The IRS recently released Notice 2008-62 which states that teachers who receive pay over a 12-month period will generally not be subject to §409A. Technically, teachers who only work for 9 or 10 months but are paid over a 12-month schedule have deferred compensation under §409A since some pay is deferred from one calendar year to the next. Under proposed regulations to be issued under §457(f), teachers paid under such plans will be exempt from the §409A rules.
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The US District Court for the Southern District of New York has upheld payroll tax penalties on a company owned by actor Joe Pesci even though the taxes were timely paid. The IRS assessed the penalties because the company did not pay the taxes electronically as required by law. In Fallu Productions, Inc. v. United States et al., No. 1:06-cv-13248 (USDC SD NY), the court ruled that the “increased efficiency of the EFTPS [Electronic Federal Tax Payment System] provides reasonable justification for requiring…the system.” Furthermore, “the imposition of FTD [federal tax deposit] penalties when taxes are not deposited electronically as required does not violate taxpayers’ due process rights.”
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The Massachusetts Department of Revenue (DOR) has clarified its position on the deductibility of 401(k) contributions. In Income Tax Directive 08-3, effective for 2008 and later years, the DOR denied deductions for 401(k) contributions for partners and self-employed individuals, whether the contributions are elective or matching. This is in direct conflict with and supersedes earlier DOR positions that explicitly allowed partners and self-employed individuals a deduction for elective contributions to 401(k) plans.
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The standard mileage rates for the use of automobiles beginning July 1, 2008 will be 58.5 cents per mile for business miles driven and 27 cents per mile driven for medical or moving purposes, the Internal Revenue Service announced June 23 (IR-2008-82; Announcement 2008-63; Revenue Procedure 2007-70 is modified). The new rates are changed from 50.5 cents per mile for business travel and 19 cents per mile for moving and medical travel for the first half of 2008. The rate for miles driven in service of charitable organizations has remained the same at 14 cents per mile.
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Links to State Unemployment Tax Agencies
Links to Federal Agencies
IRS
www.irs.gov
You can download the ViewChoice application here: ViewChoice Software
State unemployment tax. Sometimes known as SUI. This tax is usually paid exclusively by the employer. Most for profit companies are subject to this tax whose amounts vary greatly from state to state.
Sometimes abbreviated SWT. The tax taken from the employee with each payrun that contributes to the employee’s payment of state income tax, if applicable. The amount is determined by the individual state and by the employee’s choice of marital and dependent status on their state withholding form. For more information, please see the links section on this page for the state in question.
The dry run through the bank for an employee’s direct deposit to ensure security and accuracy. The prenote period lasts 10 business days.
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