tax payments deadline!
Finally, make time to learn from your 2011 finances and make a list of improvements for 2012.
Read the full article here
Thursday, January 5, 2012
From the NPD Payroll Newsletter!
NPD Payroll wants to share with our readers a few 2012 reminders of important new tax laws.
Change to Social Security Taxable Wage Base for 2012Beginning on January 1, 2012, the taxable social security wage base will increase from $106,800.00 to $110,100.00 for each employee. All wages remain taxable for Medicare.
Bill Passed to Temporarily Extended Payroll Tax Cut regarding Employee Social Security Tax
The Employee contribution to Social Security will remain at 4.2% for January and February of 2012. Beginning March 1, 2012, the rate is scheduled to increase tp 6.2%, however there is a possibility of an extension through 2012.
New language is called to be inserted into the bill to protect employers:
Wages are subject only to the full 2012 wage base ($110,100) and without regard to the $18,350 cap (two-twelfths of the wage base of $110,100) on wages earned through the end of February, 2012.
If an employee's wages during the first two months of 2012 exceed $18,350, and the payroll tax reduction is not extended for the remainder of 2012, an amount equal to 2% of those excess wages would ultimately be recaptured on the worker's individual tax return 2012.
Att: Any employers with ANY service employees who employ 50 or more individuals CT NEW Paid Sick Leave Law beginning January 1,2012
This law has many provisions, so please refer to the CT Dept. of Labor website at http://www.ctdol.state.ct.us/wgwkstnd/SickLeave.htm .
Employers who are liable have:A business located in CT, 50 or more employees, and at least one service employee (please refer to DOL for definition of service employee). For liable employers, beginning January 1, al eligible service employees will receive one hour of paid sick leave time for every 40 hours worked. We STRONGLY encourage all liable employers to attend the next DOL seminar to learn about all of the intricacies of this new law to ensure compliance. Please refer to the CT DOL website for details on the law and next seminar (1/12/12). Please also feel free to reach out to NPD with further questions.
State Law Updates
January 1, 2012: Florida minimum wage rate of $7.31 per hour will increase to $7.67 per hour.
January 1, 2012: Arizona minimum wage rate of $7.35 per hour will increase to $7.65 per hour.
Minimum wage for CT will remain the same at $8.25 per hour for 2012.
401K Contributions
Contribution limits to a 401K in 2012 will increase by $500.00 to $17,000.00 annually. Catch-up contributions (age 50 or older at any point in 2012) will cap at $5,500.00 for the year, for a total of $22,500.00.
Standard Mileage Rates 2012
Standard Mileage Rates for use of a car (also vans, pickups or panel trucks) will remain at 55.5 cents per mile for business miles. Mileage rates for medical or moving purposes will be 23 cents per mile. Mileage rates for services of charitable organizations will be 14 cents per mile.
Please Note: 2012 CT and Federal W-4 now available
The new Connecticut W-4's for 2012 have been released by the Connecticut Department of Revenue. You can access these forms here: http://www.ct.gov/drs/lib/drs/forms/2012withholding/ct-w4.pdf , or by accessing "ct.gov/drs" and clicking "forms" at the top of the page. Then click "Businesses" and then "Withholding Tax: 2012 forms".
The new Federal W-4's for 2012 have been released by the IRS as well.
You can access these forms here: http://www.irs.gov/pub/irs-pdf/fw4.pdf .
Change to Social Security Taxable Wage Base for 2012Beginning on January 1, 2012, the taxable social security wage base will increase from $106,800.00 to $110,100.00 for each employee. All wages remain taxable for Medicare.
Bill Passed to Temporarily Extended Payroll Tax Cut regarding Employee Social Security Tax
The Employee contribution to Social Security will remain at 4.2% for January and February of 2012. Beginning March 1, 2012, the rate is scheduled to increase tp 6.2%, however there is a possibility of an extension through 2012.
New language is called to be inserted into the bill to protect employers:
Wages are subject only to the full 2012 wage base ($110,100) and without regard to the $18,350 cap (two-twelfths of the wage base of $110,100) on wages earned through the end of February, 2012.
If an employee's wages during the first two months of 2012 exceed $18,350, and the payroll tax reduction is not extended for the remainder of 2012, an amount equal to 2% of those excess wages would ultimately be recaptured on the worker's individual tax return 2012.
Att: Any employers with ANY service employees who employ 50 or more individuals CT NEW Paid Sick Leave Law beginning January 1,2012
This law has many provisions, so please refer to the CT Dept. of Labor website at http://www.ctdol.state.ct.us/wgwkstnd/SickLeave.htm .
Employers who are liable have:A business located in CT, 50 or more employees, and at least one service employee (please refer to DOL for definition of service employee). For liable employers, beginning January 1, al eligible service employees will receive one hour of paid sick leave time for every 40 hours worked. We STRONGLY encourage all liable employers to attend the next DOL seminar to learn about all of the intricacies of this new law to ensure compliance. Please refer to the CT DOL website for details on the law and next seminar (1/12/12). Please also feel free to reach out to NPD with further questions.
State Law Updates
January 1, 2012: Florida minimum wage rate of $7.31 per hour will increase to $7.67 per hour.
January 1, 2012: Arizona minimum wage rate of $7.35 per hour will increase to $7.65 per hour.
Minimum wage for CT will remain the same at $8.25 per hour for 2012.
401K Contributions
Contribution limits to a 401K in 2012 will increase by $500.00 to $17,000.00 annually. Catch-up contributions (age 50 or older at any point in 2012) will cap at $5,500.00 for the year, for a total of $22,500.00.
Standard Mileage Rates 2012
Standard Mileage Rates for use of a car (also vans, pickups or panel trucks) will remain at 55.5 cents per mile for business miles. Mileage rates for medical or moving purposes will be 23 cents per mile. Mileage rates for services of charitable organizations will be 14 cents per mile.
Please Note: 2012 CT and Federal W-4 now available
The new Connecticut W-4's for 2012 have been released by the Connecticut Department of Revenue. You can access these forms here: http://www.ct.gov/drs/lib/drs/forms/2012withholding/ct-w4.pdf , or by accessing "ct.gov/drs" and clicking "forms" at the top of the page. Then click "Businesses" and then "Withholding Tax: 2012 forms".
The new Federal W-4's for 2012 have been released by the IRS as well.
You can access these forms here: http://www.irs.gov/pub/irs-pdf/fw4.pdf .
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