Payroll

IRS clarifies $2,500 pretax limit to health FSAs

07/20/2012

The Affordable Care Act health care reform law limits employees’ pretax contributions into health flexible spending accounts (FSAs) to $2,500 for taxable years beginning after Dec. 31. The IRS has now clarified whose taxable year counted—the employee’s, the employer’s or the cafeteria plan’s.

IRS provides answers on the new 0.9% Medicare tax

07/16/2012

To pay for health care reform, high earners—single employees earning more than $200,000 and joint filers earning more than $250,000—will pay an additional 0.9% in Medicare taxes, for a total tax rate of 2.35%, beginning Jan. 1, 2013. The IRS has issued “Questions and Answers for the Additional Medicare Tax” to provide guidance.

Regs shed light on when to tax noncash compensation

07/06/2012

Under tax code Section 83, you don’t have to tax employees who receive company stock, stock options or other property that is subject to a substantial risk of forfeiture until the risk lapses and the property vests. Proposed regulations now define what counts as a substantial risk of forfeiture.

Can we talk? Tips for communicating with employees about payroll

07/04/2012

Payroll isn’t an easy subject to master, so it’s a safe bet that employees in your company don’t have a clue about what goes on in your office. That makes explaining key payroll changes to employees difficult. Tips from two payroll managers at large organizations:

After Supreme Court ruling, plan now for W-2 health care reporting

07/03/2012

Now that the Supreme Court has upheld the health care reform law, you have an urgent item on your to-do list: Coordinating closely with the payroll department to ensure you’re ready to make sure employees’ 2012 tax documents reflect the value of their health benefits.

LLC owner must sign tax forms

07/02/2012

It seems counterintuitive, but you can use your consent to extend the statute of limitations on payroll tax assessments as leverage with auditors. But only if the proper party signs Form SS-10, Consent to Extend the Time to Assess Employment Taxes. The IRS has concluded in emailed advice that a single-member LLC owner is the correct party to sign.

How to respond to an order to garnish an employee’s wages

06/27/2012

Record numbers of bankruptcies and foreclosures have been making a big splash in the news for the past four years. However, a quieter phenomenon—one fraught with traps for unwary employers—is a concurrent and growing trend of court-ordered or government-issued wage garnishments.

Courts weigh in: How to handle meal breaks not taken

06/26/2012

With workforces lean, it’s important to squeeze every bit of productivity out of employees. But squeeze too hard by not providing employees with state-mandated meal or rest breaks, and you’re likely to face a lawsuit. Two recent cases illustrate.

When computing employee pay, are we allowed to round off employee working hours?

06/20/2012

Q. My company uses a time clock to track the hours of nonexempt employees. When we determine the wages to be paid to employees, can we round up or down to the nearest five-minute increment?

Who’s responsible for withholding mistakes?

06/19/2012

Q: If an employer underwithheld income taxes by not using an employee’s W-4 form properly, and the employee is assessed interest and penalties when he files his 1040, can he hold the employer responsible for the interest and penalties, or even the underwithholding?