Vision Payroll

The Internal Revenue Service (IRS) has released a draft of a new form, Form 8822-B, Change of Address—Business. The new form will be used to notify the IRS if you changed your business mailing address or your business location.

IRS Uses USPS National Change of Address Database

The IRS automatically updates your address of record based on any new address you provide the US Postal Service (USPS). The IRS uses the information in the USPS’s National Change of Address database. The IRS also automatically updates your address of record when the USPS changes your address because of a new Zip Code boundary or other administrative reason. IRS notices or documents sent to a taxpayer’s “last known address,” are legally effective even if the taxpayer never receives it.

Form 8822-B Will Have a Signature Requirement

An officer, owner, general partner or LLC member manager, plan administrator, fiduciary, or an authorized representative will be required to sign Form 8822-B. An officer is the president, vice president, treasurer, chief accounting officer, etc. A representative signing on behalf of the taxpayer must attach to Form 8822-B a copy of Form 2848. The IRS will not complete an address change from an “unauthorized” third party.

Contact Vision Payroll Today

Clients should be sure to inform Vision Payroll of any address changes so that tax returns are filed using the correct address.

In Revenue Ruling 2011-29, the Internal Revenue Service (IRS) ruled that a taxpayer can establish the “fact of the liability” under §461 for bonuses payable to a group of employees even though the employer does not know the identity of any particular bonus recipient and the amount payable to that recipient until after the end of the taxable year.

Bonus Deductibility a Three-Prong Test

For accrual-basis taxpayers, a liability is incurred, and is generally taken into account for federal income tax purposes, in the taxable year in which:

1. All the events have occurred that establish the fact of the liability,
2. The amount of the liability can be determined with reasonable accuracy, and
3. Economic performance has occurred for the liability (collectively, the “all events test”).

Rev. Rul. 2011-29 Addresses First Prong Only

Revenue Ruling 2011-29 addresses only whether the first prong of the all events test is met. The first prong of the all events test requires that all the events have occurred that establish the fact of the liability. Generally, all events occur to establish the fact of a liability when:

1. The event fixing the liability, whether that be the required performance or other event, occurs, or
2. Payment is unconditionally due.

Liability Is Established by the End of the Tax Year

Under the employer’s plan, its liability to pay a minimum amount of bonuses to the group of eligible employees is fixed at the end of the year in which the services are rendered. The employer is obligated under the program to pay to the group the minimum amount of bonuses determined by the end of the taxable year. Any bonus allocable to an employee who is not employed on the date on which bonuses are paid is reallocated to other eligible employees. Thus, the fact of the employer’s liability for the minimum amount of bonuses is established by the end of the year in which the services are rendered.

Employers Should Consult Their Tax Advisors

Vision Payroll recommends that employers consult their tax advisor with questions as to the deductibility of bonuses in a year other than when they are paid.

According to statistics released by the US Bureau of Labor Statistics (BLS), in October 2011, the percentage of people with disabilities in the labor force was 21.3, up from 21.1 in September. By comparison, the percentage of persons with no disability in the labor force was 69.6, down from 69.7 in September.

Unemployment Rate at 13.2%

The unemployment rate for those with disabilities was 13.2%, compared with 8.3% for persons with no disability, not seasonally adjusted. These rates are down from the September rates of 16.1% and 8.5%, respectively.

Table A-6 Provides Further Details on Employment Levels by Disability Status

Table A-6 shows further details on the employment status of the civilian population by sex, age, and disability status, not seasonally adjusted.

Definition of a Person with a Disability

In compiling the data, the BLS defines a person with a disability as a person having at least one of the following conditions: is deaf or has serious difficulty hearing; is blind or has serious difficulty seeing even when wearing glasses; has serious difficulty concentrating, remembering, or making decisions because of a physical, mental, or emotional condition; has serious difficulty walking or climbing stairs; has difficulty dressing or bathing; or has difficulty doing errands alone such as visiting a doctor’s office or shopping because of a physical, mental, or emotional condition.

Visit VisionPayroll.com Monthly for Updated Disability Employment Statistics

Each month, Vision Payroll will provide updated disability employment statistics as they become available.

This week’s question comes from Brad, a company owner.

Brad asks:

I recently received a notice from the IRS. Why did I receive a notice titled “Your 2012 Federal Tax Deposit Requirements for Form 941”?

Answer: The Internal Revenue Service (IRS) sends this notice to employers who have a change in deposit frequency.

Employers May Have One of Two Deposit Frequencies

Employers may have one of two deposit frequencies assigned. The first frequency is a semi-weekly frequency assigned to employers who had a tax liability of more than $50,000 during the lookback period. The second frequency is a monthly frequency assigned to employers who had a tax liability of $50,000 or less during the lookback period. For 2012, the lookback period is the period from July 1, 2010 to June 30, 2011.

Semi-Weekly Depositors Have Two Due Dates per Week

Employers assigned a semi-weekly deposit frequency generally must deposit taxes on one a two days each week. Any taxes accumulated for wages paid Saturday, Sunday, Monday, or Tuesday are due on Friday of that week and taxes accumulated for wages paid Wednesday, Thursday, or Friday are due Wednesday of the following week. Holidays or special rules may change those due dates.

Monthly Depositors Have One Due Date per Month

Employers assigned a monthly deposit frequency must deposit taxes accumulated for wages paid during a calendar month by the fifteenth of the following month. Weekends, holidays or special rules may change those due dates.

Weekends and Holidays Extend Due Date

If a due date falls on a weekend or a legal holiday in the District of Columbia, it extends the due date until the next day that is not a weekend or a legal holiday in the District of Columbia.

$100,000 Next-Day Deposit Rule May Apply

For taxpayers with a semi-weekly deposit frequency, if the total accumulated liability reaches $100,000 during any semi-weekly period, that deposit is due the next business day. For taxpayers with a monthly deposit frequency, if the total accumulated liability reaches $100,000 during any monthly period, that deposit is due the next business day. In addition, taxpayers with a monthly deposit frequency who accumulate a liability of $100,000 during a calendar month must deposit using the semi-weekly deposit rules for the remainder of that calendar year, unless the $2,500 rule applies.

$2,500 Rule May Reduce Deposit Frequency

Employers may pay their tax liability when filing Form 941 if their total Form 941 tax liability for either the current quarter or the preceding quarter is less than $2,500 and they did not incur a $100,000 next day obligation during the current quarter.

Vision Payroll Will Make Tax Deposits Following These Rules

Subscribers to Vision Payroll’s Tax Pay and File Service will have their taxes deposited by Vision Payroll in accordance with the above rules.

Nonfarm payroll employment continued to trend up in October (+80,000), and the unemployment rate was little changed at 9.0%, the US Bureau of Labor Statistics reported today. Employment in the private sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining. Government employment continued to trend down.

Household Survey Data

Both the number of unemployed persons (13.9 million) and the unemployment rate (9.0%) changed little over the month. The unemployment rate has remained in a narrow range from 9.0 to 9.2% since April.

Among the major worker groups, the unemployment rate declined for blacks (15.1%) in October, while the rates for adult men (8.8%), adult women (8.0%), teenagers (24.1%), whites (8.0%), and Hispanics (11.4%) showed little or no change. The jobless rate for Asians was 7.3%, not seasonally adjusted.

In October, the number of long-term unemployed (those jobless for 27 weeks and over) declined by 366,000 to 5.9 million, or 42.4% of total unemployment.

The civilian labor force participation rate remained at 64.2% in October, and the employment-population ratio was little changed at 58.4%.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 374,000 to 8.9 million in October. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In October, 2.6 million persons were marginally attached to the labor force, about the same as a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 967,000 discouraged workers in October, a decrease of 252,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.6 million persons marginally attached to the labor force in October had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment continued to trend up in October (+80,000). Over the past 12 months, payroll employment has increased by an average of 125,000 per month. In October, private sector employment increased by 104,000, with continued job growth in professional and business services, leisure and hospitality, health care, and mining. Government employment continued to contract in October.

Employment in professional and business services continued to trend up in October (+32,000) and has grown by 562,000 over the past 12 months. Within the industry, there have been modest job gains in recent months in temporary help services and in management and technical consulting services.

Employment in leisure and hospitality edged up over the month (+22,000). Since a recent low point in January 2010, the industry has added 344,000 jobs.

Health care employment continued to expand in October 2011 (+12,000), following a gain of 45,000 in September. Offices of physicians added 8,000 jobs in October. Over the past 12 months, health care has added 313,000 jobs.

In October, mining employment continued to increase (+6,000); oil and gas extraction accounted for half of the increase. Since a recent low point in October 2009, mining employment has risen by 152,000.

Manufacturing employment changed little in October 2011 (+5,000) and has remained flat for 3 months. In October, a job gain in transportation equipment (+10,000) was partly offset by small losses in other manufacturing industries.

Within retail trade, employment increased in general merchandise stores (+10,000) and in motor vehicle and parts dealers (+6,000) in October. Retail trade has added 156,000 jobs over the past 12 months.

Construction employment declined by 20,000 in October, largely offsetting an increase of 27,000 in September; both over-the-month changes largely occurred in nonresidential construction. Employment in both residential and nonresidential construction has shown little net change in 2011.

Employment in other major private-sector industries, including wholesale trade, transportation and warehousing, information, and financial activities, changed little in October.

Government employment continued to trend down over the month (-24,000), with most of the October decline in the non-educational component of state government. Employment in both state government and local government has been trending down since the second half of 2008.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in October. The manufacturing workweek rose by 0.2 hour to 40.5 hours, and factory overtime remained at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours in October.

In October, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents, or 0.2%, to $23.19. This increase followed a gain of 6 cents in September. Over the past 12 months, average hourly earnings have increased by 1.8%. In October, average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents, or 0.2%, to $19.53.

The change in total nonfarm payroll employment for August was revised from +57,000 to +104,000, and the change for September was revised from +103,000 to +158,000.

According to the US Department of Labor, in the week ending October 29, the advance figure for seasonally adjusted initial claims was 397,000, a decrease of 9,000 from the previous week’s revised figure of 406,000. The 4-week moving average was 404,500, a decrease of 2,000 from the previous week’s revised average of 406,500.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 2.9% for the week ending October 22, unchanged from the prior week’s unrevised rate.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending October 22 was 3,683,000, a decrease of 15,000 from the preceding week’s revised level of 3,698,000. The 4-week moving average was 3,703,250, a decrease of 10,500 from the preceding week’s revised average of 3,713,750.

The value of providing training to managers throughout the employment life cycle cannot be overlooked. Training ensures that your managers are knowledgeable about your company’s workplace law obligations and skilled in delivering human resources best practices in order to become successful in their roles. Training further enables business costs to be low, enables employer liability to be controlled, and allows for successful organizations to emerge. Did you know that in 2010 the Equal Employment Opportunity Commission (EEOC) filed 99,992 charges against the private sector?

Suggested Strategic and Compliance Training Topics

Managers should be trained in various discipline areas, but some may or may not apply depending upon the company’s size and industry. Below are some suggested strategic and compliance training topics to assist managers in increasing effectiveness and reducing exposure:

• Business Execution
• Leadership
• Performance Management
• Diversity
• Business Crises Management
• HR Best Practices

Transferring the Training Is Key

To learn the best way to transfer the training into actual real life situations and settings, be sure to read the featured article by the HR pros at MyHRSupportCenter, HR Training for Managers as a Key Compliance Strategy for Your Business. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The Internal Revenue Service (IRS) has released the 2011 version of Form 945, Annual Return of Withheld Federal Income Tax, and related instructions.

Form 945 Is to Report Withheld Federal income Tax on Non-Payroll Payments

Taxpayers may use Form 945 to report withheld federal income tax from non-payroll payments. Non-payroll payments include:

• Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans), and annuities;
• Military retirement;
• Gambling winnings;
• Indian gaming profits;
• Voluntary withholding on certain government payments; and
• Backup withholding.

Only One Form 945 Should Be Filed Each Year

Report all federal income tax withholding from non-payroll payments or distributions annually on one Form 945. Do not file more than one Form 945 for any calendar year.

Report Taxes Withheld on 1099 Series and W-2G, but Not W-2

All federal income tax withholding reported on Forms 1099 (for example, Form 1099-R or 1099-MISC) or Form W-2G must be reported on Form 945. Do not report federal income tax withholding from wages on Form 945.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on filing Form 945.

Today at 2 pm, EDT, the Internal Revenue Service (IRS) will present a webinar titled, Reporting of Employer Healthcare Coverage on Form W-2

Several Topics to Be Covered in Form W-2 Webinar

The Reporting of Employer-Sponsored Health Plan Coverage on Form W-2 (Affordable Care Act Provision 9002) webinar will explain what employers and employees need to know about the provision including:

• What changes employees will see in their Form W-2
• When employers must begin reporting the benefits on the Form W-2
• Transition relief for certain employers, plans, and situations
• Which employers need to include the benefits on the Form W-2
• How employers report the benefits on the Form W-2
• What valuation methods employers can use to determine the amounts to report on the Form W-2

Systems Must Meet Certain Minimum Requirements

The IRS has certain minimum requirements for operating system, screen resolution, browser, Flash, Windows Media Player, connection, and audio. The IRS is recommending that interested parties browse to http://www.visualwebcaster.com/event.asp?id=82090 from their computer ahead of time to be sure it meets minimum system requirements.

Webinar Archive Is Available on the IRS Video Portal

Interested viewers may view an archive of the webinar by clicking here.

The Internal Revenue Service (IRS) has released the 2011 Form 944, Employer’s ANNUAL Federal Tax Return, and related instructions. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will only file once a year instead of every quarter.

Several Changes Have Been Made To the 2011 Form 944

The 2011 Form 944 has several new items. The new items include the following:

Employee Tax for Social Security Cut To 4.2%

The employee tax rate for social security has been cut to 4.2%, although the employer rate remains at 6.2%. The Medicare tax rate remains at 1.45% for both employees and employers.

COBRA Premium Assistance Credit Continues

The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. The credit is claimed on line 9a.

Social Security Wage Base for 2011

Do not withhold or pay social security tax after an employee reaches $106,800 in social security wages for the year. There is no limit on the amount of wages subject to Medicare tax.

Advance Payment of Earned Income Credit (EIC)

The option of receiving advance payroll payments of EIC expired on December 31, 2010. Individuals eligible for EIC in 2011 can still claim the credit when they file their federal income tax return.

Electronic Deposit Requirement

Beginning January 1, 2011, you must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS). Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010.

Vision Payroll Will File Form 944 for Eligible Taxpayers

Contact Vision Payroll if you have further questions on Form 944.