Vision Payroll

Are you ready to make a higher contribution to your retirement plan in 2009? Did your company establish an HSA and you’re not sure how much you can put away? Do you need to know the maximum Social Security tax that can be withheld? The election results are in and so are most of the 2009 inflation adjustments for payroll facts and figures. We’ve collected what you’ll need and added them to our 2007 and 2008 presentation and now you can get them all in one place. Click Tutorials, then Important Facts and Figures. We’ll update them as needed so you can always visit VisionPayroll.com when you need the latest results.

In IR-2008-118, the Internal Revenue Service (IRS) announced an increase for 2009 to the Highly Compensated Employee Limitation under §414(q)(1)(B) of the Internal Revenue Code of 1986. Non-discrimination testing in some types of retirement plans limits the deferral rate of “highly compensated employees” (HCEs) based upon the deferral rate (ADP) of the “non-highly compensated employees”. For 2009, an HCE is anyone who was a “5-percent owner” at any time during 2008 or 2009 or anyone who received in excess of $105,000 in compensation during 2008 and, if elected by the employer, is in the top twenty percent of employees based upon compensation. The HCE limit was $100,000 for 2007 and 2008 plan testing. Since the law includes a look-back provision, employees who earned more than $100,000 in 2007 are generally considered HCEs for 2008 plan year testing, employees who will earn more than $105,000 in 2008 are generally considered HCEs for 2009 plan year testing, and employees who will earn more than $110,000 in 2009 are generally considered HCEs for 2010 plan year testing. Contact Vision Payroll if you have questions on changes to the HCE definition for 2008 and 2009, visit Important Facts and Figures, or get updated information for 2009 and 2010.

This week’s question comes from Joe, a payroll administrator. I’m always busy at year-end. Is there anything I can do now to make 2008 year-end easier? Answer: There are several things that can be done to ease the year-end crunch.

• Review each employee’s basic information including name, address, and social security number and update for changes or mistakes.
• Be sure contractor W-9 forms are on file for preparation of any Forms 1099.
• Review company paid time off policy and remind employees of any use it or lose it feature.
• Accumulate data for special pay transactions including items that must be added for W-2 purposes. Examples include fringe benefits, including personal use of a company car, value of group-term life insurance in excess of $50,000, and medical premiums for certain S corporation shareholders. These items should be included with a live payroll run in order to collect the employee’s share of any taxes due.
• Confirm with your pension plan administrator which employees should have pension indicator box checked on Form W-2.
• Determine which employees will require an additional Form W-2 to report third-party sick pay.
• Plan and schedule any additional pay runs, including holiday and performance bonuses and directors pay.

Vision Payroll can work with you to prepare now for a smooth year-end. Contact us now with any questions or concerns.

The General Services Administration updated the maximum per diem rates for travel after September 30, 2008 and before October 1, 2009. For destinations or counties not specifically listed, the lodging per diem is $70 and the meals and incidental expenses per diem is $39. Certain destinations or counties are listed with higher per diem rates for part or all the fiscal year. Contact Vision Payroll if you have any questions on maximum per diem rates.

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.