Online Payroll With Time Tracking

Intuit Online Payroll now provides the ability for your employees to enter their own time sheets and review their pay stubs online.  I'd be happy to discuss your payroll needs and the many options available.  Do you want an online system that you run?  I can help you with that.  Do you want me to just make it happen for you?  I can do that, too! Here's some of the benefits to online time tracking.

Save time and reduce costly errors by allowing your employees to track their own hours online and eliminate double input. It can be a real pain to track employee hours and re-enter the data, especially when you have to follow complicated overtime rules. ✔ Reduce costly errors by automatically calculating total hours worked (including overtime) ✔ Reduce compliance risks by applying state and federal overtime and double time rules ✔ Save valuable time eliminating double input by allowing employees to enter their own hours online ✔ Fully integrated with payroll so you never have to calculate or re-enter hours ✔ Easily review and adjust hours to fix employee mistakes ✔ Automatic Email Reminders to employees when timesheets are due ✔ Flexible options        – Online timesheets on a password protected website          and/or       – Multi-user online time clock where employees can clock              in and out

1099-MISC Filing Changes for 2011 Tax Year

The IRS issued new reporting regulations for tax year 2011 1099-MISC form. These regulations will exclude some forms of payments from the 1099-MISC form; instead, the payments will be reported on the new third party form 1099-K.

If you have made payments to vendors in tax year 2011 using only cash or checks, this one does NOT apply to you. If, however, you used other forms of payment (credit/debit cards and third-party payment services like PayPal), you will need to report certain types of transactions and exclude others.  Only cash and check payments to vendors requiring a 1099 will need to be included on the 1099-MISC that you send.  The credit card companies and other payment processors like PayPal will be required to send the other amounts to your vendor on a 1099-K. 

The most common types of payments required to be reported on a 1099 are for rents and services. These are required to be reported to any unincorporated recipient who is paid at least $600 during the calendar year.   This has not changed. 

Intuit® is aware of these compliance changes and has updated the 1099 Wizard in QuickBooks® for Windows 2012 and QuickBooks for Mac 2012 to include payment exclusion features to comply with the 1099-MISC regulation changes. In addition, Intuit has developed other solutions for customers on prior year, supported versions of QuickBooks. This includes the availability of the QuickBooks 1099 Assistant, a downloadable application designed specifically for QuickBooks 2009-2011 Windows and QuickBooks 2010 – 2011 Mac customers. You can get the QuickBooks 1099 Assistant for Windows here and for Mac here.

If you are personally in a trade or business that is reported on a Schedule C (Profit or Loss From Business) or Schedule F (Profit or Loss From Farming) on your individual tax return, you will notice that you will be required to answer two new questions: 

(1) Did you make any payments in 2011 that would require you to file Form(s) 1099?

(2) If “yes,” did you or will you file all required Forms 1099?

You are required to provide the recipients a 1099 on or before January 31, 2012. If you file the 1099s electronically to the IRS, they are due on or before April 2, 2012. 

Let me know if I can help in producing your 1099's.  Please discuss any IRS requirements that you are unsure of with your accountant. 

The information in this post was adapted from an article written by Jennifer Roop and from a newsletter produce by the accounting firm of  Carr, Riggs & Ingram.

Declutter and Start Fresh

Happy New Year!  Wishing you a 2012 full of possibility.  If your new year's goals include financial organization, the filing cabinet may be part of that goal.  What to keep?  What can you chunk?  The University of Illinois Extension put together information on what you need to keep and for how long.  They have tips on receipts, statements, medical records, investments and others.  Review their guidelines here.  For the ultimate authority, although not quite as fun to read, check with the IRS.  Their publication 552, Recordkeeping for Individuals is here. I'm available to help with those financial organization goals.  We can wrap up 2011 and make a good start on 2012 with accurate QuickBooks/Quicken accounting!

Continuation of the Payroll Tax Cut

Bottom Line.  The employee side reduction in FICA from 6.2% to 4.2% continues for the first two months of 2012 and all year up to $18,350  in income for self employed individuals.  Found Time Payroll Processing. We will handle these changes automatically in your payroll. If you have any questions about the two-month extension of the payroll tax cut, please contact us. The details.  At the eleventh hour, Congress approved a two-month extension of the employee-side payroll tax cut in the Temporary Payroll Tax Cut Continuation Act of 2011. The two-month extension, for January and February 2012, is intended to give lawmakers additional time to negotiate a full-year extension of the payroll tax cut through the end of 2012. OASDI tax rate. Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program and Medicare's Hospital Insurance (HI) program are financed primarily by employment taxes. Prior to 2011, the OASDI tax rate was 6.2 percent for employees and employers, each; and the OASDI tax rate for self-employment income was 12.4 percent.
OASDI limits the amount of earnings subject to taxation for a given year. This limit changes each year with changes in the national average wage index. For 2011, the OASDI wage base was $106,800. The OASDI wage base is $110,100 for 2012. There is no limitation on HI-taxable earnings.
2011 temporary reduction. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced, for wages and salaries paid in 2011 and self-employment income in 2011, the OASDI tax by two percentage points, applied to the portion of the tax paid by the employee and the self-employed individual (4.2 percent and 10.4 percent, respectively). The employee-side payroll tax cut under the 2010 Tax Relief Act was scheduled to expire after December 31, 2011.
Two-month extension. On December 23, 2011, Congress approved and President Obama signed a two-month extension of the employee-side payroll tax cut. The Temporary Payroll Tax Cut Continuation Act of 2011 extends the two percentage point employee-side payroll tax cut through the end of February 2012. Recapture. Shortly after President Obama signed the Temporary Payroll Tax Cut Continuation Act, the IRS explained that the new law includes a recapture provision, which applies to individuals who receive more than $18,350 during the two-month extension period. The OASDI wage base for 2012 is $110,100, and $18,350 represents two-months of the full-year amount. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. The House Ways and Means Committee reported that the recapture provision will only apply if the payroll tax reduction is not extended for the remainder of 2012.
Implementation. The IRS instructed employers to implement the reduced payroll tax rate as soon as possible in 2012 but no later than January 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in employees' pay as soon as possible but no later than March 31, 2012, the IRS advised.