NewsletterHealth Care Credit
Do you provide health insurance for your employees? You may be eligible for a 35% tax credit to offset paid health insurance premiums. We need the following information related to health insurance for all employees.
1) Year to date payroll summary showing gross wages paid and total hours worked for each employee.
2) Specify any employees that are owner(s) or related to owner(s).
3) Total amount of health insurance paid for each of the enrolled employees on your list.
4) Total amount of health insurance withheld from each of the enrolled employees on your list (may be included on your year to date payroll summary).
5) Tell us if each enrolled employee is covered under the “employee-only” plan or the “family” plan.
6) Please provide the company name of your insurer.
If you offer a separate dental/vision plan, we would need all of the above information specifically related to those plans listed separately.
Your personal tax organizer has been mailed!!
If you elected to have the organizer emailed we have completed the email process. Please check your spam folder if you have not received your organizer in your inbox. Mailings can take additional time in some locations. If you have any questions please call us.
W-2 & 1099 Filing Requirements
The IRS is closely monitoring the filing of year end forms W-2 and 1099. These forms are due to the recipient by January 31st, 2012 for the 2011 year.
W-2’s and 1099’s:Penalties for not filing range from $15 - $50 per form not filed or incorrectly filed. So for simply not filing them at all, the penalty is $50 per form. If the IRS can show “intentional disregard” of the filing requirement or the accuracy of the information, the minimum penalty is $100 per form.
Additionally 1099’s:Make sure you have the recipient’s correct name, address, and ID number. Each person receiving a 1099 should provide you with an updated form W-9 (these are available in our office or on the IRS website). If you are audited by the IRS and they discover just 10 instances where you should have filed 1099’s but intentionally did not, the penalties could be thousands of dollars enforced by the IRS.
1099 & 1096 Reporting: Any business that pays independent contractor(s) or a business more than $600.00 in any year, must report the amount on Forms 1099 & Forms 1096 to the IRS by January 31st, 2012
Year End Forms: Don’t forget year end forms, 1099, 1096, W2, W3, with due dates of January 31st. As a reminder these reports are also prepared on a “First-Come-First-Serve” basis. By providing us the information assoon as it’s available, we will be able to process and return them as quickly as possible. Please update any employee address changes as necessary to ensure all employees receive year end forms timely.
Six Important Points about Penalties
Taxpayers who do not file their return and pay their tax by the due date may have to pay a penalty. Here are things you should know about failure-to-file and failure-to-pay penalties.
1. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return and explore other payment options in the meantime. 2. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of the taxpayer’s unpaid taxes. 3. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. 4. You will have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. 5. If you filed an extension and you paid at least 90 percent of your actual tax liability by the due date, you will not be faced with a failure-to-pay penalty. 6. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. This information is provided by the IRS. Communication is the key to minimizing problems. If you are experiencing economic hardship please contact the IRS to discuss payment options. Organizer Reminder While reviewing the information in your tax organizer please update any information that may have changed. Please verify your mailing address, name (matching social security card), email address, direct deposit account information (if applicable) are all up to date. If you have any questions please feel free to call our office.
Direct Deposit
We strongly recommend that you receive any tax refund due via direct deposit. Not only is this the safest method of delivery, it also reduces the amount of waiting time for the refund. Please include a photocopy or voided check with your organizer information.
Is your Independent Contractor a Common Law Employee?
The IRS, Oregon and Washington are very aggressive in the area of worker classification and the penalties for misclassifying workers are severe. In addition, state agencies are sharing their findings with the IRS.
The IRS looks at three categories that encompass various factors to determine worker classification:
1. Behavioral control – Facts the show whether the business had a right to control how the worker performs the required task. Instructions could include:
a. When and where to do the work
b. What tools or equipment to use
c. What sequence or order to follow or who should do specific tasks
d. Training provided by the business worker
The key is whether the business has retained the right to control the detail of the worker’s actions.
2. Financial control – Facts that show whether the business has the right to control the business aspects of the worker’s job, including:
a. The extent to which the worker has reimbursed business expenses
b. The extent of the worker’s investment in the business
c. The extent to which the worker makes services available to other customers. Does the worker have a business license? (It is a requirement of the Company to confirm the business licenses status of a worker.) Does the worker advertise or market other work?
d. The method by which the worker is paid
e. The extent to which the worker can realize a profit and loss (Key is who bears the financialrisk?)
3. Relationship of the parties involved – The substance of the relationship between the parties governs the worker’s status. Factors that reflect the type of relationship include:
a. Are there written contracts describing the relationship between the worker and the Company?
b. The permanency of the relationship between the worker and employer. The expectation of an indefinitely ongoing relationship is generally considered to be evidence of an employer/employee relationship.
c. Is the worker provided with employee type fringe benefits, such as health insurance, sick pay or company outings?
d. The extent to which services performed by the worker are a integral part of the regular business.
There is not one particular item that will determine if a worker is an employee or an independent contractor. The factors of the temporary engagement must be looked at as a whole to determine employee vs. independent contractor.
Minimum Wage Increases Oregon $8.80 January 1st, 2012 ~ Washington $9.04 January 1st, 2012 2012 Mileage Rates The IRS has set the mileage reimbursement rate for 2012 as follows:
Business 55.5 cents/mile
Medical/Moving 23 cents/mile
Charitable 14 cents/mile
Consumers should be aware of a scam in which recipients receive an e-mail that claims to come from the Electronic Federal Tax Payment System. The e-mail states that tax payments made by the e-mail recipient through EFTPS have been rejected. The e-mail then directs recipients to a bogus website containing malicious software (malware) that infects the intended victim’s computer. To avoid the bogus website and malware, do not click on any links, open any attachments or reply to the sender for any e-mail you may receive that claims to come from EFTPS.
The IRS and the Financial Management Service (the Treasury bureau that owns EFTPS) does not communicate payment information through e-mail.
EFTPS is committed to taxpayer privacy and uses industry-leading security practices and technology to protect taxpayer data.
A scam that tricks someone into revealing their personal and financial data is identity theft. A scam that attempts to do this through e-mail is known as phishing. Find out more about IRS-impersonation phishing scams and how to recognize and report them to the IRS.
If you responded to this scam and believe you may have become the victim of identity theft, find out what steps you can take.
EFTPS is a tax payment system that allows individuals and businesses to pay federal taxes electronically via the Internet or phone, at any time of the day and any day of the year. It’s free, it’s fast and it’s secure, accurate and convenient.
For more information please visit www.eftps.gov
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