Studies show that the vast majority of employers use payroll software, which saves time by automating manual processes and decreasing administrative labor. The software calculates gross-to-net wages and enables direct deposit payments. However, there’s more to payroll than paying wages. To meet your other payroll needs, the software must have five important attributes: integration, self-service, tax … Read more
Regardless of whether your first payroll involves a few employees or many, the goal is to execute payroll in an accurate and compliant manner. Here are some steps to help you manage your first payroll. Get an EIN and perform the necessary state registrations. Obtain an Employer Identification Number from the Internal Revenue Service. If required, … Read more
The Federal Insurance Contributions Act (FICA) mandates that employers have to withhold, and also match, certain taxes. FICA consists of Social Security (formally known as the Old-Age, Survivors and Disability Insurance, or OASDI) and the Medicare taxes. The current tax rate for the Social Security tax is 6.2% for the employer and 6.2% for the … Read more
A tax credit for small-employer pension plan startup costs may be awaiting you. You may be able to claim a tax credit of up to $5,000 when you set up an SEP or a SIMPLE IRA or a qualified plan such as a 401(k). You qualify to claim this credit if you meet all these … Read more
Everybody wants to pay as little in taxes as possible. Most people use software or hire an accountant to help them find all the deductions they can subtract from their taxable income and all the credits they can subtract from their final bill. But most tax breaks require you, the taxpayer, to plan ahead. Even … Read more
A money purchase pension plan is an employee retirement benefit plan that requires companies to contribute a specific percentage of an employee’s salary each year, regardless of the firm’s profitability. Because of this, money purchase plans can be attractive options for employers to attract and retain key employees, though they can be pricey for firms … Read more
Even before the pandemic, the Small Business Administration offered Economic Injury Disaster Loans for “losses not covered by insurance or funding from the Federal Emergency Management Agency (FEMA) for both personal and business” expenses and for “business operating expenses that could have been met had the disaster not occurred.” The SBA has also been offering … Read more
Small and midsize employers, and certain governmental employers, can claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. These credits are available to eligible employers that pay sick and … Read more
IRS Notice 2020-65 allowed employers to defer withholding and payment of the employee’s Social Security taxes. This deferral applied to those with less than $4,000 in wages every two weeks, or an equivalent amount for other pay periods. It was optional for most employers, although mandatory for federal employees and military service members. It’s time … Read more
The second relief bill, passed at the end of 2020, contains updates to the employee retention credit, a refundable payroll tax credit. Each option has its own rules and regulations for first- and second-round funding. The act changes some requirements for the ERC — retroactively and prospectively — giving businesses more options to claim it. … Read more
