Posts Tagged ‘Payroll’
What’s New in Form 940 (FUTA) for 2011
The expiration of the Federal Unemployment Tax Act (FUTA) surtax in June 2011 means you’ll see some changes on the 2011 Form 940 when you file it in January. In addition, there are 21 states subject to FUTA credit reduction. The IRS has posted Form 940 and Schedule A (Form 940) for 2011 so you can see the changes.
How To Figure Overtime Pay When a Worker Has Two Rates of Pay
Generally, for nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay at a rate of not less than one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. This is pretty easy to calculate when a worker receives the same rate of pay for all work, but what do you do when a worker has two rates of pay? Or is paid a portion of pay is hourly per hours worked and a portion of pay is piece work?
Some Payroll Tax Deadlines Extended to April 18th
The IRS has extended the deadline for all tax forms and payments that would normally be due on Friday, April 15, 2011 until Monday, April 18, because April 15 (Emancipation Day) is a legal holiday in the District of Columbia (see Notice 2011-17, 2011-10 IRB 540). The extended deadline means that semi-weekly depositors have until April 18 to make their federal payroll tax deposit for amounts withheld between April 9 and April 12. In addition, monthly depositors have until April 18 to deposit their March withholding taxes.
Changes in 941 and W-2 Forms
To reflect changes in the employee rate for social security and the elimination of advance payment of the Earned Income Credit*, there have been big changes to form 941, Employer’s QUARTERLY Federal Tax Return. Form W-2, Wage and Tax Statement, now includes a new code for reporting designated Roth contributions under a governmental section 457(b) plan.
But the IRS will no longer send you forms or instructions in the mail.
With the increased emphasis on e-filing, the IRS has been implementing plans to stop mailing tax packages to business taxpayers. Last fall, the IRS announced it would no longer mail annual income tax returns to businesses. In early March, the IRS added several forms and instructions to the list of discontinued mailings, most notably the Form 941, Employer’s QUARTERLY Federal Tax Return.
*EIC-eligible individuals can claim their credit when they file their 2011 federal income tax returns. Employees who expect to be eligible for the EIC and who will have income tax withheld from their wages in 2011 may reduce their withholding. This option allows those employees to receive a portion of the credit throughout the year.
Paper Tax Deposit Coupons – Going, Going, Gone
If you make payroll tax deposits for your small business at your bank using paper coupons you need to know that you will no longer be able to do so after December 31, 2010. Internal Revenue Service regulation (REG 153340-09) generally maintains existing rules for depositing federal taxes through the Electronic Federal Tax Payment System (EFTPS). The paper coupon system will no longer be maintained by the Treasury Department after Dec. 31, 2010.
Using EFTPS to make federal tax deposits provides substantial benefits to both taxpayers and the government. EFTPS users can make tax payments 24 hours a day, seven days a week from home or the office.
Deposits can be made online with a computer or by telephone. EFTPS also significantly reduces payment-related errors that could result in a penalty. The system helps taxpayers schedule dates to make payments even when they are out of town or on vacation when a payment is due. EFTPS business users can schedule payments up to 120 days in advance of the desired payment date.
Information on EFTPS, including how to enroll, can be found at www.eftps.gov or by calling EFTPS Customer Service at 1-800-555-4477.
Some businesses paying a minimal amount of tax may make their payments with the related tax return, instead of using EFTPS. More details regarding taxes required to be deposited using EFTPS, dollar thresholds and other specific requirements are in the proposed regulations.
Additional Information:
- Publication 4132, which explains the process of enrolling and paying via the Internet
- Publication 966, The Secure Way to Pay Your Federal Taxes for Businesses and Individuals
- Publication 4169, Tax Professional Guide to Electronic Federal Tax Payment System
- Publication 4320, EFTPS Toolkit, which contains PDF(s) and descriptions of EFTPS educational materials and their intended target audience, and is for use by tax professionals and financial institutions to assist in educating their clients on the benefits of EFTPS.
- Publication 4275, Express Enrollment for New Businesses
- Electronic Payment Options Home Page
