The Internal Revenue Service (IRS) has issued a statement stating that tax return processing and issuance of refunds will not be affected by the recent tragedy in Austin, Texas. According to the statement, “the IRS does not process tax returns or issue refunds at the Echelon 1 Building at 9430 Research Blvd. in Austin, Texas.” IRS Commsioner Doug Shulman has also issued a statement concerning the tragedy.
Employees who have provided a Form W-4, Employee’s Withholding Allowance Certificate claiming exemption from federal income tax withholding must file a new 2010 Form W-4 by February 16, 2010 in order to continue their exemption from federal income tax withholding. Employers must start withholding on February 16, 2010 if employees have not provided a 2010 Form W-4 claiming exemption. Even employees who are no longer claiming exemption should file a 2010 Form W-4 so that employers may calculate the proper amount of withholding. If an employee has not provided a 2010 Form W-4 by February 16, 2010, the employer should withhold based on a previously filed Form W-4 not claiming exemption, if available or using single, zero allowances, if not. Spanish-speaking employees may complete Formulario W-4(SP), Certificado de Exención de la Retención del Empleado. Upon request, Vision Payroll can provide employers with pre-printed 2010 Forms W-4 for all active employees. Vision Payroll will not automatically change any employee’s claimed withholding allowances. Employers should update the allowances claimed by logging in to their company file or providing Vision Payroll with the updated information.
The Internal Revenue Service (IRS) has released an updated version of Publication 15-A, Employer’s Supplemental Tax Guide (Supplement to Publication 15 (Circular E), Employer’s Tax Guide) for use in 2010. Publication 15-A contains information on the following areas:
In addition, Publication 15-A provides information on What’s New, Reminders, and Useful Items. Contact Vision Payroll if you have any questions on Publication 15-A.
This week’s question comes from Rachael, a receptionist. I just filed my 2009 tax returns. Usually I get a big refund, but this year my refund was a lot less. My income and deductions are pretty much the same as in 2008. Why did my federal income tax refund go down? Answer: Your income tax refund is based on many factors, but one important factor to consider is the amount of federal income tax withheld. Last February, the Internal Revenue Service released revised withholding tables that increased most taxpayers’ take-home pay by reducing the amount of federal income tax withheld. These tables reflected changes mandated by the American Recovery and Reinvestment Act of 2009, including the Making Work Pay Credit. Contact Vision Payroll if you have any questions.
The Internal Revenue Service (IRS) recently released 2010 Form W-5, Earned Income Credit Advance Payment Certificate. There are four criteria for claiming advance earned income credit (EIC) payments.
The maximum credit taxpayers may receive in advance is $1,830. Eligible taxpayers must file a new Form W-5 for 2010. The 2009 Form W-5 expired December 31, 2009. Contact Vision Payroll if you have any question on Form W-5.
This week’s question comes from Sherri, a payroll director. We have many employees with levies on their paychecks, I know we need to change the calculation if an employee provides a change in exemptions. Where can I find the levy exemption amounts for 2010? Answer: 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 2010, 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.
In IR-2009-107, the Internal Revenue Service (IRS) announced that interest rates for the first quarter of 2010 would remain unchanged from the fourth quarter. The rates are as follows:
The IRS will publish the rates in Revenue Ruling 2009-37. Contact Vision Payroll if you have any questions on the first quarter rates.
In Notice 2009-91, Withholding on Wages of Nonresident Alien Employees Performing Services Within the United States, the Internal Revenue Service (IRS) modified the procedures for calculating the amount of federal income tax to be withheld from wages paid to nonresident aliens starting on January 1, 2010. Since nonresident aliens are not eligible for the Making Work Pay Tax Credit, the withholding procedures must be modified to reflect this difference. According to Notice 2009-91:
First, employers need to add an amount to wages before determining withholding under the wage bracket or percentage method in order to offset the standard deduction built into the withholding tables. Second, employers need to determine an additional amount of withholding from a separate table applicable only to nonresident alien employees to offset the effect of the Making Work Pay Tax Credit built into the withholding tables. The specific steps to be followed for each of these two modifications will be set forth in Publication 15 and other IRS forms or publications.
Contact Vision Payroll if you have any questions on Notice 2009-91.
In Notice 2009-93, the Internal Revenue Service (IRS) has announced the creation of a pilot program to allow certain filers of Form 1098, Forms 1099, and Form 5498 to truncate an individual’s nine-digit identifying number on paper copies of the payee statements. The three types of numbers are the social security number, the IRS individual taxpayer identification number, and the IRS adoption taxpayer identification number. The purpose is to reduce the risk of misuse of a person’s identifying number through misappropriation from the payee statement.
There are three requirements that must be met for a filer to qualify for the pilot program. They are:
The notice also invites public comments on specific areas. Contact Vision Payroll if you have any questions on Notice 2009-93.
This week’s question comes from Eugenia, a small business owner. One of our employees just moved. How do I change an employee’s address? Answer: According to the Internal Revenue Service (IRS), employers should report the address where the employee receives mail. If an employee changes that address, employers may change it online by logging in, click Employees, then click Demographics, and enter the employee’s new address. Employers who are not yet online should report the change of address the next time they submit payroll hours. Contact Vision Payroll if you have any questions on changing an employee’s address.
Vision Payroll