HR PEO Blog

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

Published in IRS
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
Published in IRS
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

Published in IRS

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.

Published in Healthcare
Thursday, 18 June 2009 18:00

401k Safe Harbor Provision Changes

The IRS has amended it's rules on Safe Harbor contributions to allow employers to terminate the match during these hard times.

On May 18 the Internal Revenue Service (IRS) published proposed regulations that could provide relief to employers whose plans provide for safe harbor non-elective contributions. The relief allows employers to amend their plan to reduce or suspend future safe harbor non-elective contributions without terminating the plan if the employer is encountering a "substantial business hardship" (as set forth in certain criteria established by the IRS). While the suspension of employer contributions may potentially have an impact on employee morale and the perception of the employer's benefits program by potential employees, employers who meet the criteria may find that these regulations provide welcome and necessary relief from future safe harbor non-elective contribution funding requirements and a viable alternative to terminating the plan.

Published in Employee Benefits

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

Published in IRS
Tuesday, 24 June 2008 18:00

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: https://www.irs.gov/pub/irs-drop/a-08-63.pdf.

Thursday, 29 May 2008 18:00

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.

Monday, 17 December 2007 17:00

2008 W-4 Form

IRS releases the new 2008 W-4 form

The 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.

Published in W-4
Tuesday, 27 November 2007 17:00

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.

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