Medlin Software, Dennis

Have not had to restore from Carbonite (thankfully). I believe you can ask them to send you CD/DVD's of whatever data they have from you, if you are having trouble restoring using their software.

For the future, do not rely on any single or even two methods. Have a copy you make yourself, a copy on a couple of online services, copies you mailed to a second secure location, etc. Paper records still come in handy as well.

EDITED to add: Please don't say "matching" (smile). Since FICA was split into separate calculations, EE and ER have had separate calculations, which may or may not be the same. For 2011, SS calculations for EE and ER are different, with many employers not realizing they cannot "double" or "match" the EE contribution to get the proper ER contribution.

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Be careful of any flat percentage amount to add to the gross to cover employer liabilities.

12% sounds a little low to me. 6.2% for SS, 1.45% for Medicare lowers the rest of the reserve to 4.65%. Could work over the long haul if a low WC rate class for all employees, but Q1 could be tough with SUI and FUTA, depending on when WC payments are made.

If one sets up a separate account, it should take no effort to print a report showing actual liabilities instead of a percentage of gross estimate.

CA example:

SUI 6.2% (first 7k)

ETT .1% (first 7k)

FUI .8% (first 7k)

SS 6.2%

Medi 1.45%

WC 8.0% (average over classes of employees and earnings for this particular employer)

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22.75%, with at least 15.65% on most wages.

WC rates vary widely, office work is under 2%, roofing work is over 50%.

I have a couple of clients currently who can afford the _employees_ just fine -- as long as they go without pay! There have been some very interesting gymnastics as they wait for late payments from their customers while trying to keep their own mortgage current.

It is brutal when you don't own a business, but "own" a "job" that is not paying you because you are working so others can get paid.

To add to Catherine's reply, I like it when the actual deposits are done every payday, even if not "required". If you cannot afford to pay the complete payroll every payday... you cannot afford to have the employee(s).

If you can afford the employees, and want to spend time trying to make use of float (hard to see how it can be profitable on a per business scale these days), that is different.

If someone is to sign checks for some things, and not others, then additional accounts may be needed. If the same people can sign for any item, then one account is perfectly fine.

A separate account does nothing to ensure payment, unless a separate line of credit is available for the payroll account. Many times a deposit/transfer has not taken place before payroll was processed.

Any "security" reason is a waste of time at best. Checking accounts are not secure and can't reasonably be made any more secure than cash. A separate account does zip to keep someone from accessing company funds improperly.

Some might say every additional account adds a level of complexity and less security than a single account.

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Like for home use, I think a business should have at least two accounts (at two different banks). If something happens to one account, having a second, with enough funds in it to get by for several business days, keeps things rolling until the mess is fixed.

I'll bite. Why is the corp using separate accounts? What are they trying to accomplish?

rfassett,

No can do on the "ALL payroll checks are cut when all other payroll checks are cut", Tom is in CA, so there is a good chance the potential client is in CA. CA requires terminated employees to be paid immediately. For unannounced quits, the CA employer generally has 72 hours to pay.

A. Paychecks are cash basis. Date on the check (constructive receipt, the date the employee could have had access to the funds) is the trigger.

1. Should have deposited based on the check dates. The "regular" payroll cycle is not a factor. In Pub 15, the deposit schedule instructions mention "payments made on" with no reference to a pay cycle or pay period.

2. See A. The 941B is correctly showing the liability based on the check dates.

There could be other issues as well, as "every other Monday" does not not be proper for a 100k+ liability employer.

Based on what is in your message:

June 17 payroll has 100k+ liability, deposit should have been made by June 20.

June 18 through June 30, and out of cycle checks should have had their liability deposited using the semiweekly schedule, unless the accumulated liability topped 100k (trigger for next day)

July 1 payroll had 100k liability, deposit should have been by July 5, not July 6. 2% of a 100k+ deposit (the penalty) is not something to sneeze at.

Added: Any time I hear from someone with deposit timing issues, I ask them if they have the money (if not, that is a whole other issue), and to keep it simple, make the deposits the same or next day as the payroll checks. There are more important things for a business owner to worry about that trying to eek out a few cents of interest hanging on to withheld taxes until the last minute.

I believe the quote came from the GAO...

The 53 includes (insert the proper current term here: territory, possession, something else) PR and VI, but excludes American Samoa, Guam, and the Northern Mariana Islands.

I an not vouching for any of the links, but when taken in total and context, you should be able to get the idea... It is impractical to believe the "credit reduction" system will keep the FUTA fund afloat, let alone pay back what must now be nearing 50 billion in loans.

Only 8 states still use the 7,000 subject wage limit. For example, Washington is 37,300.

http://www.americanpayroll.org/members/stateui/state-ui-2/

http://www.ows.doleta.gov/unemploy/content/data_stats/datasum10/DataSum_2010_3.pdf

http://www.gao.gov/new.items/d10692t.pdf

"As of April 1, 2010, 34 of the 53 state trust funds have outstanding loans totaling $38.9 billion from the federal government to pay benefits (see fig. 1)."

http://money.cnn.com/2010/04/08/news/economy/state_funds_jobless_benefits/index.htm

http://projects.propublica.org/unemployment/

http://workforcesecurity.doleta.gov/unemploy/content/midsession_review.asp

http://www.talx.com/News/articles/Journal_of_State_Taxation_JulyAug09.pdf

http://www.thomasandthorngren.com/comments-about-federal-unemployment-futa

http://www.trnstaffing.com/news-events.aspx?newsid=61

http://www.mcclatchydc.com/2010/11/09/103399/californias-unemployment-fund.html

http://articles.sfgate.com/2009-06-02/news/17208294_1_jobless-benefits-payroll-taxes-unemployment

http://www.allvoices.com/contributed-news/8343113-obama-administration-proposes-increase-in-futa-tax

http://www.sor.govoffice3.com/vertical/Sites/%7B3BDD1595-792B-4D20-8D44-626EF05648C7%7D/uploads/%7B3BCE179C-DD26-46E0-84C7-017C84D471E1%7D.PDF

http://www.ajc.com/business/georgia-has-no-plan-884852.html

Just for grins...

The temporary surcharge was implemented in 1976, and has been extended every time it was supposed to expire. Based on that alone, some (many?) are advising to plan on the surcharge to be extended again, or made permanent. Could happen in the second half of the year, or even later I suppose. Personally, I watch the IRS forms division for these changes, as they are the ones who can force some time pressure on the elected officials. Form 940 is usually set in December, so nothing "has" to happen until then. If the surcharge gets retroactively added back, the "extra" amount would likely be due with the 940.

IMO, the current UI "system" will not continue as is. Too many states are in debt to the feds, and have no signs of paying back the amounts in a reasonable time. The key to the proposed changes is raising the FUTA subject wage amount, and indexing it. This will force the hand of states without the political will (such as CA) to raise their own subject amount. CA is the state in the most UI debt, reported to be "eating" 40 MILLION dollars A DAY from the federal fund as of November 2010 (last time I really looked).

I will save that term in my ball bag for sometime when I can pull it out on an unsuspecting coach. If only life allowed me to use rule 9.01c...

Click the Program Documentation button on our web site. You can ask questions whether or not you are our customer.

Send your Medlin questions to [email protected]

For your particular question, you can search the program help for "shareholder".

My sons and I are baseball umpires. USSSA tournaments and High School. It was one of those strange twists - instead of complaining - we decided we should "put up" and are now in our ninth season. The most fun is the couple of times a year when we work a game together.

Retired Greyhound racing dogs. One owns us, and we help get others adopted. Heading out after work to get nine more to place in foster homes in the area - twenty-nine are on their way (as I type) from Oklahoma to California to work hard at being retired.

Formerly, Sprint Car, Kart, and BMX racing... and if you go way back, hardtops at Vallejo Speedway most every Saturday from April to October from birth until the track closed.

Dennis

Employer has no obligation to make sure the employee's tax return works to no owed amount...

Employer has to withhold based on a valid W-4 (employee has the obligation to submit a W4 that meets their needs) or at single 0 if there is no valid W4. Other than single 0, or a valid W4, an IRS lock in letter is the only alteration allowed.

No valid W4, employer HAS to use single zero.

Now 18k, if for a full year, is not much these days. With the 2010 credits, that FWH certainly may have been a proper calculation, possibly even for single and zero... (off the top of my head)

Either way, if the employer reasonably withheld what they believed was correct, the employer has done their part. The employee has the final responsibility. Not checking and keeping their stubs is a good hint that the employee is not really in a position to make those types of decisions.

My unpaid and unguaranteed opinion is you have it correct.

CA DE 44 (CA state guide) has a "types of payments" chart similar to the federal chart.

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Added, be sure there is definition/instructions for calculating which item first, as far as determining the amount, or that the amounts are based on the total earned.

125, if there is no cash option, is excluded from FUTA and most SUTA.

If there is a cash option, the waters get very murky, especially with regards to certain states.

401(k) is subject to FUTA (is part of taxable for calculating FUTA).

Circ E has a chart which covers special rules for various types of services and payments.

Check the agency responsible for the form. In most cases, when the form is final, it is available on their web site. 9For instance, 8825 was finalized 2/12). There are some that have a developer process, which is not available to the public, but not many.

Once you have a confirmed final date from the agency, ask your software provider what their release date is.

The IRS is pretty easy, their draft forms are available for viewing, and for the most part, don't change significantly before final (sometimes wording, but very rarely positioning of the data). IRS had Notice 1036 posted and available BEFORE the actual laws were signed!

NYS is a pain as they contract out with another company to process certain forms, so the approval process is lengthy and makes little sense at times.

Signed, A person who has to answer this question several times a day about Form 941...

The IRS used to keep a chart of release dates and expected dates, but wisely, they removed it as it was only useful for entertainment. EVERY year, Pub 15 was expected to release a few days before Notice 1036. Notice 1036 is the "early release" calculations which are part of Pub 15...

Still shows on the "draft" page of the IRS site. While I don't speak for ATX, for me, until the form is final (not on the draft page) I don't "run" with it...

If the form is required to be marked with an ID tracing it back to the creating vendor, not including a "draft" message, when the form is a draft layout, can cause issues for the vendor.

The news hits an old dough slinger (me) hard :-)

A quick search showed me these are usually for those with little cash on hand. By "buying up" the interest rate, the amount is typically credited against closing costs, not paid out in cash. My head started to spin as to what sort of reply to offer, until it hit me, the amort is for "prepaid" interest, one might assume to spread the actual interest over the life of the loan instead of allowing a big year one deduction if some of the interest was prepaid. Since a negative point situation is not prepaying interest, I am guessing it can be ignored.