2013 changes in payroll taxes

The IRS has implemented several changes effective Jauary 1, 2013

   The standard mileage rate for the use of a personal vehicle for business miles driven is now 56.5 cents per mile.
 
   The Social Security wage base limit has been raised to $113,700.00.  Remember, this is based wages subject to Social Security withholding taxes.  If you have certain pretax deductions like Health Insurance, that reduces the amount subject to Social Security withholding tax.

NEW!
  Additional Medicare Tax withholding has been passed into law.  The standard Medicare Tax rate of 1.45% is for the first $200,000.00 of wages subject to Medicare Tax withholding.  On wages over $200,000.00, an additional 0.9% will be withheld on top of the 1.45%.  This additional amount is only imposed on the employee, not the employer.

     If you have any further questions concerning this, you may contact me, James Petty, at Total Payroll Solution via our website or by phone (765-288-PAID).

FWD: Top 10 Profit Eating Cash Flow Mistakes

     The link below is a very insightful article I found about running a successful business.  Normally I don't forward articles and just rewrite the jest of it.  However, this was well written and don't want to take anything away from the author.

http://actioncoachrogerengelau.com/2012/08/16/top-10-profit-eating-cash-flow-mistakes/

     For some of you, you can initiate some or all of the ideas in this article that may apply to your business.  Others might do well to get this into the capable hands of ones who might be able to make necessary changes if deemed. 

     One of my mentors told me, "A good employee does his or her job well.  A great employee is a good employee who also looks after the good of the company.  Find those great employees and your company has a higher chance for great, long-term success."

     Part of our commitment here at Total Payroll Solution, is not only to provide the best payroll service, but to keep our clients informed and updated on payroll topics, and provide the latest business education to help make them successful.  You can search our previous post or contact us for more business ideas and payroll information.  Visit our website, Total Payroll Solution, for contact information.

Background Search: Hiring a person with a warrant?

     I came across this article and thought I would pass this along to all who might handle hiring or other HR duties that would pertain to this.  With EEOC changes, this brings up a very interesting scenario, which was from a true story.

A 37 Year Old Murder Conviction and the EEOC Guidance: Stuck Between a Rock and a Hard Place

     This is one were I can see both sides of the story.  I guess this would be based on the job responsibilities.  In 37 years, a person can change.  If anything that I've learned in reading people, it is to trust your gut feeling.  If I'm not 100% confident in who I am hiring, I move on to the next person.  

    I believe that the job qualifying is more than what is written on the resume, references, and background checks.  The initial interview tells me more about that person than a piece of paper.  Reverences can be a stacked deck of people who really don't know the person's work ethic.  They are helping a friend get a job.  Calling previous employment places can be misleading because of what business can say and not say about the person.  Background checks only check for "criminal" history (which in most financial careers and working with children are crucial).  

     Because of the time and training needed, I hate wasting time on employees who do not last.  I can sense the commitment in a person to make the job work in the initial interview.  Sometimes somebody with less experience can be a better hirer than one with several jobs and more experience. I'd be training them how to properly do things instead of fighting their bad habits.  Somebody with more experience could be bouncing around in jobs every few years might be a riskier hirer.

    There are a plethora of things I could list.  To me, by the end of the initial interview, if I don't feel confident in hiring the person, I don't.  I just tell them there was another applicant that fit the job better.  I don't use the word qualify, as in "somebody was more qualified than you."  I do not have to share with that person who I hired or any specific reasons why someone fit the job better than them.

    If you'd like to discuss interviewing or hiring process with me, you can contact me at Total Payroll Solution, via the internet, email, or by phone (765-288-7243).

James Petty

Director of Operations
Total Payroll Solution

New Indiana Child Support Law

     This past May, Indiana Senate had passed SEA 18 into law.  What this means is when a child turns 19, no more child support payments will be made to the custodial parents by the non-custodial parents.  The law previously permitted child support payment up to the child's 21st birthday. 

     The important key points to know from this law are:
1)  This law takes effect July 1, 2012
2)  This is for current support payments due.  Arrears, past-due, and educational supports will still be due.
3)  Employers will not be sent notification of child support withholding terminations automatically.  Employers are to continue the withholding until the order to discontinue has been provided
4)  Any payments made after July 1, 2012 will be held until the paperwork to terminate the income withholding order has been processed and sent out.
5)  Non-custodial parents must request a refund of the balance being held after the termination of income withholding has been ordered.

     If you have any further questions concerning this, you may contact the Indiana Department of Child Services or James Petty at Total Payroll Solution via our website or by phone (765-288-PAID).

TPS and Preferred Providers

     One way we are different from other payroll companies is our "no-hassle after the sale" policy.  What does that mean?  We strictly run payroll.  Anything to do directly with payroll, we provide in our all inclusive pricing.  We will not try to pressure, guilt, or scare you into "other services" that related to payroll or other non-payroll business services.
     After listening to our clients who switch, they've said nothing but praise on not hassling them.  With their previous payroll provider, they would constantly get calls or mailings about the provider's other services.  One even said the provider tried to scare her into a particular service because it was the law.  After researching and calling other places, she found out this wasn't even the truth.
     When certain things are mandatory to keep your business legal, Total Payroll Solution will make sure you know and will supply you with the literature or web links to office sites of the federal and state governments.  We will assist you in anyway we can getting those items set up and maintained.
     When certain things are optional, we can also assist you with those.  We do not directly provide those services, but will work with the providers in getting them set up and maintained.  What we have done at Total Payroll Solution is establish relationships with several companies who provide these other business services. These providers do not pay us anything for sending them to you.  These providers are do not get on our list by just stopping in our office.  These providers must be recommended by our current clients.  After much research, we determine if they would be a provider worth mentioning.  We continue to get feedback on how they are treating all of our clients who use them.  Though we are separate from them, it is also our reputation at stake because we are recommending them. 
     If you need help finding a provider to handle your various business needs such as workman's compensation, retirement plans, health benefits, etc. please contact us at 765-288-7243, or visit us on the Web at ADDITIONAL SERVICES.  These companies are separate from Total Payroll Solution.  We do not get compensated for any business you may do with them. Our relationship has been established through years of trust and integrity.
     Please contact James Petty at the number above or at jpetty@tpspayroll.com if you are a current client and want to recommend a provider that you use.

1099 Requirements for 2012: Appealing

In 2010, the Patient Protection and Affordable Care Act (“Health Care Bill”) was signed into law.  Sounds good until you read what else was included in that bill to get it passed.

Starting in 2012, the IRS has new laws in the 1099 reporting requirements.  In the pass, businesses were required by law to send 1099s to any independent contractor that received $600.00 or more within the calendar year.  The government felt there was a loss in IRS tax revenue due to unreported taxable income and  illegal tax deductions, both with individuals and businesses.

The new law will require that all business types must send 1099s to every individual and business with whom they have spent $600.00 or more.  It seems like a reasonable request, until you realize how many different places a business can spend more than $600.00 or how many places a business can have that spends more than $600.00 with them. 

Take for example a furniture company.  Most would have some independent contractors for their business like furniture repair, reupholster, etc.  Say a big, busy company would normally have 10 1099s that they would send out.  Most furniture companies carry over 30 companies with whom they buy furniture from.  Lets say they only buy gas at one place for their delivery trucks and use one repair shop.  Any software renewal and monthly fees, any sales training literature, and training trips, any trips to furniture expos, etc. These could total easily up to an additional 50 1099s that have to be compiled, filled in, sent out, and reported.

Take for example the receiving end of things.  Staples is a pretty well know and used business supply store.  The store in Muncie, Indiana probably serve most of East Central Indiana.  If only 10% of the businesses shopped there or online and spent over $600.00, Staples would receive over 500 1099s just from that area.

 Now take the IRS, who seems to be, at the very least, two years behind on 1099 and W2 reporting.  They now have an extra 1100+ 1099s to process just by the two examples above.  550 being reported by reporter, and 550 by the reportee.

This new law requirement will greatly increase the administrative burden on all businesses, as well as the IRS.  This requirement is going through its appeal.  Various Representatives to the US House have been involved such as Todd Rokita and Dan Burton.  Many have websites with links to sign petitions to appeal this law.  I would greatly encourage everybody to sign the petition, specially if you are a business owner or carry out administrative duties for your company.

As part of Total Payroll Solution's service, we do free 1099 fillings for all of our payroll clients.  There is a small cost for non-payroll clients to do this yearly filing on their behalf.  The forms are filled electronically with the IRS and confirmations are sent to all who file with us. Electronic copies are also sent to the companies for their own record keeping.  At Total Payroll Solution, we believe in giving our clients more than they expect.  You won't find any nickel-and-diming here, but an upfront cost that you can expect to be consistent.

Please contact us via our website, Payroll Quote, or by email at tps@tpspayroll.com for a free quote.  You may also contact us by the same email or via website, Contact, for more information or question regarding 1099s and other payroll issues.

Background checks

Should you use social networks as part of your background check?
Yes and No. Yes. You can learn a lot about potential employees. You can understand their character more by the things the post and say, as well as who they are friends with, and what they allow others to post on their wall.
No. Some people might wave the "invasion of personal privacy" flag around. My personal opinion is that you allowed it to be public when you signed up for these sites. However, the more important issue is it can also be misleading and you could risk not hiring an employee that could take your business even further than you could imagine.
The following article came across my desk the other day and I thought I'd share it with you. I think it best captures the reason why you can't always rely on these social network sites.

A Modest Proposal: Social Network Background Checks

So there I was on one knee with my hands cuffed behind my back in Little Italy on a beautiful day in May of 1996. Click. Someone took a picture. People started to gather around. More clicks and flashes.

I’ve been thinking a lot about this moment for a few months now since I’ve been contemplating the role social networkings sites should or should not have in the employment background screening and hiring process.

Why? Because this was one of the most important days in my life. It was the day I proposed to my wife. You see, I decided to get creative with my proposal. I always thought it would be fun to have a police officer pull me over with my wife in the passenger seat and then instruct her to take the registration out of the glove compartment. Of course, instead of the registration, she’d find the ring. And that’s exactly what happened. I just didn’t know that the officer (who was a friend of the family) would actually put me in cuffs (that was a little side idea he and my father hatched unbeknownst to me) but it definitely made the moment seem all the more real.

So why am I telling you this story? I had mentioned that a number of people took pictures. Some of those people were members of my family who were lurking around waiting for the big moment. Others were complete strangers that couldn’t believe the spectacle. So far as I know, those pictures were never posted on Facebook. But what if they were and a prospective employer saw them? Would they understand this was a gag? Would they know it wasn’t real? What if they never asked me about it?

What if it was real? Should an employer be able to use that against me?

There’s been a lot of talk for a couple years now about whether employers can and should use social networking sites are part of their employment screening processes. Findings from our annual background screening survey showed that of the nearly 800 respondants, 25% used LinkedIn, 34% used Google, 30% used Facebook and 22% used Twitter to screen candidates. 44% said they would like their screening provider to offer this service in the future. And while I was staunchly against this practice for a long time, I am slowly softening my position. However, it is stories like these that continue to give me reason for pause.

I’m sure we all have a story or two like this. So what do you think? Are social networking sites fair game?

P.S. In spite of the fact that I scared the begeebies out of my wife, she actually said yes (sucker!) and we’ve been married for 14 years.

I hope you found this article as useful as I did. One, I watch what I say and others post about me very carefully. Two, I learned to the information I might find with a grain of salt. If I'm really troubled about something, I will ask the potential employee to explain. Generally, if explained, good or bad, I'm more likely to hirer them than one who refuses to explain.

James P
Total Payroll Soluton