Archive for the 'Payroll Taxes' Category

Avoid NJ DOL Audits- S-Corp Owners Should Take Reasonable Compensation

January 8th, 2014

In an S-Corporation, a popular choice of tax entity among businesses, an owner who works for the company is required to take wages. How much of the company’s income is classified as wages versus S Corp. income (reported to the owner on Form K-1) is up to the owner. The net income will be taxed regardless of how it’s classified. The big difference lies in federal employment taxes, which are not paid on K-1 income.

Good News for NJ Employers: Federal Unemployment Tax (FUTA) Surcharge Avoided

November 1st, 2013

New Jersey employers can breathe a sigh of relief, as Governor Christie has announced that new fiscal management practices have brought New Jersey’s Unemployment Insurance Trust Fund into solvency for the first time since 2009. This spares businesses from a drastic tax surcharge, as Federal Unemployment Tax (FUTA) was set to increase from the base rate of 0.6% ($42 maximum per employee) to 1.5% ($105 maximum per employee). The surcharge is imposed when a state has borrowed from the Federal Unemployment Trust Fund and increases each year. In 2012, NJ employers paid 1.2% due to the surcharge ($84 maximum per employee). By repaying the loan to the Feds, employers will not be subject to this surcharge on their 2013 FUTA wages and will only pay the base rate of 0.6% ($42 maximum per employee).

NJ Employer Contribution Deadline Arriving Soon

July 19th, 2013

Beginning 2012, employers no longer receive an annual paper Notice of Employer Contribution Rates. Instead, the notice is now accessible through the Tax Web Enabled System (TWES). As a result of this change, it’s urgent that you check your TWES account as soon as possible.

Payroll Cards Under Investigation by N.Y. Attorney General

July 12th, 2013

New York Attorney General Eric Schneiderman has launched an investigation into companies that pay hourly employees by depositing payroll onto pre-paid cards. Why the concern? Payroll cards, like debit cards, typically have fees associated with inquiries, card replacement, ATM withdrawals, or inactivity. Schneiderman’s concern is that the fees associated with these cards may be insufficiently disclosed or excessive and that the fees reduce employees’ take home pay. Payroll cards can raise a host of legal issues for the employer as well.

Attention NJ Employers: 2013 FLINT Deadline is June 23rd

May 28th, 2013

What is the Flint assessment? The NJ DOL borrowed money from the federal government to pay Unemployment Insurance Benefits. NJ law requires the government to pass on the interest costs of the loan to NJ employers. Is this something new? It’s comparatively new. This is the third year of the assessment. How much is it? [...]

Should I Pay My Spouse a Salary?

May 27th, 2013

It’s not uncommon for one’s spouse to work in the family business, whether as office manager or in some other capacity. Let’s assume that Dr. Sally Surgeon owns a medical practice. Her husband, Josh, is in charge of all IT operations and billing. Is it worthwhile for both spouses to receive a salary? At first [...]

New I-9 Form Required as of May 7, 2013

April 30th, 2013

Beginning May 7, 2013, employers must use a new and revised version of the Employment Eligibility Verification Form I-9 for new hires (employees who do not require re-verification do not need a new form). Form I-9 has been expanded from one page into two, and has several revisions including additional data fields and improved instructions.

Budgeting for 2013 FUTA Payments

December 12th, 2012

Unless NJ repays the loan in 2013, the penalty tax will increase again to 0.9% for 2013. You might want to budget for this in your April, July and October 2013 FUTA payments.

New FUTA Rate-End of 2012 for NJ Employers

December 4th, 2012

In 2011 the FUTA rate on New Jersey wages was 0.9% on wages up to $7,000. Since New Jersey has not repaid its loan from Uncle Sam; the rate increases to 1.2% retroactively as of January 1, 2012, and will be capped at $84 per employee for 2012.

IRS Offers Relief to Victims of Hurricane Sandy

November 5th, 2012

In the aftermath of Hurricane Sandy, the IRS have taken action to aid those affected by the storm. It has postponed various tax filing and payment deadlines.

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