Irs
Wednesday, November 15, 2006
IRS issues 2007 retirement plan limits
The IRS has announced the 2007 cost-of-living adjustments (COLAs) to dollar limitations on benefits and contributions, annual compensation limits, and other dollar limitations applicable to retirement plans.
IRS issues 2007 retirement plan limits The IRS has announced the 2007 cost-of-living adjustments (COLAs) to dollar limitations on benefits and contributions, annual compensation limits, and other dollar limitations applicable to retirement plans.
Highlights of the 2007 maximum dollar limitations announced by the IRS include the following:
• Annual defined benefit limit: $180,000
• Annual defined contribution limit: $45,000
• Annual compensation limit: $225,000
• 401(k) elective deferral limit: $15,500
• Highly compensated employee limit: $100,000.
The full text of IRS New Release is available at
http://www.irs.gov/retirement/article/0,,id=96461,00.html
For more information on how start a 401k plan contact StaffScapes at 303-466-7864
See Also
Friday, November 17, 2006
2006 W-2 Tax Preparation
It is the responsibility of ever employer to distribute W-2 tax forms in January.
Ever year when we are preparing to process our W-2 we get a last minute request to change an address on an employee. What is worse in February the calls start coming in "I never got my W-2". The employees goes on to tell us that they moved some time last year. Even though their check each week has the wrong address on it. What is an employer supposed to do? The IRS tells employers that it is there responsibility to get W-2 to employees. What steps can be taken now to make our job easier during the January Tax rush?To help resolve this we started stamping all our employees payroll checks with:
For Your Security
Please Verify Your
Name, Address and
Social Security Number
This has been a great tool for the payroll department. Each November and December when the Payroll Processing Department starts stamping check we all of a sudden will get a change of status form in from clients and employees. In a normal year we will print over two thousand W-2 tax forms. If you do not have a similar plan in place it is not to late. Start preparing today for the year end by contacting your local sign or office supply company and get a stamp made.
Please contact us if you have questions on how to implement these programs in your business. As a Professional Employment Organization, PEO, we can show you how our programs have helped businesses like yours save thousands. We can be reached at 303-549-1860 or info@StaffScapes.com.
Tuesday, December 05, 2006
PEO & 401K Plans
PEOs allow you the freedom to custom design a plan and eliminate the testing hassles of a plan that come along with having small business.
Are you looking to add a 40k plan to your business or do you have a plan in place and hate the expense or testing problems that come with having a 401K plan? Does your plan constantly fail testing year after year because you do not have enough employees participating in your 401K plan? If you answered yes to any of the above questions your company may be a good candidate to use the service of a PEO or Professional Employer Organization. Through the co-employment agreement with a PEO you can eliminate the cost and the testing problems associate with having a 401K plan. The IRS ruled that all PEOs must have a multiple employer plan in place. This arrangement allows the PEO to custom tailor the plan for your business. The 401k plan can be a basic plan with just simple 401k participation rules that only allow employee contributions or it can be a rich plan with certain safe harbor or employer matching provisions. A plan also can be set up and change with out extra expense and paperwork. Eliminate some of the headaches that come along with having employees, benefits and 401k plans contact a PEO today.
StaffScapes provides PEO services in Colorado and across the nation. Contact our sales or benefit department to learn more about our 401K plan. We can be reached at 303-466-7864
Wednesday, December 06, 2006
IRS issues tax calendars for 2007
Tax Calendars for 2007 (Publication 509), has been released by the IRS.
A tax calendar is a 12-month calendar divided into quarters. The calendar gives specific due dates for the following: Filing tax forms; Paying taxes; and Taking other actions required by federal tax law. Employers are the primary users of this publication, however, the general tax calendar has important due dates for all businesses and individuals. Also, anyone who must pay excise taxes may need the excise tax calendar. To decide which calendar(s) to use, first look at the general tax calendar and highlight the dates that apply to you. If you are an employer, also use the Employer’s Tax Calendar. If you must pay excise taxes, use the Excise Tax Calendar. Depending on your situation, you may need to use more than one calendar.
Saturday, Sunday, or legal holiday. Generally, if a due date for performing any act for tax purposes falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. These calendars make this adjustment for Saturdays, Sundays, and most legal holidays. But you must make any adjustments for statewide legal holidays. (An exception to this rule for certain excise taxes is noted under the Excise Tax Calendar.)
2007 Federal holidays. Federal legal holidays for 2007 are listed below.
· January 1— New Year’s Day
· January 15— Birthday of Martin Luther King, Jr.
· February 19— Washington’s Birthday
· May 28— Memorial Day
· July 4— Independence Day
· September 3— Labor Day
· October 8— Columbus Day
· November 12— Veterans’ Day
· November 22— Thanksgiving Day
· December 25— Christmas Day
Fiscal-year taxpayers. If you file your income tax return for a fiscal year rather than the calendar year, you must change some of the dates in this calendar. These changes are described under Fiscal-Year Taxpayers at the end of this calendar.
If you have a tax question contact the IRS at www.irs.gov or call 1-800-829-4933. If you would like to reduce your employment responsibilities and risks (including federal tax reporting and deposit requirements) please call StaffScapes, Inc. at 303-466-7864 and ask a representative how we can help.
See Also
Saturday, December 23, 2006
Averaged Failure to Deposit Penalties
Did you know that IRS penalties may be charged to you even if you deposited your tax liabilities on time?
The IRS may assess an "averaged" failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete line 15 of Form 941 when your tax liability (line 10) shown on Form 941 exceeded $2,500. IRS may also assess an "averaged" FTD penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability (line 10) shown on Form 941 exceeded $2,500 and you:
· Completed line 15 of Form 941 instead of Schedule B (Form 941),
· Failed to attach a properly completed Schedule B (Form 941), or
· Improperly completed Schedule B (Form 941) by, for example, entering tax deposits instead of tax liabilities in the numbered spaces.
The FTD penalty is figured by distributing your total tax liability shown on line 10 of Form 941 equally throughout the tax period. As a result, your deposits and payments may not be counted as timely because the actual dates of your tax liabilities cannot be accurately determined. You can avoid an "averaged" FTD penalty by reviewing your return before you file it. Follow these steps before submitting your Form 941.
· If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on line 15.
· If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates your employees were paid.
· Verify that your total liability shown on line 15 of Form 941 or the bottom of Schedule B (Form 941) equals your tax liability shown on line 10 of Form 941.
· Do not show negative amounts on line 15 or Schedule B (Form 941). If a prior period correction results in a decrease to your tax liability, reduce your liability for the day that you discovered the error by the tax decrease resulting from the error, but not below zero. Apply any remaining decrease to subsequent liabilities.
StaffScapes, a Professional Employer Organization (PEO), takes over the responsibility and liability of tax deposit and reporting for our clients. Please call (303)466-7864 and ask a StaffScapes’ representative how we can reduce your tax administration liability.
Wednesday, March 07, 2007
IRS 2007 “Dirty Dozen�? Tax Scams
The Internal Revenue Service recently identified 12 of the most blatant scams affecting American taxpayers.
This year the “Dirty Dozen” highlights five new scams that IRS auditors and criminal investigators have uncovered. New to the Dirty Dozen this year are abuses pertaining to the special Telephone Excise Tax Refund, Roth IRAs, the American Indian Employment Credit, domestic shell corporations and structured entities.
Involvement in tax schemes leads to problems for scam artists and taxpayers. Tax return preparers and individual taxpayers risk significant penalties, interest and possible criminal prosecution. “Taxpayers shouldn’t let their guard down,” IRS Commissioner Mark W. Everson said. “Don’t get taken by scam artists making outrageous promises. If you use a tax professional, pick someone who is reputable. Taxpayers should remember they are ultimately responsible for what is on their tax return even if some unscrupulous preparers have steered them in the wrong direction.”
The IRS urges taxpayers to avoid these common schemes:
1. Telephone Excise Tax Refund Abuses
2. Abusive Roth IRAs
3. Phishing
4. Disguised Corporate Ownership
5. Zero Wages
6. Return Preparer Fraud
7. American Indian Employment Credit
8. Trust Misuse
9. Structured Entity Credits
10. Abuse of Charitable Organizations and Deductions
11. Form 843 Tax Abatement
12. Frivolous Arguments
How to Report Suspected Tax Fraud Activity:
Suspected tax fraud can be reported to the IRS using IRS Form 3949-A, Information Referral. Form 3949-A is available for download from the IRS Web site at IRS.gov, or by mail by calling 1-800-829-3676. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888. The mailing should include specific information about who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. The person filing the report is not required to self-identify, although it is helpful to do so. The identity of the person filing the report can be kept confidential. The person may also be entitled to a reward
See Also
Thursday, March 08, 2007
The W-4 Form
W-4 is one of the most common forms Americans fill out. Here are a few things to remember when completing a W-4.
A W-4 is an IRS form that determines the federal tax that will be withheld from an employee’s paycheck. Filling out a W-4 is one of the first forms an employee will complete when hired.
When filling out a W-4, make sure the information you write is correct and clear.
The most important lines for an employee to complete are lines 1-7 of the “Employee’s Withholding Allowance Certificate.”
Always remember to sign your completed W-4.
Always remember to check the appropriate box for filing single or married.
If you have questions about your withholdings- or want to verify you are withholding the correct amount, you can visit www.irs.gov and use the IRS withholding Calculator.
If you are exempt from taxes- make sure to write EXEMPT on line 7.
Any incomplete W-4’s will automatically be defaulted to a tax status of single and 0 withholdings, the highest amount of tax will be deducted from your income.
Colorado requires all employers to report all new employees within 20 days of their hire date. StaffScapes sends copies of the employee’s W-4 to the Colorado State Directory of New Hires, so it is important that all W-4’s are completed accurately.
Thursday, May 10, 2007
Who may claim a child as dependent in case of separation or divorce?
Proposed regulations address definition of dependent for divorced, separated parents
CCH recently reported:
"The IRS has issued proposed regulations to clarify which parent may claim a child as a dependent in cases of divorce, legal separation or when the parents of the child live apart at all times during the last six months of the calendar year. Several employee benefits are impacted by the definition of dependent in Code Sec. 152, including health plans, HSAs, dependent care assistance plans and some fringe benefits."
For further information please vist irs.gov or the links below
See Also
Monday, July 02, 2007
IRS Email
A new Trojan email is circulating on the web and is claiming to be from the IRS.The IRS does not and will not communicate by email when it will send out notices. If you are not already communicating with the IRS and you do receive an email do not open it. The email circulating are placing Trojan type programs on computers that can take over certain operating functions.
Friday, October 19, 2007
IRS Announces Pension Plan Limitations for 2008
For 2008, personal exemptions and standard deductions will rise, tax brackets will widen and workers will be able to save more for retirement, thanks to inflation adjustments announced today by the Internal Revenue Service.
IR-2007-172, Oct. 18, 2007
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2008. Key changes affecting 2008 returns, filed by most taxpayers in early 2009, A few of the changes are:
Participants in most employer-sponsored 401(k) plans and 403(b) plans for employees of public schools and certain tax-exempt organizations can contribute up to $15,500, unchanged from 2007. Individuals, age 50 or over, can make an additional contribution of up to $5,000, also unchanged from 2007.
Individuals participating in SIMPLE retirement plans can contribute $10,500, unchanged from 2007. Those, age 50 or over, can make an additional contribution of up to $2,500, also unchanged from 2007.
The annual contribution limit for most defined contribution plans rises to $46,000, up from $45,000 in 2007.
For the complete list of changes view the IRS website by clicking on the link below.
See Also
- IRS
IRS Announces Pension Plan Limitations for 2008
Wednesday, November 28, 2007
2008 Mileage Reimbursement Rate
The IRS has recently released the mileage reimbursement rate for 2008
Each year, the IRS issues standard mileage reimbursement rates. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.
Beginning January 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
- 50.5 cents per mile for business miles driven;
- 19 cents per mile driven for medical or moving purposes; and
- 14 cents per mile driven in service of charitable organizations.
Tuesday, December 18, 2007
2008 W-4 Form
IRS releases the new 2008 W-4 formThe IRS has released the 2008 version of the W-4 form. The W-4 form should be filled out by all newly hired employees in 2008 and any current employees wanting to make changes to their withholding allowances or marital status. For a copy of the new form go to http://www.irs.gov/pub/irs-pdf/fw4.pdf.
Thursday, February 21, 2008
FedEx gets nailed by IRS
IRS ruling against FedEx puts independent contractor classification back in the news.
Late last year, the Internal Revenue Service ruled that FedEx had misclassified about 13,000 drivers as independent contractors resulting in a $319 million tax bill. This amount is only for penalties and back taxes for 2002. The IRS is still auditing FedEx for 2004 through 2006. Some groups believe the final cost to FedEx could be as high as $1 billion. The IRS ruled against FedEx’s assertion that drivers were contractors who operate their delivery routes as independent businesses. Some of the reasons behind the ruling stem from the drivers using FedEx equipment, wearing FedEx uniforms and working under explicit FedEx rules.
John Tuzynski, the IRS’ chief of employment-tax operations, made worker classification "a major focus" for fiscal 2008 due in large part because of money. The Government Accountability Office has estimated that misclassification of workers amounts to a tax revenue loss of $4.7 billion a year. For employers who are caught misclassifying, monetary pain is just the beginning. Not only are monetary penalties and fines applied, employers can also be criminally charged. Criminal charges include evasion of payments, filing of false tax returns, conspiracy and tax code section 7202 makes it a felony to willfully fail to collect or pay tax to the government.
The IRS has entered partnerships with the Department of Labor, the National Association of State Workforce Agencies, the Federation of Tax Advisers and the agencies that administer state employment and unemployment taxes to coordinate enforcement.
To help protect yourself and your business, StaffScapes recommends that all employers with independent contractors complete the IRS 20-factor test (Form SS-8) to determine whether they are really an employee. These tests can be downloaded at the IRS website.
Friday, March 14, 2008
Economic Stimulus Payment Notice
many of our employees have asked about the “Economic Stimulus Payment Notice”. The notice below is what I received in the mail this week.
Economic Stimulus Payment NoticeDear Taxpayer:
We are pleased to inform you that the United States Congress passed and President George W.
Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus
payments to be made to over 130 million American households. Under this new law, you may be
entitled to a payment of up to $600 ($1,200 if filing a joint return), plus additional amounts for each
qualifying child.
We are sending this notice to let you know that based on this new law the IRS will begin sending
the one-time payments starting in May. To receive a payment in 2008, individuals who qualify will
not have to do anything more than file a 2007 tax return. The IRS will determine eligibility, figure the
amount, and send the payment. This payment should not be confused with any 2007 income tax
refund that is owed to you by the federal government. Income tax refunds for 2007 will be made
separately from this one-time payment.
For individuals who normally do not have to file a tax return, the new law provides for payments to
individuals who have a total of $3,000 or more in earned income, Social Security benefits, and/or
certain veterans’ payments. Those individuals should file a tax return for 2007 to receive a payment
in 2008.
Individuals who qualify may receive as much as $600 ($1,200 if married filing jointly). Even if you
pay no income tax but have a total of $3,000 or more in earned income, Social Security benefits,
and/or certain
jointly).
In addition, individuals eligible for payments may also receive an additional amount of $300 for
each child qualifying for the child tax credit.
For taxpayers with adjusted gross income (AGI) of more than $75,000 (or more than $150,000 if
married filing jointly), the payment will be reduced or phased out completely.
To qualify for the payment, an individual, spouse, and any qualifying child must
Security number. In addition, individuals cannot
dependent of another taxpayer or they filed a 2007 Form 1040NR, 1040NR-EZ, 1040-PR, or
1040-SS.
All individuals receiving payments will receive a notice and additional information shortly before the
payment is made. In the meantime, for additional information, please visit the IRS website at
veterans’ payments, you may receive a payment of $300 ($600 if married filinghave a valid Socialreceive a payment if they can be claimed as awww.irs.gov.
Economic Stimulus Payment Notice
Many of our employees have asked about the “Economic Stimulus Payment Notice”. The notice below is what I received in the mail this week.
Economic Stimulus Payment
Dear Taxpayer:
We are pleased to inform you that the United States Congress passed and President George W.
Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus
payments to be made to over 130 million American households. Under this new law, you may be
entitled to a payment of up to $600 ($1,200 if filing a joint return), plus additional amounts for each
qualifying child.
We are sending this notice to let you know that based on this new law the IRS will begin sending
the one-time payments starting in May. To receive a payment in 2008, individuals who qualify will
not have to do anything more than file a 2007 tax return. The IRS will determine eligibility, figure the
amount, and send the payment. This payment should not be confused with any 2007 income tax
refund that is owed to you by the federal government. Income tax refunds for 2007 will be made
separately from this one-time payment.
For individuals who normally do not have to file a tax return, the new law provides for payments to
individuals who have a total of $3,000 or more in earned income, Social Security benefits, and/or
certain veterans’ payments. Those individuals should file a tax return for 2007 to receive a payment
in 2008.
Individuals who qualify may receive as much as $600 ($1,200 if married filing jointly). Even if you
pay no income tax but have a total of $3,000 or more in earned income, Social Security benefits,
and/or certain
jointly).
In addition, individuals eligible for payments may also receive an additional amount of $300 for
each child qualifying for the child tax credit.
For taxpayers with adjusted gross income (AGI) of more than $75,000 (or more than $150,000 if
married filing jointly), the payment will be reduced or phased out completely.
To qualify for the payment, an individual, spouse, and any qualifying child must
Security number. In addition, individuals cannot
dependent of another taxpayer or they filed a 2007 Form 1040NR, 1040NR-EZ, 1040-PR, or
1040-SS.
All individuals receiving payments will receive a notice and additional information shortly before the
payment is made. In the meantime, for additional information, please visit the IRS website at
Tuesday, May 27, 2008
Health Saving Accounts (HSA)
The IRS released limits for 2008 & 2009 HSA plans.
The Statutory Contribution Amount is:
2008 2009
$2,900 $3,000
Friday, May 30, 2008
Per-diems
What are the limits the IRS has established for Per-diems?
The summer business travel season is in full swing. The IRS guidelines for Per Diem are;
lodging, meals and incidentals-$246 per day in high cost areas, $148 elsewhere. Meals and incidentals only $58 in high cost areas, $45 elsewhere. Self employed on travel must document their travel separately, but can use the rate for meals.
If you have further questions please call 303-466-7864.
Wednesday, June 25, 2008
IRS Increases Mileage Rate
On June 23, 2008, the Internal Revenue Service announced an increase to the optional standard mileage rates.
For the last half of 2008, the optional standard mileage rate will increase from 50.5 cents to 58.5 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.
The rate for computing the deductible medical or moving costs have also increased by 8 cents to 27 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can go to the IRS announcement at: http://www.irs.gov/newsroom/article/0,,id=184163,00.html.
Wednesday, October 15, 2008
New IRS Hotline Created for Vitims of Identity Theft
IRS announces additional assistance for identity theft victims
The IRS has recently announced the creation of a toll free hotline for use by Identity Theft Victims. The new IRS Identity Protection Specialized Unit (800 908-4490) will take actions to mark the affected accounts so that identity theft issues may be resolved more quickly and reduce the burden of resolving any related issues in future years.
For further information individuals may go to IRS.gov’s Identity Theft website at: http://www.irs.gov/individuals/article/0,,id=136324,00.html
Monday, December 01, 2008
IRS Reduces Mileage Rate for 2009
On November 24, 2008, the Internal Revenue Service announced a reduction to the optional standard mileage rates for 2009.
For the year 2009, the optional standard mileage rate will reduce from 58.5 cents to 55 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.
The rate for computing the deductible medical or moving costs have also reduced 24 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can go to the IRS announcement at: http://www.irs.gov/newsroom/article/0,,id=200505,00.html
