One way your employees can get the new tax year off to a good start is by checking their federal income tax withholding. They can do this using the Tax Withholding Estimator on IRS.gov. This online tool helps employees avoid having too much or too little tax withheld from their wages. It also helps self-employed people, who have wage income, estimate tax payments that they should make to avoid unexpected results at tax time. Having too little withheld can result in a tax bill or even a penalty at tax time. Having too much withheld results in less money in their pocket. The estimator can help ..read more

Years ago, W-2 forms were fairly straight-forward, reporting wages paid to your employees along with tax withholdings. The days of simple W-2’s are long gone! Wages reported in boxes 1, 3 and 5 for income, social security and Medicare tax withholdings are frequently 3 different amounts – and confusing to your employees. The number of IRS required alphabetical “codes” in Box 12 range from “A to Z”, and are now on “round 2” of the alphabet with “codes” AA- FF”. Box 12, Code “DD” reports the combined employer – employee cost of employer – sponsored health insurance premiums for 2023 and is f ..read more

SOCIAL SECURITY WAGE BASE Wages will be taxed up to $168,600 for FICA in year 2024. The 2024 rates for FICA (6.2%) and Medicare (1.45%) remain unchanged. FUNDING 2024 RETIREMENT PLANS Minor changes were made to retirement plan funding for 2024. Funding limits for employee payroll contributions to various types of “qualified” retirement plans during 2024 are as follows: 401k, 403b, 457 govt. plans – maximum employee elective deferral of $23,000 with additional catch-up of $7,500 for employees 50 and over SIMPLE IRA – maximum employee elective deferral of $16,000 with additional catch-up of $3 ..read more

Employers looking for low cost employee benefit programs should consider sponsoring an Indiana College Choice 529 “payroll deduction” program for employees. This PayDay will discuss the advantages of IRS Section 529 plans as to both tax benefits as well as how employers can offer this program at zero cost to employees. WHY DO PEOPLE SET UP IRS 529 PLANS FOR THEIR KIDS, GRANDKIDS OR EVEN THEIR OWN EDUCATION? IRS Code Section 529 provides that anybody can establish a plan to help save for college (or in some cases K-12 education) for their children, grandchildren, their own education, or anybody ..read more

The end of 2023 is quickly approaching, but there is still work to do to ensure a smooth year-end. Putting in a little time before your final payroll of the year will help prevent expensive, time-consuming adjustments later on. BEFORE YOUR LAST PAYROLL OF 2023 Review your Employee Data – Before issuing W-2’s, you must verify that employee information is accurate and up to date. AccuPay’s iSolved clients can find the “Employee W2 Verification” report under Reporting/My Reports. (If you are not currently working with AccuPay, ask your payroll provider for a report showing details of all employe ..read more

AccuPay has assisted our clients for many years with calculating and reporting “personal use of a company vehicle” taxable compensation to employees. We believe that employers should calculate and report compensation for personal use of employer-provided vehicles for the following 2 reasons: Tax law is very clear that the personal use of an employer vehicle by an employee is taxable compensation to the employee; and CPA firms acknowledge that IRS business/organization tax audits pay particular attention to vehicle expenses and the business/personal use of the vehicles. Employer ..read more

The U.S. Citizenship and Immigration Services (USCIS) has released a new version of the I-9 form for employers to use.  The previous version is usable until October 31, 2023, and then employers are required to use the revised form I-9.  WHAT’S CHANGED? Some of the changes include: Sections 1 and 2 are now on a single page, helping to reduce the length of the I-9 Preparer and/or Translator Certification piece has become a standalone supplement that can be used when necessary. Section 3, Reverification and Rehire, have also become a standalone supplement that employers can use when ne ..read more

The following Indiana counties increased their county income tax rates effective for wages paid on or after October 1, 2023. Adams – 1.6% Clinton – 2.65% Dearborn – 1.4% Henry – 1.8% Vanderburgh – 1.25% A Quick Guide to Indiana County Income Taxes In Indiana, it’s important to review your employees’ county tax withholdings at the beginning of each year to ensure that accurate county taxes are withheld with each payroll. Below is a quick review of Indiana county income tax withholding rules: Where did the employee reside and work on New Year’s Day? Answers to these questions on&nbs ..read more

On September 14th of this year the IRS announced a “moratorium” on processing any new Employee Retention Tax Credit (ERC) claims/refund requests until “sometime after the end of this year.” They did indicate that they will continue processing ERC claims which they had received by September 14th, but that they intended to review them more closely, and as such, employers can expect that their pending ERC claims will take longer to process and refund out—-to perhaps 180 days or longer. The purpose of this PayDay is to provide information about the ERC program to our clients/others and also provid ..read more

When you hire a new employee, it is important to complete all required payroll forms. These forms include the New Hire Reporting Form, W-4, state withholding form (as applicable), and the I-9 form.  New Hire Reporting New hire reporting was created in 1996 to improve the child support income withholding process. All employers are required to report new hires, rehires, re-called employees, and temporary employees within 20 days of hire. In Indiana, this information is reported to the Department of Workforce Development. A link to each state’s new hire reporting website is available on the ..read more