Medlin Software, Dennis

Busy - always. Besides being sure of death and taxes, I can be sure of lifetime employment as payroll never gets easier.

At the top of our site, there is a link to information on the HIRE act. I will be posting sample pdf's as I get them finished.

Tom, Google "HIRE Act 941". You will find several blogs and other references. After reading a couple, you will get a good handle on the changes/requirements. The IRS site has a news item as well. The retention credit will likely be a separate form/worksheet (not a payroll item specifically) the employer fills out to get the retention credit. It affects the employer/business tax forms, not payroll reporting. Employers can come up with their own affidavit according to what I have read, and the IRS will likely have a boilerplate form one can use. There is no provision for filing or verifying such affidavits, just have to keep them in case of audit. The liability of the facts is on the employee, not the employer, with no penalty I can find other than criminal perjury. If the retention form/worksheet needs something from Medlin we cannot already provide, we will likely come up with something at that time. Medlin Payroll: Doing the coding now (well I am taking a few minutes to write this, and throw down a soda and sandwich) To "mark" the employee, you will enter "HIRECREDIT" in the employee memo field. We determine qualified employees by checking to see if "HIRECREDIT" is in their memo field, then checking the hire date (an existing data field). Payroll Tax Summary - A new column in the top of the report (if applicable) showing the HIRE credit amount. The "deposit" amount will be reduced by the credit as needed. On quarterly tax summaries, the 941 section will show the appropriate items for whichever 2010 quarter is being printed. 941b - No changes to the form. Calculations include appropriate checks to qualified employees, including not reducing >Q1 liabilities for the Q1 carryover. 941 (any quarter) in Version 4.2 Revision 18 and later - limited to checks for 2010 since the forms will not work for any other year. Q1 941 - unchanged Q2 941 - Updated to the current draft format, including form layout and new calculations. Q3/Q4 941 - Updated to what I think the form will look like, the draft Q2 form, without the Q2 12c, 12d, and 12e. I suspect this form is at least a month away from an official draft version. Dennis

A draft format for Q2 941 is available if you search the internet long enough. (Not yet posted on the IRS site.) Speculation is there will be three versions of the 941 for 2010: Q1 Q2 Q3/4 (with the new 12c, 12d, and 12d from Q2 removed) --- Form 941b is not expected to be changed.

In my case, the amount received as foster care payment plus the amount of medical expense paid by the county/state was more than the amount of financial support we provided, so we failed the support test.

One other item to note - if the foster parents do take the dependency, they have to also report all monetary reimbursements received as income. At least for me, it was/is better not to take the dependency and keep the reimbursements as non-reportable...

For printer drivers, you can always fall back to the old standards. Deskjet 550, Laserjet II, etc. This is something that is usually needed when a new printer model comes out (takes several months of shelf time for the driver to be "updated"), and for new OS versions. For nearly every brand of printer, there will be an older model driver in the Windows setup that will work with newer model printers. For the most part, any driver (printer or other) included with Windows (one you do not have to use a disk or internet to install) is fairly well vetted.

And there it is... Silly. I can fill in the forms in my lousy scribble and be compliant (and which get scanned), but I cannot use a good quality printer to make the form - of which the body should not be scanned anyway... The equipment argument is silly. One can print other IRS forms, ones with incredibly tight and inconsistent spacing, and be legitimate, but not 1099's, which have nice wide spacing and rarely change format. (Referring to a 941 which, again, looks to be changing alignment for 2010, for some unknown reason.) Now if I were working in the equipment/programming room at the IRS or SSA, I might feel differently. Oh well, we play the cards we are dealt, or we don't play at all.

Pub 1179 is the document for substitute 1099 forms. The latest release of 1179 was Oct 2008. There is nothing I see where anything other than red dropout ink can be used on Copy A. "Proposed substitutes of Copy A must be an exact replica of the official IRS form with respect to layout and content. Proposed substitutes for Copy A that do not conform to the specifications in this revenue procedure are not acceptable. Further, if you file such forms with the IRS, you may be subject to a penalty for failure to file a correct information return under section 6721 of the Code. Generally, the penalty is $50 for each return where such failure occurs (up to $250,000). No IRS office is authorized to allow deviations from this revenue procedure." "All print on Copy A of Forms 1098, 1099, 5498, and the print on Form 1096 above the statement, “Return this entire page to the Internal Revenue Service. Photocopies are not acceptable.” must be in Flint J-6983 red OCR dropout ink or an exact match. However, the four-digit form identifying number must be in nonreflective carbon-based black ink in OCR A font." "Important information: The forms produced under these specifications must be guaranteed to function properly when processed through High Speed Scan-Optics 9000mm scanners. Forms require precision spacing, printing, and trimming."

SSA has allowed laser printed plain paper W-2/W-3 since TY 2001, providing you are using software that has been approved by the SSA (the software vendor has to put their vendor code on the forms). As far as I know at this moment, IRS does not offer a laser printed plain paper 1099 approval, although I am rechecking. Have heard that some print 1099's on plain paper without problems, but as a software provider, I cannot offer it until there is formal approval/acceptance.

Jainen, I can see your point, but it also supports mine. People have the right to do what they want with their earnings. Increasing withholding with no tax increase (and not even trying to pretend it is not a budget gimmick) is wrong. That is why I am so strongly for willingly rendering what is due, but basing it on actual calculations of liability, not an arbitrary "marital status", "allowance" etc. I have no problem with withholding a certain amount in case something changes, but hearing about thousands of dollars in refunds when the person may need a refund loan to pay a bill is silly. I may be biased because I have to follow all the state and territory withholding methods, as there are some CRAZY methods in use... CA is creeping higher on the list.

Good information Wayne. I do read here how many clients people refund shop. It seemed reasonable to speculate if one gets clients because of the refund they can help obtain, it may not be in their interest to "reduce" the refund by letting the taxpayer use their money as earned. I have no problem paying taxes owed, it is a good thing to have earned enough to owe taxes... I do try to delay payment as long as possible. If the law is deposit same as last year's liability or be within $400 of current liability, I will do whatever is the minimum to avoid penalty. I think of it as an interest free loan, being the same as paying utility bills on the due date instead of months in advance. I just never "got" using withholding as a savings(?) plan. If one is so bad at money management they cannot make their own savings deposits (in an interest bearing account - even at today's rates), they should probably be using a personal money manager. Since I have the ability to do so, I have little or no withholding until December, and withhold what is needed in December. A decent part of my income is in December anyway, but I even used to do this when I was an hourly employee. There is one caution to doing this, I did get a lock in letter a year or two ago because of no withholding on a decent amount of earnings. Since my employer knows of my strategy, it was not embarrassing to me, and a 5 minute phone call to a live person at the IRS cleared up the issue. The IRS rep saw I paid on time, had no penalties, and cleared the lock without even inquiring as to my withholding strategy.

Personally, I never get a withholding refund from CA or Fed as I make sure to withhold only enough to avoid penalty... No tax preparer is likely to advise that as clients seem to shop for the biggest refund. Funny money is all it is, delay a civil servant payroll for one day to shift the pay amount to the next fiscal year, increase employee withholding but not liability, juggle the percentage of deposits to front load the tax year, etc.

CA EDD has posted the formula/tables reflecting 10% increase in withholding (no increase in tax liability) to take effect on paychecks dated Nov 1, 2009 or later. Let the allowance adjustments begin!

And a good answer. When I fill them out, they want a doctor and dentist name, as well as a phone number. I have been putting in 911 for years as the only time the school should be calling for medical for my kids is when 911 is needed. We also use one phone number and only one "home" phone number. It call forwards to a few others until someone answers. Was great when the kids were young, they only had to memorize one number and were sure to get mom or dad...

Don't use HM, but when similar problems crop up... there are two things I do first. Bad Cache. Clear the browser's cache and try again. Spoiled Cookies. Clear the cookies from your browser and try again.

Julie. Check to see if you are blocking cookies by default. Most BB sites require a login cookie, at least for the session, to be able to post. Firefox Tools Options Privacy Look the the Cookie settings. If you want to continue to block cookies, then "allow" atxcommunity.com using the exceptions button. Assuming the cookie setting was the issue, once you allow the cookie, you should be able to log in and post from FF. Dennis (using FF)

Paper or paperless: Prepare for a disaster. Test your recovery methods. Review/repeat at least once a year, if not once a quarter. Plan/test for: Simple stuff. Computer failure/theft, power outage, internet outage, phone outage, etc. Major stuff. Office destroyed, unable to get to office for days, unable to use phone for days, unable to use internet for days. Worst case. Imagine having to start over with no access to your current computer equipment, on site storage, phone (cell and LL), internet, etc. Can you go somewhere else (a friend/relative's location in another city), buy a new computer and other hardware, and be back in business in less than 72 hours from arrival? --- know how to get mail and call forwarding processed quickly actually test starting over with a new/replacement computer and peripherals

Similar to what I do. Not exempt, but a large enough number of allowances to have little/no withholding for 11 months, and to not go over 10 allowances for CA (in CA 11 or more allowances requires employer to send a copy to the state, Fed did away with that issue). In Dec, I figure my liability and have it withheld as additional, just enough to avoid penalty. I take a weird pride in having to make payments in April instead of loaning money with no interest. I did have to deal with an IRS lock in letter the first year they started those, but a quick phone call and the rep's review of some records got the letter rescinded. A lock in letter could be embarrassing in some cases. Even if one has to deal with a less than cooperative employer/payroll department, an employee can make this work as long as they change their withholding information in November, in case the employer takes advantage of the 30 day window to implement the changes. What makes it funny (to me) is my first job where I made enough to be subject to withholding was one where I was also doing the payroll, and I figured out this strategy way back then. I don't understand why so few adopt a similar strategy - although I suppose it is simple fear of the government. --- While not a tax preparer, I can safely guess far too many clients judge service on how big their refund check is, so preparers have no incentive to offer withholding advice, no matter how sound it may be...

For that those that help clients with withholding... CA has changed WH effective immediately. All brackets are up .25% in an effort to minimize under withholding due to the .25% tax hike for 2009. Employers will not be getting new booklets for at least a couple more weeks. Also, the low income exemption amount was lowered a bit, subjecting certain lower income folks to CA WH. CA WH Update Info AZ is updating their "percentage of FWH" state withholding May 1. This appears to be an effort to minimize under withholding due to the lower FWH rates from the tax stimulus. Better still, in July 2010, AZ will begin withholding using their own formula/tables instead of relying on FWH. Those states using FWH in their calculation are likely tiring of getting Bush, Bush, and now Obama'd (mid-year FWH changes). There are only a few states left that adjust their WH based on FWH - AZ is the last state using a percentage of FWH as their withholding method. AZ WH Update Info NY changes significantly beginning May 1. NY WH Update Info (I don't make the withholding rules, I make a living dealing with them...)

Couple of things... Medlin Payroll has been $50 per year for a few years (sorry Gene...) It is correct we do not track/calculate/report/pay sick or vacation. Tried coming up with such a system many years ago. The configuration and setup was more complicated than the entire program. Why? There is no required/standard method of sick/vacation earning/tracking/payment - each employer can come up with nearly anything they want... It is possible that each employee could have their own settings as well. Since we try not to be the complicated program that can do all for all, we dropped the idea pretty quickly.

Long winded answer ahead... (anytime I can stir up thoughts about record retention I do) Medlin's Accounts Payable can be used to pay, track, and report information for vendors needing a 1099-MISC. We do not mix employees (W-2) and non-employees (1099) in the same program as one might call that "evidence" of employment... We do not e-file 1099's at present. We find "encouraging" the printing and mailing of the forms also encourages record retention - something many folks forget to do. While many tout paperless offices, I have not found any computer or storage media I would trust with my record retention, at least not enough to stop maintaining paper records. I also find it easier to open a file cabinet when an old record is needed versus trying to find, open, and print an electronic record. I am not saying electronic record keeping is bad. Some of the things I have yet to get past are: Media changes. 5.25, 3.5, LS-120, Zip, tape drives, etc. Media styles come and go. If you store on a certain type of media, what if you do not keep the needed hardware? Extra work is needed to move data from old media to current, increasing the chance of loss. Hard drives. Mean lifespan is 3 years. Not enough for my needs... Portable media. Portable means easy to lose. Tax agency failures. 2005 saw a problem where the IRS lost a large amount of 941 forms. We were getting questions on how to reprint these forms for several years. Maybe there was one person who had a reliable backup but the overwhelming majority had no backup and had changed computers since 2005. I am sure something like this will happen again... --- Paper records are easy. If you have to save 5 years, use 5 cabinets. Every 5 years, destroy the old data and use the empty cabinet for the current data. If your paper records are destroyed, you can use your online and off site backups. I do backup a couple of times a day using a series of automated and manual steps. Cobian to manage what I backup, compression, encoding, and password protecting. Mozy for online storage (also encodes and password protects). DVD's to keep copies in the office and for copies to take home. I never have more than 4 hours of data at risk (that could be lost) and I have 4 weeks of backups I can choose from. Before online backup was common, I would e-mail the files to myself and leave them on my mail server. The final thoughts: Can YOU, at this moment, produce a record from 5 years ago? Can you do so in under 15 minutes? Under an hour? Have you actually tried to? Time is money. Time spent trying to dig up records costs you money as well as your client.

You could always try [email protected] :D

For those that process payroll, CA released (today) withholding changes (up one quarter percent across board, lowered low income exemption). New calculations should be implemented ASAP. New CA WH Calculations NY State WH changes as of May 1. NY State WH Changes

Aflac is a company/brand/duck name, not a specific type of deduction/payroll item. There can be pre-tax items (Sect 125) as well as after tax items in what sometimes is referred to as "Aflac" deductions. Check with the plan provider/adviser/documents as well as the individual employee records. I know this is not much help...