Payroll Tax Cut Doesn’t Mean More Money for All Taxpayers   The deadline has passed for employers to adjust their payroll systems and lower the rate on Social Security payroll taxes to 4.2 percent from 6.2 percent. Employers have until March 31 to adjust checks to give back any excess amounts to employees that have been withheld this year.   However, taxpayers who make less than $20,000 a year will actually see a tax hike. For example, an employee who makes $15,000 a year will pay $100 more in taxes this year, compared to 2010. A joint tax return will mean paying $500 more. The reason is that the payroll tax cut comes at the exact same time the Making Work Pay tax credit expires. As part of the economic stimulus plan, the credit took a flat $400 off federal withholding taxes to single filers and $800 to joint filers. Since the new payroll tax cut is only based on a percentage of earnings, employees who do not make a lot of money will not see much savings.   On the other hand, people wi ...

Payroll Tax Cut Proposed A senator from Ohio has proposed a major payroll tax cut for employers. Republican Rob Portman proposed a one-year, two-percentage-point reduction in payroll taxes that are paid by employers. The senator says he backs the payroll-tax reduction already in place for employees, but believes giving employers the same break is fair and would help create jobs (possibly 1.4 million a year in the U.S.).   The cost would be $110 billion. Portman maintains the price tag on the bill would be more than offset by getting rid of the healthcare law’s mandate for people to buy insurance. He contends the bill would actually reduce the federal deficit by $85 billion.   The Congressional Budget Office says the savings from repealing the mandate would result in a rise in the number of uninsured Americans (to 39 million in 2019, from the 23 million projected under the current law).   Modern Business Associates is an HR company that focuses on payroll and HR outsourcing.&nbs ...

  Federal W 9 Form   What is the Federal W 9 Form?   When you utilize contract workers, like subcontractors or freelancers, they will need to complete a Federal W 9 form and send it to you. This lets your accountant have the correct information needed to complete a 1099 for the outsource is needed.   You should request a Federal W 9 Form from your:: Independent Contractors Freelancers Any outsource that works for themselves   Request a W 8 form instead, for independent contractors who are not U.S. citizens.   It doesn’t hurt to collect a Federal W 9 Form from all your independent outsources, but to save time, you really only need to collect them for ones you pay $600 or more over the course of the year.   The form is quick to complete and basically asks for the person’s name, address and Social Security number. The contractor may substitute their company Employer Identification Number (EIN) if they have one.   Note that the Federal W 9 ...

IRS Tax Form Instructions Form 1040 Basics Helpful IRS Tax Form Instruction Information Taxes! It’s a word no-one likes to hear—but something we all have to pay. IRS tax form instructions are available online and will help make the process as painless as possible when it’s that time of the year.  There is some basic knowledge to keep in mind that will help you when looking for IRS tax form instructions. IRS tax forms are used by tax-exempt organizations and taxpayers to report financial information to the IRS. They are used to report income and calculate the taxes that need to be paid to the United States.   Form 1040 Basics   The most well-known and widely filed form is the Form 1040. This form is used for individual income taxes. It is used for personal income tax returns filed with the IRS. The first form was published for use in 1913. Any full-time United States resident can use the Form 1040 (also referred to as the “long form”). People with no ...

Important Information: Deadline for Employers to Adjust Withholdings to the IRS is Jan. 31   With the New Year, businesses began adhering to a new withholding schedule for employee’s wages that replicates a cut in federal payroll taxes for 2011. In an effort to motivate spending and increase take-home pay, this law gives a two percentage point payroll tax cut for employees through 2011. This change was part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. As a result, millions of workers will see an increase in the money they bring home this year.   The Internal Revenue Service realizes businesses did not have much time to implement the changes (which were released in December 2010), so it asks employers to adjust their payroll systems to the new Federal withholding tables by January 31.   The IRS advises Social Security taxes over-withheld during the month of January to be adjusted in employee pay as soon as possible—but by no later than Mar ...