Schedule of federal and state tax payments

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:

  • Q1 (January - March) wages are reported/taxes are paid by April 30
  • Q2 (April - June) wages are reported/taxes are paid by July 31
  • Q3 (July - September) wages are reported/taxes are paid by October 31
  • Q4 (October - December) wages are reported/taxes are paid by January 31

For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:

  • the April 15 deposit covers wages paid January - March (3 months)
  • the June 15 deposit covers wages paid April - May (2 months)
  • the September 15 deposit covers wages paid June - August (3 months)
  • the January 15 deposit covers wages paid September - December (4 months)

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.

I'd love to hear your feedback at info@jenniferhorner.com

Schedule H and your 2016 income tax return

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 EIN, found in your profile
  • Form W3, which summarizes total employee gross wages and taxes withheld, and which I have uploaded to your profile
  • Schedule H, which I have uploaded to your profile (you can use the Schedule that I prepared to confirm that the one you include in your tax return is correct)
  • the amount of state unemployment taxes paid for 2016, including the amount paid in January 2017 for Q4 2016, which you can find under the State Tax Payments Report (filter the report to view 2016)
  • the amount of estimated federal tax deposits made during the year, including the deposit made on/around January 17, 2017.   You may have made these deposits using EFTPS.gov, IRS Direct Pay, or payment voucher + check.

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.

I'd love to hear your feedback at info@jenniferhorner.com

IRS mileage reimbursement rate

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.

I'd love to hear your feedback at info@jenniferhorner.com

Childcare FSA (Flex Spending Account)

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'd love to hear your feedback at info@jenniferhorner.com

Enroll on EFTPS.gov to make estimated federal tax deposits

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! 

I'd love to hear your feedback at info@jenniferhorner.com

W-4 check up

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.

I'd love to hear your feedback at info@jenniferhorner.com

Happy Mother's Day

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!

I'd love to hear your feedback at info@jenniferhorner.com

IRS Mileage Reimbursement Rate

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'd love to hear your feedback at info@jenniferhorner.com

Schedule H and your 2015 income tax return

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 EIN
  • Form W3 (the final page of Form W2, which summarizes total employee gross wages and taxes withheld)
  • the amount of state unemployment taxes paid for 2015, including the amount paid in January 2016 for Q4 2015
  • the amount of estimated federal tax deposits made during the year, including the deposit made on/around January 15, 2016.   You may have made these deposits using EFTPS.gov, IRS Direct Pay, or payment voucher + check.

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. 

I'd love to hear your feedback at info@jenniferhorner.com

Happy new year!

Happy new year!

I'd love to hear your feedback at info@jenniferhorner.com

Enroll on EFTPS to make estimated federal tax deposits

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! 

I'd love to hear your feedback at info@jenniferhorner.com

W-4 check up

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'd love to hear your feedback at info@jenniferhorner.com

Schedule of federal and state tax payments

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:

  • Q1 (January - March) wages are reported/taxes are paid by April 30
  • Q2 (April - June) wages are reported/taxes are paid by July 31
  • Q3 (July - September) wages are reported/taxes are paid by October 31
  • Q4 (October - December) wages are reported/taxes are paid by January 31

For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:

  • the April 15 deposit covers wages paid January - March (3 months)
  • the June 15 deposit covers wages paid April - May (2 months)
  • the September 15 deposit covers wages paid June - August (3 months)
  • the January 15 deposit covers wages paid September - December (4 months)

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.

I'd love to hear your feedback at info@jenniferhorner.com

Minimum wage in 2015

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.

I'd love to hear your feedback at info@jenniferhorner.com

Schedule H and your 2014 income tax return

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 EIN
  • Form W3 (the final page of Form W2, which summarizes total employee gross wages and taxes withheld)
  • the amount of state unemployment taxes paid for 2014, including the amount paid in January 2015 for Q4 2014
  • the amount of estimated federal tax deposits made during the year, including the deposit made on/around January 15, 2015.   You may have made these deposits using EFTPS.gov, IRS Direct Pay, or payment voucher + check.

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. 

 

I'd love to hear your feedback at info@jenniferhorner.com

Flexible Spending Account

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'd love to hear your feedback at info@jenniferhorner.com

EFTPS

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'd love to hear your feedback at info@jenniferhorner.com

Schedule of federal and state tax payments

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:

  • Q1 (January - March) wages are reported/taxes are paid by April 30
  • Q2 (April - June) wages are reported/taxes are paid by July 31
  • Q3 (July - September) wages are reported/taxes are paid by October 31
  • Q4 (October - December) wages are reported/taxes are paid by January 31

For the federal taxes (Social Security, Medicare, income taxes, and FUTA), we make estimated deposits 4x/year:

  • the April 15 deposit covers wages paid January - March (3 months)
  • the June 15 deposit covers wages paid April - May (2 months)
  • the September 15 deposit covers wages paid June - August (3 months)
  • the January 15 deposit covers wages paid September - December (4 months)

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.

I'd love to hear your feedback at info@jenniferhorner.com

Seattle's new minimum wage

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

I'd love to hear your feedback at info@jenniferhorner.com

Seattle's proposed minimum wage increase

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.

I'd love to hear your feedback at info@jenniferhorner.com

Document retention

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.

I'd love to hear your feedback at info@jenniferhorner.com

W-4 checkup

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.

I'd love to hear your feedback at info@jenniferhorner.com

First estimated Federal tax payment for 2014 is due April 15

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.

I'd love to hear your feedback at info@jenniferhorner.com

Welcome to my new payroll system

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.

I'd love to hear your feedback at info@jenniferhorner.com