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

2011 Mileage Reimbursement Rates (July)

Here is another mid-year change from the IRS. This is at least beneficial. Beginning July 1, the standard rate to calculate deductible costs of operating an automobile for business use increases from $.51 to $.555 per mile. Please click here to view the IRS news article for more information

As part of our payroll service, we can help you track those mileage reimbursements and calculate the correct taxes. This way you can be sure that your W-2 calculations will be accurate at the end of the year.

Please call us at 765-288-PAID or visit us on the web at www.tpspayroll.com.

FUTA rate change

I apologize for the lateness of this post. Quarter end taxes and forms come first though. The IRS has finally reduced the FUTA rate. Not to complicate matters, but the rate changes mid year. From July 1, 2011, the Federal Unemployment rate (FUTA) will change from 6.2% to 6.0%. Most companies are eligible for a 5.4% credit, which reduces your effective FUTA rate from 0.8% to 0.6%. However, some states may have a credit reduction if their state unemployment system (SUTA) has not paid back their loan from FUTA. All of your FUTA liability gets reconciled when you file Form 940 at the end of the year.

WHAT THIS MEANS: All gross pay for the first six months will be calculated at the .8% rate. This is more for IRS audit purpose. All gross pay in the last six months that is still liable for FUTA, will be at the .6% rate. When the 940 form is filed at the end of the year, it will be figured at the .6% rate plus any state credit reduction that may apply. Any over payments will be refunded at that time by the IRS.

If you need help in understanding this law change and how it will effect your business now and at the end of the year, please call us at 765-288-7243, or via our website www.tpspayroll.com and click the contact tab.

New Businesses

Starting up a new business can be daunting.
-What are the different types of businesses I can file as?
-Which one is right for me?
-Can I change later on?
-What needs to be filed?
-What order must I apply for them?
-How do I file?
-What insurance coverage do I need for the place of business and employees?
-What are the additional requirements needed when hiring employees?

These are just some of the difficult questions a new business has to figure out. Many college business class and entrepreneurship programs don't cover anything beyond a writing a good business plan.

The Federal requirement is always the same, but each state can be different. Some states require you to apply only through a business attorney, others let you apply online and get results immediately, and some have a combination of processes you must go through. Some states have local tax or school jurisdiction.

Most of these answers can be found scouring through the internet, calling local agencies, etc. This can take up precious time. You may find all the answers, but what happens if you don't?

Let Total Payroll Solution help direct you in the right direction to make sure your new business has a chance for success by "having all of your ducks in a row" before you start. As a part of our customer service, we have helped several businesses get everything they needed at no extra cost. We want you to succeed!

Please give us a call at 765-288-7243 or visit our website at www.tpspayroll.com for more information.

2011 Mileage Reimbursement Rates

The IRS has changed the mileage reimbursement rate for 2011. The following is the notice from the IRS website.:

WASHINGTON — The Internal Revenue Service today issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 51 cents per mile for business miles driven
• 19 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. The IRS is requesting public comments on whether taxpayers should be allowed to use the business standard mileage rate in this circumstance.

Beginning in 2011, a taxpayer may use the business standard mileage rate for vehicles used for hire, such as taxicabs.

Also beginning in 2011, the standard mileage rates are announced in a separate notice, which also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost for automobiles under a FAVR allowance. The IRS plans to discontinue publishing the standard mileage rate revenue procedure annually but will publish modifications as required.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2010-51 and Notice 2010-88 contain additional details regarding the standard mileage rates.

Please note the two ways of calculating. You can use the fixed amount (51 cents) or collect your receipts for gas, maintenance, etc. I've had the time to do both in the past and usually came out ahead on the 51 cents.

If you have a newer car with great gas mileage, the 51 cents per mile is probably your best option. You are getting better than the average $/mile vehicle and your maintenance cost will be rather low due to warranty that will cover most problems with your vehicle.

The receipt method may be more practical if you your vehicle is older and not gas efficient. You'll spend more money on gas per mile and your maintenance cost has a potential of being higher due to repairs, parts replacement, milestone services.

At Total Payroll Solutions, we can figure your per mileage rate. I suggest to my clients who use this rate to still keep track of receipts and compare both methods at the end of the year and see which one is better and make adjustments.

Please contact me if you would like more information regarding this notice or acquiring our payroll services. You can use contact us or request a quote through our website www.tpspayroll.com.

James Petty
Total Payroll Solution

Employee W2 Tips

Making sure your employees get their W2s or 1099s can cause your hair to go gray and fall out. Here are some helpful tips to make sure everything goes smoothly.

1) Make sure employee information is current and up to date. These easiest way to do this is have an employee fill out a new W4 every time his or her information changes. This will greatly reduce errors, reprinting W2, lost W2s that where mailed, etc.

2) Have a list of employees who has a W2. When they pick up their W2, have them verify the information is correct (most importantly their SSN), and sign next to their name. This will also reduce further errors, reprints, etc as well as employees complaining they never received their W2.

3) If you have to mail W2s to employees, notate when you mailed them and which ones where mailed on your list from #2.

4) If any return, keep them in their original envelope with the date stamp and return information from the post office. YOU MUST KEEPS THESE FOR FOUR YEARS. If an employee picks up their W2, make a copy of the envelope and notate when the picked up the W2. If the employee request that you mail their W2, photocopy the original envelope and notate when and where you mailed the W2.

These tips will keep you from forgetting who has their W2, who hasn't, and what ever happened to that W2. These tips will also give you the burden of proof when an employee says you never gave them their W2.

At Total Payroll Solution, we are diligent about getting correct and updated information on your employees. We also know keeping up with W2s and other forms can become a hassle. That's why we send you a PDF of all your forms as well as retaining them in our files. THIS IS ALL AT NO EXTRA COST.

Call us at 765-288-PAID or visit us on the web at TPSPAYROLL.COM for more information and a price quote. No fee for W2 processing, PDF copy, and filing are just one of the many ways we can save your business in payroll expenses.

Payroll Made Easy

I hear commercials all the time for a payroll processor that "only taxes seconds" to run payroll. Here is what they are not telling you.

1) You are paying them for your work. Add up all the seconds of entering payroll, printing checks, entering data into your books, keeping up with paying taxes, filing forms, etc. Sounds like you are still doing payroll yourself.

2) YOU ARE RESPONSIBLE for accuracy and timely tax payments and filings. They may send you reminders if you set it up that way, but, ultimately, it is one your head.

3) If you have an issue with the IRS or other tax agencies, you have to spend the hours on the phone waiting for them to answer your call, making sure you have all the right information and authority to speak with them, knowing what is wrong, what needs to be fixed, doing the fix, sending in the fix, and keeping up with the problem to make sure it gets resolved properly.

4) You have to make your payroll fit their design. You know the old saying, "trying to stick a square peg in a round hole"? If you have special circumstances, special reports, customization to your needs, etc, you are out of luck unless you spend time manipulating the reports they give you.

5) Customer service, you wait in line, finally speaking to a first line of operators who take 10 minutes before passing you to a colleague to help you. Then it is can they help you, how long, how much will you have to do, and how much are they going to charge you?

6) Bombardment with additional services and products.

These are just some of the things we hear from customers looking for somewhere else to go or what we have found in our research. I am not trying to "bad mouth" this company, but I just want everybody to know what they are not telling you.

In the book "QuickBooks 2007 for Dummies" by Stephen L. Nelson, published by Wiley Publishing, Inc, page 18 and 19 talk about why companies should strongly consider outsourcing their payroll. Simplicity, Liability, and confidentiality of pay rates and raises.

With our payroll give us your hours and that is all.

-We take of the rest. We can even set up an import file to work with your books. How long does it take to send an email and import a file into QuickBooks? That is how long your payroll processing truly is.

-We guarantee payroll accuracy and timely tax payments and filings or we will pay the penalty and interest.

-We do not have you call and wait through several levels of customer service, remembering issue numbers assign to your case.

-Our logo is "PAYROLL TAILORED TO YOUR NEEDS". We will do everything possible to get the payroll how you want it and the reports to how you need them.

-We make the calls to the tax agencies for you and to everything we can to get the payroll tax issues resolved for you.

-We do payroll processing only. We will not try and sell you other services or products. If you need them and ask us, we have preferred providers that we will put in contact with you. You do not have to go with are preferred providers. They are separate from TPS and we do not receive anything in compensation for you doing business with them.

Let us process your payroll and so you can avoid the burdens of running payroll and not have to be completely liable yourself. Give us a call at 765-288-PAID or visit us online at www.tpspayroll.com. We do process payrolls nationwide.

New FIT tax brackets

With the employee's Social Security Tax rate decreasing, many have seen there net pay go down instead of up. What happened? The IRS released new tax brackets for 2011. Some may have been on the cuff of tax brackets in 2010 and found themselves bumped up to the next tax bracket this year.

The IRS publishes the new information every year in what is known as PUB 15. Pages 35 give you the allowance deductions. For every allowance, you multiple the amount according to your pay schedule. This is what is deducted from your taxable wages, giving you the taxable wages for Federal Withholding. On pages 36-37 are the tax charts, and page 38 and on are easy reference tables to quickly find the estimated taxes.

Example: employee is single with two allowance and gets paid $400.00 biweekly with no pretax deductions.
Gross taxable wages = 513.75
142.31 X 2 = 284.62
FIT taxable wages = 229.13

This puts the employee in the 10% tax bracket
229.13-81.00 = 148.13
148.13 x 10% = 14.81


Or...on page 42 of the Pub 15, the estimate tax would be $14.00.

However, this same employee last year would of had to more than 233.00 in FIT taxable wages for any FIT to be withheld. Last year the employee would have paid 31.85 in SS, but would pay 21.58 this year. When you add the $14.00 of FIT, you come out paying 3.73 extra in taxes.

Confused? Let us worry about the tax charts, calculations, etc. We do all the hard work and guarantee accuracy or we will pay the penalties. For more information and payroll processing quote, please call 765-288-PAID, or visit us on the web at www.tpspayroll.com.

IN SUTA

I was hoping unemployment wouldn't be extended another year. Once again, we were getting to the end of the benefit period, employers were getting ready to hirer, and now...these people cannot be found.

What is even more devastating to our economy, is the effect all of this extended unemployment has on companies. In December, a notice was sent out to employers and payroll processors. SUTA raised its base rate from 7000 to 9500, and most clients saw their SUI rate double.

Now IN DWD needed to borrow money from FUTA to pay unemployment two years ago. In the details of that arrangement was that it needed to be paid back by November of the second year of the loan. Indiana hasn't and now FUTA is reducing the credit given to Indiana businesses for paying into SUTA. Therefore, instead of paying .8%, they have to pay 1.1%. Every year after, the rate would keep going up .3% until the loan was paid off and SUTA becomes "stable" once again.

The notice sent out about this was very confusing to many. It sounded the rate of 1.1% would begin in Jan 2011. However, the .3% "credit reduction" applies to the 940 due in Jan 2011...for the year 2010.

This means an extra $21 per person that was paid 7000 or more last year for FUTA. If a company's rate was 2.7 last year and it doubled, that means that company is paying and extra $324 per person that makes 9500 or more this year. If IN DWD fails to pay the FUTA loan off by the end of this year, that company would be paying an extra $366 per person over last year.

$366 may not sound like a lot, but that would be one person's weekly pay at 9.15 an hour. Most small businesses cannot afford this with the struggling economy. With 10 employees, this means 3600.00, or a part time employee they cannot hirer or must fire.

Larger businesses (whose SUTA rate is probably even higher) of 1200 employees, means 36,600.00. That means they are not able to hirer a new person, or they half to let go of one or two employees.

I wish good luck to all businesses out there. We may not be able to save a small company of 10 $3660 dollars a year, but we might be able to help you reduce your payroll expense. We guarantee to save you at least 25% from your total yearly cost from your current payroll processing company. For more information and payroll processing quote, give us a call at 765-288-PAID or visit us online at www.tpspayoll.com.