HR PEO Blog
Jake Stratton

Jake Stratton

The Internal Revenue Service has made a recent announcement suggesting part-year or seasonal employees to do a “paycheck checkup”. The changes made from The Tax Cuts and Jobs Act (enacted earlier in the year) have made some significant differences in how the withholding tax gets calculated this year.  Part-year and seasonal workers are especially vulnerable to incorrect calculations due to the limited or shorter period of employment, instead of calculating income on the entire year of employment.


The easiest way for a part-year or seasonal employee to do a checkup is to visit The Withholding Calculator on IRS.gov. The calculator has been designed to help estimate income and deductions to make sure the right amount of tax is being withheld. Based on the results of the calculator, employees can then change their filing and allowances on Form W-4 to update their tax withholding.

 

More information can be found at the IRS news release here: https://www.irs.gov/newsroom/seasonal-part-year-workers-urged-to-check-tax-withholding-amount

The Withholding Calculator can be found here: https://www.irs.gov/individuals/irs-withholding-calculator

Friday, 26 January 2018 14:19

Changes to Federal Tax Withholding for 2018

The IRS recently released updates to the income-tax withholding tables for 2018. This change updates the 2018 tax tables in accordance with the tax reform legislation enacted at the end of the year (HR1). Employers should update their tables as soon as possible, but at least by February 15th.

The IRS states that the new law “makes a number of changes for 2018 that affect individual taxpayers. The new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.” The IRS is also working on revising the withholding tax calculator on their website to assist individuals in determining their withholding on the form W-4.

As a result of the table change, employees should generally see an increase in their take home pay. We have already seen increases to take home pay ranging from 1.5% to 2.5%. As a reminder, now might be a good time to increase your contribution to your 401k retirement plan. Adding an additional 1% to your retirement plan will likely result in a slight increase to your take home pay and an increase to your retirement account, resulting in a “win-win” scenario.

Additional information regarding the updated withholding tables can be found here: https://www.irs.gov/newsroom/updated-2018-withholding-tables-now-available-taxpayers-could-see-paycheck-changes-by-february
Friday, 15 December 2017 10:25

IRS Business Mileage Rate Increased for 2018

On December 14, 2017, the Internal Revenue Service announced that the standard mileage rates for business will be increased for 2018.

 

For the year 2018, the optional standard mileage rate will be 54.5 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 to 18 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: https://www.irs.gov/newsroom/standard-mileage-rates-for-2018-up-from-rates-for-2017

A recent bill has been introduced in the House and Senate that simplifies reporting requirements under the ACA. The Commonsense Reporting Act of 2017 (H.R. 3919 and S. 1908) attempts to ease the reporting requirements of employers in three areas: reporting information before open enrollment, minimize administrative reporting at year end, and reduce the submission of unnecessary information. In addition to bi-partisan support, both bills are getting support from the Society for Human Resource Management (SHRM). SHRM’s vice president for government affairs, Mike Aiken, has said “H.R. 3919 and S. 1908 is a first step to minimize the challenges associated with the law’s reporting requirements”.

Current reporting requirements of the ACA require employers to collect and report information to the Internal Revenue Service (IRS) and their employees annually. Information required ranges from health insurance plan coverage, individual and beneficiary information (including social security numbers), enrollments, premium amounts, etc. The required information is intended to verify compliance with the ACA for employers and individuals, and help validate subsidies provided to individuals.

The Colorado Department of Labor and Employment has released the proposed changes to the state minimum wage for 2018.  The proposed changes align with the changes voted into the state constitution as Amendment 70 last year.  Effective January 1st, 2018 the minimum wage will increase to $10.20 per hour and will continue to increase by $0.90 per year until it reaches $12.00 per hour in the year 2020. Thereafter the minimum wage will be adjusted annually based off the Consumer Price Index for Colorado.

 

The maximum amount an employer may offset minimum wage by for tipped employees remains the same at $3.02 per hour. Because the tip credit has not changed, the Tipped Employee Minimum Wage has increased to $7.18 per hour.

 

Also, as a reminder, the employee is entitled to CO state minimum wage if either of the two situations apply: 1) the employee is covered under the Colorado Wage Order, or 2) the employee is covered under federal minimum wage provisions through the FLSA.

Thursday, 11 May 2017 09:02

One Step Closer to Comp Time

Just last week, after passing the House, the Senate received the Working Families Flexibility Act of 2017.  This Act would change the Fair Labor Standards Act to allow private-sector employers the ability to offer employees the use of “Comp Time”. The public-sector (government workers) had the option of Comp Time for a long time now, which is the method of compensating employees for overtime worked through the use of additional paid time off from work instead of cash wages.

General industry employers now have a new OSHA rule to follow regarding walking-working surfaces and fall protection standards.  This rule covers all general industry employers which are employers that are not in agriculture, construction or maritime. The rule updates standards and adds training and inspection requirements to slip, trip and fall hazards as well as adding a new section for personal protection standards requiring employers to use specific personal fall protection systems. Employers will be required to protect workers from fall hazards that are at least 4 feet above a lower level and sets requirements for fall protection as well as ladder safety.  Employers will be benefited under this rule by having a choice of a range of specific fall protection options.

The 21st Century Cures Act, that was signed late last year and took effect on January 1st, 2017, has a provision included that reinstates using “stand-alone” Health Reimbursement Arrangements (HRAs), allowing small employers to fund employees individual purchased health coverage. “Stand-alone” HRAs are HRAs created that are not part of or attached to any employer sponsored health insurance offering. This is great news for small employers that are looking for ways to help their employees with the cost of health coverage but are not able to purchase a group health plan.

Tuesday, 29 December 2015 14:49

IRS Business Mileage Rate Decreased for 2016

On December 17, 2015, the Internal Revenue Service announced that the standard mileage rates for business will be decreased for 2016.

 

 

The Consumer Price Index for Denver Boulder Greeley has increased by 1.0%, which means a new minimum wage rate for 2016. The minimum wage rule enacted in 2006 to the Colorado Constitution requires the state's minimum wage rate to be adjusted each year for inflation. The inflation adjustment is based on the US Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley combined area. This adjustment is based on the difference between the CPI-U from the first half of the prior year and the first half of the current year. This adjustment will increase the 2016 minimum wage rate to an estimated $8.31 per hour, effective January 1, 2016. But remember, this doesn't just affect the minimum wage in Denver, this is across Colorado.  You'll also want to update your minimum wage posters.

 

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