Vision Payroll

Due to the severe storms, tornadoes and straight-line winds in Oklahoma beginning May 10, 2010, President Barack Obama declared the following counties a federal disaster area: Carter, Cleveland, Creek, Garvin, McIntosh, Okfuskee, Oklahoma, Pottawatomie and Seminole. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after May 9, 2010 and before May 26, 2010 as long as the deposits were made by May 25, 2010. In addition, affected taxpayers will have until July 9, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, tornadoes and straight-line winds and need further information on the relief provided by the IRS.

The recently enacted Patient Protection and Affordable Care Act (the Act) will expand information reporting requirements starting in 2012. §9005 of the Act amends §6041 of the Internal Revenue Code of 1986 (IRC) so that payments to corporations that were previously exempted from reporting will now be subject to reporting on Form 1099. Additionally, information reporting will now be required for purchases of property. Therefore, businesses that pay a single entity $600 or more in a calendar year for purchases of goods and services will be required to report those payments on Form 1099.

Under the law, the IRS was granted the authority to issue so-called legislative regulations to “prevent duplicative reporting of transactions.” Since under a different provision also effective in 2012 payment processors will be required to report gross amounts paid to companies using debit and credit cards, IRS Commissioner Douglas H Shulman indicated in a recent speech that transactions that use credit or debit cards might be exempted from these reporting requirements.

Vision Payroll strongly recommends that businesses begin their implementation plan now to be ready to report under the new requirements and to be ready to reconcile the forms received from their customers. Vision Payroll is ready now to work with businesses on their implementation plan and will assist them in filing the necessary forms.

This week’s question comes from Mike, a small-business owner. We have hired some employees whose native language is Spanish. They are better able to understand forms in Spanish than they are in English. We need them to complete Form W-11 in order to claim payroll tax forgiveness on Form 941. Is there a Spanish Form W-11 available? Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, is used to certify worker eligibility for payroll tax forgiveness under the HIRE Act. At the present time, the Internal Revenue Service (IRS) has not released a Spanish version of Form W-11. Contact Vision Payroll if you have any further questions on Form W-11.

***Please see updated information regarding the release of the Spanish version of Form W-11.

In IR-2010-065, the Internal Revenue Service (IRS) announced that interest rates for the third quarter of 2010 would remain unchanged from the second quarter. The rates are as follows:

• Four (4) percent for overpayments [three (3) percent in the case of a corporation];
• Four (4) percent for underpayments;
• Six (6) percent for large corporate underpayments; and
• One and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.

The IRS will publish the rates in Revenue Ruling 2010-14. Contact Vision Payroll if you have any questions on the third quarter rates.

The Internal Revenue Service (IRS) recently released Rev. Proc. 2010-22, which contained the 2011 inflation adjusted amounts for Health Savings Accounts or HSAs. Since the changes in the Consumer Price Index for the relevant period do not result in changes to the amounts in 2011, the amounts will stay the same as in 2010.

The annual limitation on deductions will remain at $3,050 in 2011 for those with self-only coverage. Those with family coverage will have the deduction limitation stay at $6,150.

The definition of a high deductible health plan will see no change from one with a minimum deductible of $1,200 in 2011 for self-only coverage and $2,400 for family coverage.

The annual out-of-pocket limitation for 2011 also will not increase from $5,950 for those with self-only coverage; the out-of-pocket limitation for family coverage remains at $11,900.

Contact Vision Payroll if you have any questions on Rev. Proc. 2010-22 and the amounts for HSAs in 2011.

Due to the severe storms, flooding, and tornadoes in Mississippi beginning May 1, 2010, President Barack Obama declared the following counties a federal disaster area: Alcorn, Benton, Lafayette, Tippah and Tishomingo. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 30, 2010 and before May 18, 2010 as long as the deposits are made by May 17, 2010. In addition, affected taxpayers will have until June 30, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, and tornadoes and need further information on the relief provided by the IRS.

Due to the severe storms, flooding, mudslides and tornadoes in Kentucky beginning May 1, 2010, President Barack Obama declared the following counties a federal disaster area: Adair, Allen, Anderson, Barren, Bath, Bourbon, Boyd, Boyle, Butler, Carter, Casey, Christian, Clark, Clinton, Crittenden, Cumberland, Edmonson, Elliott, Estill, Fayette, Fleming, Franklin, Garrard, Green, Greenup, Hardin, Hart, Henry, Hopkins, Jackson, Jessamine, Larue, Lee, Leslie, Lewis, Lincoln, Livingston, Logan, Madison, Magoffin, Marion, Menifee, Mercer, Metcalfe, Monroe, Montgomery, Nelson, Nicholas, Ohio, Owen, Powell, Pulaski, Rockcastle, Rowan, Russell, Simpson, Taylor, Warren, Washington, Wayne, Wolfe and Woodford. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 30, 2010 and before May 18, 2010 as long as the deposits are made by May 17, 2010. In addition, affected taxpayers will have until June 30, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, mudslides and tornadoes and need further information on the relief provided by the IRS.

The Internal Revenue Service (IRS) recently released revised 2010 Form W-2, Wage and Tax Statement, and revised 2010 Form W-3, Transmittal of Wage and Tax Statements. The revised 2010 Instructions for Forms W-2 and W-3 indicate that employers should:

Report the amount of wages and tips paid to the qualified employee for which you claimed the payroll tax exemption in Box 12, using code CC. This will include wages and tips paid to the qualified employee from April 1, 2010, through December 31, 2010, for which you claimed the payroll tax exemption, plus wages and tips paid to the qualified employee from March 19, 2010, through March 31, 2010, for which you claimed a credit in the second quarter of 2010. The amount may not exceed $106,800 (2010 maximum social security wage base).

The box on the Form W-3 to report deferred compensation was moved from box 12 to box 12a. In addition, a new box 12b was added to report HIRE exempt wages and tips. Contact Vision Payroll if you have any questions on the 2010 Form W-2 and revised 2010 Form W-3.

Due to the severe storms, flooding, straight-line winds and tornadoes in Tennessee beginning April 30, 2010, President Barack Obama declared the following counties a federal disaster area: Benton, Cannon, Carroll, Cheatham, Chester, Clay, Crockett, Davidson, Decatur, DeKalb, Dickson, Dyer, Fayette, Gibson, Giles, Hardeman, Hardin, Haywood, Henderson, Hickman, Houston, Humphreys, Jackson, Lauderdale, Lawrence, Lewis, Macon, Madison, Marshall, Maury, McNairy, Montgomery, Obion, Perry, Putnam, Robertson, Rutherford, Shelby, Smith, Stewart, Sumner, Tipton, Trousdale, Wayne, Williamson and Wilson. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 29, 2010 and before May 18, 2010 as long as the deposits are made by May 17, 2010. In addition, affected taxpayers will have until June 29, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, straight-line winds and tornadoes and need further information on the relief provided by the IRS.

Due to the severe storms, tornadoes, straight-line winds, and flooding in Alabama beginning April 24, 2010, President Barack Obama declared the following counties a federal disaster area: DeKalb, Marshall and Walker. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 23, 2010 and before May 11, 2010 as long as the deposits are made by May 10, 2010. In addition, affected taxpayers will have until June 23, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, tornadoes, straight-line winds, and flooding and need further information on the relief provided by the IRS.