Payroll tax

Tax

Business Tax Index 2008 ranks state tax systems

With April 15, "Tax Day," just behind us, the Small Business & Entrepreneurship Council (SBE Council) has published the "Business Tax Index 2008: Best to Worst State Tax Systems for Entrepreneurship and Small Business," ranking the states according to the costs of their tax systems for small business start up and growth.SBE Council President & CEO Karen Kerrigan said, "Entrepreneurs and small businesses have to struggle every day with the costs of taxation, which affect a wide array of decisions, including hiring, investment, expansion, and location.
Tax

IRS requests comments and input on new Form 941X

The IRS is looking for stakeholder input on a new form and process, planned to begin in 2009, that will improve the way employers and payers correct errors on previously filed employment tax returns.The agency has posted a "vision draft" of new Form 941X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, for public review.
Tax

Defining independent contractors

With growing acceptance of flexible work arrangements among large and small employers, many, including seasonal employers, are increasing their contingent hiring to meet the peaks and valleys of demand. A 2007 Staffing Buyers Survey estimates that the contingent workforce will grow to 10 percent of all U.S. workers in two years, CCH reports. Classifying contingent workers as independent contractors benefits employers because it reduces recruiting and training costs, CCH says.
Tax

IRS issues new Social Security form for misclassified workers

The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by an employer. Form 8919, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee's share of uncollected social security and Medicare taxes due on his or her compensation.Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit, using Schedule SE.
Practice Management

New rules proposed for auto enrollment 401(k) plans

While the Internal Revenue Service has decided to keep the limit of total employee contributions to 401(k) plans at $15,500 for traditional plans and $10,500 for SIMPLE plans for 2008, the agency has proposed rules changes to the optional safe harbor 401(k) plans that provide for automatic enrollment, CCH reports.
Practice

Making wage reporting profitable

Reduce labor. Reduce time. Reduce costs.Time vs. MoneyAs with most business decisions, there are often two prominent variables in wage reporting: time and money.There are many software programs that will help you increase efficiency and decrease time this tax season, but what are the tradeoffs? Is it worth a few extra dollars to keep your sanity intact? With the hectic pace of business today, can you afford not to reduce the time you spend on tedious tasks? These are good questions that deserve some attention.
Tax

IRS teams with states to share employment tax information

Officials from the Internal Revenue Service and more than two dozen state workforce agencies have announced they have entered into agreements to share the results of employment tax examinations.The agreements, part of the Questionable Employment Tax Practice (QETP) initiative, provide a centralized, uniform means for the IRS and state employment officials to exchange data, thereby leveraging resources and encouraging businesses to comply with federal and state employment tax requirements.So far, 29 states have entered into individual information-sharing agreements with the IRS.
Tax

IRS offers tax relief to California wildfire victims

The Internal Revenue Service has extended relief to California wildfire victims by extending tax return filing and payment deadlines.Taxpayers in the Presidential Disaster Area – consisting of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura counties – will have until Jan. 31, 2008, to file returns, pay taxes, and perform other time-sensitive acts that have a deadline that falls between October 21, 2007 and January 31, 2008. This includes the federal withholding tax return, Form 941, normally due Oct.
Tax

Social Security raises wage ceiling, increases benefits

Effective January 1, 2008, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $102,000 from $97,500. Of the estimated 164 million workers who will pay Social Security taxes in 2008, nearly 12 million will pay higher taxes as a result of the increase in the taxable maximum.The Social Security Administration also announced that monthly Social Security and Supplemental Security Income benefits for more than 54 million Americans will increase 2.3 percent in 2008.

Survey: Two-thirds who call in sick aren't really ill

A new survey suggests that U.S.
A&A

Tax pitfalls you could face as a small business owner

AccountingWEB is pleased to offer a presentation of Small Business Trends Radio. This is an hour-long broadcast that can be downloaded as a podcast or played on your computer.Starting your own small business can be an exciting venture. However, there are several things that many do not think about in advance that could put them out of business before they have barely begun. And attempting to handle some of these problems on your own may ultimately lead to negative results.Michael Rozbruch, CEO of Tax Resolution Services will assist you in steering clear of these costly pitfalls.
A&A

Setting up payroll in a small business

For a small business with new employees, the process of setting up a new payroll system can be daunting. By breaking down the process into small steps, the process can go smoothly, employees will get their paychecks on time, and tax filing deadlines will be met with ease.Step 1: Obtain a federal identification number from the Internal Revenue Service and a state identification number from your state revenue department.
Tax

Businesses applaud elimination of cross-border withholding tax

Canada and the United States have signed a new treaty designed to reduce barriers to cross-border activities. The treaty eliminates the withholding tax on cross-border interest payments made by borrowers in one country to lenders in the other, and updates tax rules on pensions for workers who cross the U.S. - Canada border, according to Treasury Secretary Henry M. Paulson, Jr.The new treaty is seen as providing the most benefit to Canadian companies that borrow from U.S. banks. Many U.S.

Social Security reform takes one step forward

The Treasury is studying reform methods to make the Social Security system sound.
Tax

Food and beverage employers should note rule changes for 45B credit

The IRS has issued an announcement to employers that they should be aware of two changes to the credit for the portion of employer Social Security paid with respect to employee cash tips known as the 45B Credit. These changes are the result of recently enacted legislation.The law now requires employers to determine their credit using the minimum wage in effect on January 1, 2007, even if the minimum wage increases.
Tax

New deferred-compensation rules will not affect teachers until 2008

Moving to clear up confusion about a recent tax law change, the Internal Revenue Service today reassured teachers and other school employees that new deferred-compensation rules will not affect the way their pay is taxed during the upcoming school year.Recently, the IRS has received inquiries from teachers who had been told that they had to make certain decisions about their pay, this month, or risk severe penalties. At issue is a 2004 law change that applies to people who decide to defer compensation from one year to a future year.
Tax

Section 403(b) retirement plan rules finalized

The Treasury Department and the IRS have released final regulations related to retirement savings arrangements sponsored by public schools and charitable organizations, often referred to as "section 403(b) plans." These regulations are the first comprehensive section 403(b) regulations since 1964.
Tax

Issues Spouse-owned Businesses Should Consider

One of the advantages of operating your own business is hiring family members. However, the employment tax requirements for family employees may vary from those that apply to other employees. How Spouses Earn Social Security BenefitsA spouse is considered an employee if there is an employer/employee type of relationship, i.e., the first spouse substantially controls the business in terms of management decisions and the second spouse is under the direction and control of the first spouse.
Tax

Effects of Accrued Payroll Tax Liability Rulings

New court rulings state payroll tax liability is deductible even if compensation is deferred under Sec. 404, reports The Tax Adviser.A recent ruling states that accrual-method taxpayers may deduct payroll tax liability incurred in the current year, for compensation deferred and deductible in the following year, under Sec. 404, provided the all-events test and recurring-item exception of Sec. 461 are met.FactsX, a corporation, uses an accrual method of accounting and files its Federal income tax returns on a calendar-year basis.
Tax

Social Security: A Perennial Election Issue

With just two weeks until the Nov. 7 congressional elections, President Bush called Social Security reform one of the “big items” he wants to tackle next year, sparking debate among politicians on both sides.Bush said that he believes “that a worker, at his or her option, ought to be allowed to put some of their own money . . . in a private savings account, an account that they call their own,” according to the Washington Post.Democrats jumped on the comment as a chance to remind voters that his reform ideas never made it to the legislative stage because they were so unpopular.

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