I'm updating an article that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA) and Paid Family & Medical Leave (PFML) premiums, we report wages and pay the related unemployment tax and PFML premium on a quarterly basis (via 2 separate reports):
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on the reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
Now is a great time to check in with your employee to see if she wants to make any adjustments to her W4, especially if she hasn't made an update since before 2020. The Form itself, and the related Tax Information section of the Employee Profile, changed a few years ago in connection with the elimination of withholding allowances.
If your employee wants to update her W4, you can download a 2023 W4 from the "helpful links" on my site, give it to your employee to fill out and sign, then upload it to the employee profile. You also need to edit the Tax Information section of the employee profile. Any changes to income tax withholdings would be made prospectively.
Also, please make sure your employee has marked "multiple jobs" on the W4 if she has more than 1 job or is in a nanny share. This will help ensure that income taxes are withheld at the appropriate rate and will reduce the likelihood that she will owe income taxes at year-end.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents and other info you need to report your 2022 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26; and Schedule 2, line 9.
The amount of estimated federal tax deposits is reported on Form 1040, line 26.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2023 is $.655/mile, up from the midyear increase to $.625/mile in 2022. Please keep this in mind when reimbursing your employee for miles driven during the workday. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
Effective January 1, 2023, the Paid Family & Medical Leave (PFML) tax will increase to .582% of your employee's gross wages, up from .439%. You will still have the option of paying your employee's tax for him/her instead of withholding it. Remember: this tax is not optional - you must withhold the tax from your employee's wages or pay it yourself. You can indicate your preference in the Employee Profile under Tax Payment Information.
You may be curious about your flexible spending account (FSA) for dependent care expenses and what is an appropriate description to include on the paystub. In most cases, the FSA administrator will need a copy of paystub, which will have the care provider's name and address, the employer's name (you), the dates of service, and the amount of wages paid (i.e. the amount being requested for reimbursement). The administrator may also need the care provider's SSN, the name of the dependent, and a description of the service provided. Usually a description like "dependent care for (name of child) while both parents attend work" is sufficient. You can print the paystub and ask your care provider to sign it and note his/her SSN on it.
3Be Coaching invites you to join us in a complimentary experience of support, connection and learning for working moms.
You’re in a unique time of your life. Navigating work and motherhood in a style that is deeply satisfying to you probably calls for the cultivation of a new mindset, along with commitment to self-care, boundaries and clear communication. With YGT! (You’ve Got This) Together you’ll have the opportunity to rewrite old stories, gather tools/tips and connect with other working moms in a safe, judgment free environment. We’ll learn and laugh (and possibly cry) together as we explore choices that will make your journey smoother.
We’d love for you to join us for a 30-minute virtual gathering for a taste of YGT! Together. An experiential, informational meet up. No preparation needed. Bring an open mind, a willing spirit and pen/paper to capture the sparks of inspiration. Bring a friend!
Who: Working moms
When: three options to choose from:
· Sept 13th at 1 p.m. PT/ 4 ET
· Sept 17th at 9 a.m. PT/ 12 ET
· Sept 29th at 5 p.m. PT/ 8 ET
Where: Register for FREE through Eventbrite where you’ll receive a link to our gathering.
Setting aside this time is an investment in yourself and your family.
You, showing up exactly as you are, will be a gift to this community.
We hope you’ll say yes to this empowering experience and look forward to being of service to you on your journey!
Talk with you soon,
The Coaches at 3Be Coaching
In June, the IRS announced that it would increase the mileage reimbursement rate for the final 6 months of 2022 to $.625/mile, up from $.585/mile. The increase was made in recognition of higher gas prices nationwide. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
I'm updating an article that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA) and Paid Family & Medical Leave (PFML) premiums, we report wages and pay the related unemployment tax and PFML premium on a quarterly basis (via 2 separate reports):
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on the reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
Now is a great time to check in with your employee to see if she wants to make any adjustments to her W4, especially if she hasn't made an update since before 2020. The Form itself, and the related Tax Information section of the Employee Profile, changed a few years ago in connection with the elimination of withholding allowances.
If your employee wants to update her W4, you can download a 2022 W4 from the "helpful links" on my site, give it to your employee to fill out and sign, then upload it to the employee profile. You also need to edit the Tax Information section of the employee profile. Any changes to income tax withholdings would be made prospectively.
Also, please make sure your employee has marked "multiple jobs" on the W4 if she has more than 1 job or is in a nanny share. This will help ensure that income taxes are withheld at the appropriate rate and will reduce the likelihood that she will owe income taxes at year-end.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents and other info you need to report your 2021 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26; Schedule 2, line 9; and Form 1040 line 23.
The amount of estimated federal tax deposits is reported on Form 1040, line 26.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2022 is $.585/mile, up from $.56/mile in 2021. Please keep this in mind when reimbursing your employee for miles driven during the workday. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
In Seattle, the minimum wage for 2022 is $17.27/hour for small business employers, including household employers.
The statewide minimum wage in Washington will be $14.49/hour.
Now is a great time to check in with your employee to see if s/he wants to make any adjustments to his/her W4, especially if s/he hasn't made an update since before 2020. The Form itself, and the related Tax Information section of the Employee Profile, changed last year in connection with the elimination of withholding allowances.
If your employee wants to update his/her W4, you can download a 2021 W4 from the "helpful links" on my site, give it to your employee to fill out and sign, then upload it to the employee profile. You also need to edit the Tax Information section of the employee profile. Any changes to income tax withholdings would be made prospectively.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents and other info you need to report your 2020 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26; Schedule 2, line 7a; and Form 1040 line 23.
The amount of estimated federal tax deposits is reported on Form 1040, line 26.
Please contact me directly with any questions.
I'm updating an article that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA) and Paid Family & Medical Leave (PFML) premiums, we report wages and pay the related unemployment tax and PFML premium on a quarterly basis (via 2 separate reports):
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on the reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
The standard mileage reimbursement rate for 2021 is $.56/mile, down from $.575/mile in 2020. Please keep this in mind when reimbursing your employee for miles driven during the workday. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
In Seattle, the minimum wage for 2021 is $16.69/hour for small business employers, including household employers.
The statewide minimum wage in Washington will be $13.69/hour.
For families in a nanny share arrangement, please encourage your nanny to check the box in Step 2 of Form W4, to indicate that they have "multiple jobs". Doing so will help ensure that enough income taxes are calculated and deducted from their wages. If they do not check the box, then their income tax withholdings may be too low when they combine their earnings from both families.
You, the employer, will need to mark this field correctly in the Tax Information section of the employee profile.
You may be curious about your flexible spending account (FSA) for dependent care expenses and what is an appropriate description to include on the paystub. In most cases, the FSA administrator will need a copy of paystub, which will have the care provider's name and address, the dates of service, and the amount of wages paid (i.e. the amount being requested for reimbursement). The administrator may also need the care provider's SSN, the name of the dependent, and a description of the service provided. Usually a description like "dependent care for (name of child) while both parents attend work" is sufficient. You can print the paystub and ask your care provider to sign it and note his/her SSN on it.
The IRS recently announced that 2019 income tax returns and payments are now due July 15, 2020 (not April 15). This also applies to estimated federal tax deposits that are due on April 15. Please click on the link below to read more.
https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents and other info you need to report your 2019 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26; Schedule 2, line 7a; and Form 1040 line 15.
The amount of estimated federal tax deposits is reported on Schedule 3, line 8 and Form 1040, line 18d.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2020 is $.575/mile, down from $.58/mile in 2019. Please keep this in mind when reimbursing your employee for miles driven during the workday. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
In Seattle, the minimum wage for 2020 is $15.75/hour for small business employers, including household employers.
The statewide minimum wage in Washingon will be $13.50/hour.
I'm updating an article that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA) and Paid Family & Medical Leave (PFML) premiums, we report wages and pay the related unemployment tax and PFML premium on a quarterly basis (via 2 separate reports):
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on the reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
Now is a great time to check in with your employee to see if s/he wants to make any adjustments to the withholding allowances on his/her W4. If so, you can download a 2019 W4 from the "helpful links" on my site, give it to your employee to fill out and sign, then upload it to the employee profile. You also need to edit the "tax information" section of the employee profile. Any changes to income tax withholdings would be made prospectively.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents and other info you need to report your 2018 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26; Schedule 4, line 60a; and Form 1040 line 14. The amount of estimated federal tax deposits is reported on Schedule 5, line 66 and Form 1040, line 17.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2019 is $.58/mile, up from $.545/mile in 2018. Please keep this in mind when reimbursing your employee for miles driven during the workday. Note that you can easily include this reimbursement on the paystub by using the mileage calculator found there.
I'm reposting an article from last year that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA), we report wages and pay the related unemployment tax on a quarterly basis:
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents you need to report your 2017 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26 and included on Form 1040, line 60a. The amount of estimated federal tax deposits made is reported on Form 1040, line 65.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2018 is $.545/mile, up from $.53/mile in 2017. Please keep this in mind when reimbursing your employee for miles driven during the workday.
In Seattle, the minimum wage for 2018 is $14/hour for small business employers, including household employers. The rate goes to $15/hour in 2019.
The minimum wage in Tacoma is $12/hour.
The current statewide minimum wage in Washingon is $11.50/hour.
I'm reposting an article from last year that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA), we report wages and pay the related unemployment tax on a quarterly basis:
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
Whether you prepare your tax return or you have a professional do it, you'll want to know which documents you need to report your 2016 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26 and included on Form 1040, line 60a. The amount of estimated federal tax deposits made is reported on Form 1040, line 65.
Please contact me directly with any questions.
The standard mileage reimbursement rate for 2017 is $.53/mile, down from $.54/mile in 2016. Please keep this in mind when reimbursing your employee for miles driven during the workday.
You may be curious about your flexible spending account (FSA) for dependent care expenses and what is an appropriate description to include on the paystub. In most cases, the FSA administrator will need a copy of paystub, which will have the care provider's name and address, the dates of service, and the amount of wages paid (i.e. the amount being requested for reimbursement). The administrator may also need the care provider's SSN, the name of the dependent, and a description of the service provided. Usually a description like "dependent care for (name of child) while both parents attend work" is sufficient. You can print the paystub and ask your care provider to sign it and note his/her SSN on it.
I highly recommend enrolling on EFTPS.gov to make your estimated federal tax deposits. See preceding post titled "Schedule of federal and state tax payments". When you enroll, be sure to do so as an individual, not as a business. Because you will file Schedule H (on which you report your household employment taxes) as part of your individual income tax return, you make estimated federal tax deposits as an individual, not as a business.
Activation of your EFTPS account can take up to 2 weeks from the date you first enroll, so I encourage you to do it today! Don't wait!
Your 2015 tax return is done (I hope!) as well as that of your employee. Now is a great time to check in with your employee to see if s/he wants to make any adjustments to the withholding allowances on his/her W4. If so, you can download a 2016 W4 from the "helpful links" on my site, give to your employee to fill out and sign, then upload it to the employee profile. Any changes to income tax withholdings would be made prospectively.
Happy Mother's Day to all the mothers, grandmothers, and aunts who make our children's lives so safe, special, and memorable. Enjoy your day!
The standard mileage reimbursement rate for 2016 is $.54/mile, down from $.575/mile in 2015. Please keep this in mind when reimbursing your employee for miles driven during the workday.
I'm reposting an article from last year that discusses year-end tax reporting for household employers. Please contact me directly with specific questions.
Whether you prepare your tax return or you have a professional do it, you'll want to know what documents you need to report your 2015 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26 and included on Form 1040, line 60a. The amount of estimated federal tax deposits made is reported on Form 1040, line 65.
Happy new year!
I highly recommend enrolling on EFTPS.gov to make your estimated federal tax deposits. Scroll down this blog to read my earlier post titled "Schedule of federal and state tax payments". When you enroll, be sure to do so as an individual, not as a business. Because you will file Schedule H (on which you report your household employment taxes) as part of your individual income tax return, you make estimated federal tax deposits as an individual, not as a business.
Activation of your EFTPS account can take up to 2 weeks from the date you first enroll, so I encourage you to do it today! Don't wait!
Your 2014 tax return is done (I hope!) as well as that of your employee. Now is a great time to check in with your employee to see if s/he wants to make any adjustments to the withholding allowances on his/her W4. If so, you can download a 2015 W4 from the "helpful links" on my site, give to your employee to fill out and sign, then upload it to the employee profile. Any changes to income tax withholdings would be made prospectively.
I'm reposting an article from last year that I direct many of my clients to, in order to explain the difference in timing between estimated federal tax deposits and state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA), we report wages and pay the related unemployment tax on a quarterly basis:
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, these deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
The current statewide minimum wage in Washingon is $9.47/hour, and the overtime wage is $14.21/hour. In Seattle, the minimum wage increases to $10/hour for small business employers (which includes household employers) and $15/hour for overtime as of April 1, 2015.
Whether you prepare your tax return or you have a professional do it, you'll want to know what documents you need to report your 2014 household employment tax liability correctly. Here is a quick summary:
Your household employment tax liability is reported on Schedule H, line 26 and included on Form 1040, line 60a. The amount of estimated federal tax deposits made is reported on Form 1040, line 65.
You may be curious about your flexible spending account (FSA) for dependent care expenses and what is an appropriate description to include on the paystub. In most cases, the FSA administrator will need a copy of paystub, which will have the care provider's name and address, the dates of service, and the amount of wages paid (i.e. the amount being requested for reimbursement). The administrator may also need the care provider's SSN, the name of the dependent, and a description of the service provided. Usually a description like "dependent care for (name of child) while both parents attend work" is sufficient. You can print the paystub and ask your care provider to sign it and note his/her SSN on it.
I highly recommend enrolling on EFTPS.gov to make your estimated federal tax deposits. See my earlier blog post titled "Schedule of federal and state tax payments". When you enroll, be sure to do so as an individual, not as a business. Because you will file Schedule H (on which you report your household employment taxes) as part of your individual income tax return, you make estimated federal tax deposits as an individual, not as a business.
I've had a number of questions this month about the timing of estimated federal tax deposits and why that timing is different from state tax payments. I hope this post clarifies things a bit.
For state unemployment taxes (SUTA), we report wages and pay the related unemployment tax on a quarterly basis:
For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:
The federal tax deposits are made on a slightly off-quarterly basis, so they don't track exactly with the state tax payments. Moreover, the deposits reflect 2, 3 and 4 month wage periods, so the deposits can be larger or smaller depending on reporting period. I realize it is confusing. I'll continue to notify you of approaching tax due dates through alerts on your dashboard.
On June 2, the Seattle City Council approved the mayor's plan to increase the minimum wage to $15/hour, with a 3-year phase in period for large employers (>500 employees) and a 7-year phase in period for small employers (<500 employees). Read more on KUOW http://kuow.org/post/seattle-city-council-approves-15-minimum-wage
The Seattle mayor recently proposed a minimum wage increase to be phased in over the next 5-7 years. The phase-in period affects large and small employers differently, but ultimately all employers will have to pay their hourly employees $15/hour through a combination of wages and other compensation (e.g., healthcare). The minimum wage component then increases annually to be $18.13 by 2025.
Here is an excerpt from the Mayor's blog, which also includes an helpful illustration of the proposed minimum wage phase in:
Small businesses (businesses with fewer than 500 employees) will reach a $15 per hour minimum wage in seven years. Also established is a temporary compensation responsibility of $15 per hour to be met within the first five years, which can be achieved by combining employer-paid health care contributions, consumer-paid tips, and employer-paid wages.
The full City Council will review the proposed plan this month.
A few clients have asked about document retention: how long to keep tax returns, employee records, payment confirmations, etc. Whether you keep your tax records in hardcopy or electronic files, it's helpful to have some guidelines.
Specifically for employment tax documents (Schedule H, W2s, W3s, state tax filings, EFTPS payment confirmations), keep the records for 4 years after the return on which the related wages were reported was filed. Eg. keep employment records for your 2013 tax return until you've filed your 2017 tax return.
You want to keep a copy of the IRS letter notifying you of your Employer Identification Number, and the original letter from Business Licensing notifying you of your Unified Business Identifier. Keep a copy of the current year's tax rate notice from Employment Security, but after that you can discard the notice since the rate itself is included on your quarterly state wage reports for that year.
Click on this link to read more about document retention on the IRS website.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records.
Your 2013 tax return is done (I hope!) as well as that of your employee. Now is a great time to check in with your employee to see if s/he wants to make any adjustments to the withholding allowances on his/her W4. If so, you can download a 2014 W4 from the "helpful links" on my site, give to your employee to fill out and sign, then upload it to the employee profile. Any changes to income tax withholdings would be made prospectively.
The first estimated Federal tax payment for 2014 is due April 15. I will notify you of the amount you owe prior to then. If you have not already registered for an electronic payment account with the IRS, now is a great time to do so at www.eftps.gov. Setting up an account is very simple (be sure to register as an individual), but activation takes approx. 10 days - 2 weeks, so I suggest doing it as soon as possible. Once you've opened an account, you can make all future estimated Federal tax payments this way.
Welcome to my new website! I plan to use this blog to post information that is relevant to household employers, including topics like overtime pay, flexible spending accounts, nontaxable forms of compensation, changes in tax rates, and many others. I encourage you to check back periodically to see what I've posted.
I hope you find the new site easy to use, timely and informative. Please let me know what you think.