Here comes 2012! We hope you enjoyed your holidays. In this email, read about tax changes that will be in place starting next year.
Payroll Tax Updates
Here’s the latest on what’s changing for 2012. Intuit has updated their service to incorporate all the changes below, so you don’t have to worry.
- Social Security wage base increase –The Social Security wage base will increase to $110,100 starting 2012.
- Extension of reduced employee Social Security tax rate – President Obama signed the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765). The Act includes a two-month extension of the reduced employee Social Security tax rate of 4.2% through February 29, 2012.
- FUTA Surtax changes – The FUTA tax rate was 6.2% from January 1, 2011 through June 30, 2011, and decreased to 6.0% July 1, 2011 through December 31, 2011. FUTA tax is calculated using the rate in effect when the wages were paid. Form 940 for small business filers and Form 1040 SH for household employers will report split wages and tax calculations in 2011. When filing FUTA tax returns, some employers may be prompted to enter more information about their paycheck history to correctly calculate the FUTA tax.
- Credit reduction states – A state that has not repaid money it has borrowed from the federal government to pay unemployment benefits is a “credit reduction state”. If you pay wages in a credit reduction state, you will pay more FUTA tax. The following states are credit reduction states: AR, CA, CT, FL, GA, IL, IN, KY, MI, MN, MO, NC, NJ, NV, NY, OH, PA, RI, VA, and WI.
You can filter just about any report for HQ or one of the remote stores by selecting Modify and then Filter.
- Go to Lists > Chart of Accounts and create two revenue accounts – one for donations and one for grants.
- Go to Lists > Item List and create two service items – one for donations and one for grants using the appropriate revenue account.
- When you receive a donation or grant, go to Customers > Enter Sales Receipts using the items you created above.
- When you make the bank deposit, go to Banking > Make Deposits and select the payments you’re depositing.
News Flash – How will New Year’s holiday (Monday, January 2, 2012) Affect My QuickBooks Payroll Processing
To allow for the New Year’s Day holiday, you might need to send payroll a day earlier than usual. Doing so will help you to comply with the Fair Labor Standards Act and ensure timely payroll tax payments.
If your normal paycheck date is on 1/2/2012, you should:
- Change your paycheck date for your direct deposit employees to Friday, 12/30/11.
- Send your payroll by 5 PM Pacific Time on Wednesday, 12/28/11.
If your paycheck date is immediately before or after New Year’s Day, consult the table that follows to find out when to send your payroll and when your account will be debited.
*Accounts are typically debited before regular banking hours, so you should make sure you have funds in your account to cover the payroll on the day before the actual debit occurs.
Select Customize Report, change your date range to include only the last 6 months, and then change your Columns to Month.