Ineffective payroll management and shoddy payroll systems can result in personal liability (including JAIL TIME) for non-compliance.
Business Management Daily helps our readers with information on payroll processing and tips on timesheets that will help you to implement payroll programs that pay off.
Anita Bartels, senior program analyst for employment tax policy at the IRS, spoke about the IRS’ latest initiatives to attendees at the American Payroll Association’s 31st Annual Congress, held this year in Grapevine, Texas.
Q: We purchased some technology from another company and the deal included the transfer of some employees. Since we didn’t buy the entire company, can Payroll carry over their FICA and FUTA wages?
Question: What are the tax guidelines for executive bonuses payments? I need to calculate the withholding on them manually.
Under the IRS’ Voluntary Classification Settlement Program, you can voluntarily reclassify independent contractors as employees for future tax periods on favorable tax terms: you’ll be liable for just over 10% of the wages paid to those reclassified workers for the past year and no penalties or interest will be due. Recently updated FAQs shed more light on this program.
Employees who are exempt from the FLSA need only be paid a proportionate amount of their full, weekly salary for their first and last weeks of work if they begin or terminate employment work midweek. A federal trial court has ruled that employers have a great deal of discretion when figuring this proportionate amount.
You can’t hire a third party, like a payroll service bureau, to handle your payroll unless you sign Form 8655, Reporting Agent Authorization. Along with that form, the reporting agent may also ask you to sign Form 8821, Tax Information Authorization. Caution: Don’t sign forms blindly.
Q: Does the authorization that appears in Part 4 of Form 941 apply only to the specific form being filed, or to all returns filed during the tax year? We want to determine if this section must be completed on each return, even if none of the information changes.
Q: When does the employer/employee relationship begin? My boss believes that relocation expenses don’t need to be reported on a W-2 form because they’re paid before an employee begins working.
In late 2012, the NLRB ruled in an unfair labor practice case that when lump-sum back pay awards span more than one year, the employer must report the awards to the Social Security Administration and reimburse employees for the excess federal and state income taxes that are attributable to those awards.
If you’re tempted to say that to the teenagers in your house, and thankful that someone else will be employing them this summer, remember that somewhere out there other parents are saying the very same thing to their teens. And you may end up employing them.