STATEMENT OF MUTUALIZED BENEFIT CHARGE

I am all for helping people who truly cannot find a job. That is a point I want to make and hope you remember.

IN DWD, who handles Indiana's state unemployment, has been passing around notices about a Mutualized Benefit Charge (MBC). Because we have so many people on unemployment benefits, IN is taking money from honest, hard working businesses who play by the unemployment rules, continue to hirer new people, and have a very low turn over if any. They are having their "account" that they've been paying their SUTA into debited. This will undoubtedly raise their SUI rate next year. (SUI rate is calculated by the ratio of payroll compared to amount accumulated in their "account").

Now, I can understand part of this if the person was let go by a company that no longer exist, or the company's "account" has emptied. However, and I quote straight from the notice sent out, "The MBC is simply a more equitable way of determining a company's share of benefits paid to any unemployed person when the former (base period) employer is held not liable or responsible for those benefits." I thought a person did not receive unemployment benefits if they were terminated for just reasons. Why are we paying unemployment for those people

I believe our SUTA is having some issues here. I understand the job market isn't what it was 5 or 10 years ago. It won't be for a long time. If you were working in a factory job, unfortunately, there is little hope to see jobs like that again at the same level of pay and benefits. However, IN DWD isn't making it very motivational for those to go get a job.
1) The benefits they are paying out is more than what most people would get paid for if they went out and got a job today. I know this for a fact. Family and friends have shared this with me. They are planning on living on unemployment as long as they can.
2) About a year ago, we had several clients ready to hirer dozens of new employees. Then, Indiana decided to extend the benefits another year. All of a sudden, these "to-be-hired" people could not be found anywhere. I am glad to hear that Indiana did not extend the benefits again. I have a feeling that we will see the unemployment numbers decrease rapidly once their benefits run out.

Sorry to the responsible companies out there. You work hard and pay your due diligence, but the irresponsible companies and the unemployed who are irresponsible just made your over head a little bit higher. Unfortunately, I don't think this will be the end of the effects caused by these unemployment issues.

Once again, I want to state I am in 100% support of those unemployed who are honestly made unemployed and are earnestly seeking employment. I hope to all that we see your names come by our desk as new employees to our clients. Good luck to the companies and the unemployed!

IRS Tax Payments

In my extensive payroll experience dealing with the IRS, I found three things to be true...
1) They love to change rules, codes, etc.
2) They poorly publish these rules. If your lucky to find a publication of these changes, it's usually poorly explained.
3) They IRS is usually confused about these changes as well. Try calling the IRS and getting a hold of three different people. Ask them the same question and you'll more than likely get three different answers.

The IRS is changing the way companies make their federal tax payments. This is taken from USBank's website.

"Do you drop off your federal tax payments at your bank? If so, you should know that the Internal Revenue Service (IRS) recently announced a new rule that calls for most businesses that now pay their federal taxes with a paper Federal Tax Deposit coupon (IRS Form 8109) to pay electronically as of January 1, 2011. Additionally, banks will no longer be able to accept tax payments. "

Can they make paying your taxes any less convenient? I've helped businesses set up their own EFTPS on the EFTPS website. From filing out the application form to being able to make that first tax payment online, this process can take anywhere from several weeks to several months. Then you have to figure out the EFTPS website and remember all of your passwords and pins.

One benefit of using Total Payroll Solution as your payroll service provider is we set up, make those electronic payments, and maintain your account for you through our system. We can even set those payments to be paid when due, at the earliest possible, or anywhere in between.

Please contact us for a payroll quote or if you have any questions on this new IRS rule. You can contact us through our website or by calling 765-288-PAID (7243). I look forward to talking to you soon.

James

EFTPS EMAIL PHISHING SCAM

There has been a scam going around. You may receive an email that looks something like this:

"Subject: Your EFTPS Tax Payment ID has been rejected.

Report ID: ***. Your Federal Tax Payment ID: *** has been rejected. Return Reason Code R## – The identification number used in the Company Identification Field is not valid. Please, check the information and refer to Code R## to get details about your company payment in transaction contacts section: http://www.eftps*******7.com/contacts"

This is a scam to get you to click their link or call them. They tell you your tax and/or bank information is out of date. They will tell you that you owe outstanding taxes plus penalties. You can either give them your bank information, send them a lump check, or set up a payment plan.

This is not a legit email. The IRS will never initiate contact with a tax payer via email. When you pay your taxes via EFTPS website or batch program, if a payment was returned because of incorrect information or insufficient funds, it would be posted as such. When you call the IRS, they would be able to tell you immediately if there were any payment issues.

Further more, if any of you have ever tried to set up EFTPS through the website or batch program, you would know the information required to get started and all the hoops it seems you must jump through before you could ever make your first payment. Those systems are managed by the IRS. You cannot change your tax or bank information on the website, but only through contacting them via phone. The EFTPS batch program can submit a change request, but it has to be approved first by the IRS. Either way, their program would never allow an incorrect "file" to be submitted.

This is one of the benefits of doing payroll with Total Payroll Solution. We keep tabs on all the tax payments, keep your bank information up to date, and will notify you if there is a problem with the tax payment we submitted for you. Please call us at 765-288-PAID (7243) or contact us through our website, www.TPSpayroll.com, for more information and a price quote.

Employee Versus 1099 Contractor

I get many clients asking if they can pay a person as a 1099 contractor? You can pay a person as a 1099 contractor if your work relationship to them is with in the proper description. GET IT WRONG and your company could be looking at some hefty fines and penalties. Your company would have to pay:
1) All the overhead taxes (Social Security, Medicare, FUTA, SUTA, and maybe more depending on your state)
2) Late penalties on the unpaid amount
3) Daily interest on the unpaid amount
4) Penalties for not filing the correct forms

One client came to us to do their payroll. They had been paying all of their employees as 1099 contractors for several years. They got audited by the IRS, which opened up their state audit. They ended up having to pay over $15,000.00 in taxes, fines, and penalties.

Be sure you know when the person working for you can be paid as a 1099 contractor and when a person should be paid as an employee. You can call me at 765-288-7243, or contact me through our website www.TPSpayroll.com for more information on this subject.

~James~