Vision Payroll

The Internal Revenue Service has released an updated version of Publication 1494, Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(C), 668-W(c)(DO) and 668-W(ICS)). The table is used to calculate the amount of wages and other income exempt from levies for delinquent taxes. In addition to levies issued in 2009, employers use the revised amounts to calculate the exempt amount if the employee should provide a revised statement showing a change in filing status or exemptions. Contact Vision Payroll for assistance in automating the calculation of the exemption and levy amounts on employees’ paychecks.

The Internal Revenue Service recently released an updated version of Publication 15-B, Employer’s Tax Guide to Fringe Benefits. Publication 15-B provides an overview of fringe benefits as well as sections on fringe benefit exclusion rules and fringe benefit valuation rules. In addition, guidelines for withholding, depositing, and reporting taxable non-cash fringe benefits are also provided. Contact Vision Payroll if you any questions on Publication 15-B.

According to a recent article in the Wall Street Journal, celebrity chef Wolfgang Puck would like to eliminate the minimum wage for waiters. In a story on resolutions for 2009, Puck was asked, “What problem should your industry or professional community tackle more effectively?” Puck responded:

The industry should lobby to establish a federal law that allows restaurants nationwide to exempt waiters who earn tips from the minimum wage. Waiters would not lose money because they could work overtime, and we could use the savings to provide health care or raise the wages of dishwashers.

Currently, tipped employees must be paid a minimum wage of $2.63 per hour in cash wages and with tips must earn at least $6.55 per hour. State laws may provide rules that are more beneficial to the employee and must be followed.

The Internal Revenue Service recently released an updated version of Publication 15, (Circular E) Employer’s Tax Guide. In addition to providing information on classifying employees, determining which types of payments are considered wages for federal employment tax purposes, and depositing taxes, Circular E also provides updated tables for use in calculating the amount of federal income tax to be withheld using either the percentage method or the wage bracket method. Tables for both the percentage method and the wage bracket method of calculating the amount of any Advance Earned Income Credit Payment are also provided. Vision Payroll has already incorporated the updated tables into its tax calculations for paychecks and will begin using the updated tables for all wages paid during 2009. Contact Vision Payroll if you any questions on Publication 15.

Employers often question whether employees who work in one year and are paid in the next year should have the wages reported in the year the work was performed or the year the wages were paid. Generally, wages are reported based on payment date. For example, if the pay period ends on December 27, 2008 and the wages are paid on Wednesday, December 31, 2008, those wages are included on the fourth quarter 2008 Form 941 (or equivalent) and reported to the employee on the 2008 Form W-2. Alternatively, if the pay period ends on December 27, 2008 and the wages are paid on Friday, January 2, 2009, those wages are included on the first quarter 2009 Form 941 (or equivalent) and reported to the employee on the 2009 Form W-2. Contact Vision Payroll if you have any questions on which year employees’ pay should be reported.

The standard mileage rates for the use of automobiles beginning January 1, 2009 will be 55 cents per mile for business miles driven and 24 cents per mile driven for medical or moving purposes, the Internal Revenue Service announced yesterday in IR-2008-131. The new rates are changed from 58.5 cents per mile for business travel and 27 cents per mile for moving and medical travel for the second half of 2008. The rate for miles driven in service of charitable organizations has remained the same at 14 cents per mile. Contact Vision Payroll if you have any questions on 2009 mileage rates.

This week’s question comes from Matt, a sales rep: Every week there’s a deduction for FICA on my paycheck. Two weeks ago, the deduction was lower than usual and last week there was no deduction at all. Why did my FICA tax deduction stop? Answer: The FICA (Federal Insurance Contributions Act) tax is related to Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program, commonly called Social Security. Under this program, there is a cap on benefits based on a maximum earnings level, called the wage base. For 2008, the wage base is $102,000 and for 2009 it is scheduled to increase to $106,800. At retirement, using current law, benefit calculations are limited to earnings at or below the wage base. Therefore, no tax is withheld on earnings above the wage base, effectively limiting the maximum withholding to $6,324 in 2008. Contact Vision Payroll if you have any questions on the Social Security wage base.

The Washington Department of Labor and Industries announced recently that pursuant to Revised Code of Washington §49.46.020, the minimum wage for the state of Washington will increase to $8.55 per hour effective January 1, 2009. The law requires an adjustment to the minimum wage be calculated each year. The adjustment is tied to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months ending in August. The 5.9% increase in the CPI-W will result in an increase of $0.48 for 2009. Contact Vision Payroll if you have any questions on the Washington minimum wage increase or visit our Minimum Wage Chart.

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.

Vermont Governor James H. Douglas announced recently that pursuant to Title 21 of the Vermont Statutes, Annotated §384, the minimum wage for the state of Vermont will increase to $8.06 per hour effective January 1, 2009. The law requires an adjustment to the minimum wage be calculated each year. The adjustment is tied to the change in the federal Consumer Price Index, US city average, not seasonally adjusted (CPI-U) for the 12 months ending in August and cannot increase more than five percent per year. The 5.4% increase in the CPI-U will result in an increase of the statutory maximum of five percent or $0.38 for 2009. Contact Vision Payroll if you have any questions on the Vermont minimum wage increase or visit our Minimum Wage Chart.