The 2010 Tax Relief Act is in full effect. The relief act reduced the employee -share of OASDI tax from 6.2 percent to 4.2 percent for wages paid in 2011. This one year, temporary, credit replaces the Making Work Pay credit which expired in 2010.

This is great news for your employees and you undoubtedly had a few happy receivers Jan 31^st(the IRS deadline for implementation). Typically workers will see a 2% increase in there take home pay in each check until there year-to-date salary reaches the $106,800 cap.

On the employer side, employer contribution still sits at the 6.2% point and Medicare tax rates remain the same.

2010 saw a slew of tax, benefits, health care and other changes which effect you the employer. It’s is a good idea to have competent professionals working for, or with, you to ensure you stay compliant and current in this fast moving environment. Services such as PEO can help eliminate some liability and save you time and money.

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So you made it through the holidays, started the year off with a bang, and you are looking forward to your best year ever! But have you slowed down, looked back, and made sure 2010 is wrapped up in a neat little box with a pretty bow on top?

As much as we, as visionary business men and women, love to look forward and make plans, sometimes we need to take a moment, look back and make sure our ducks are in a neat little row with bows on top.

Taking a few moments in these first few weeks, if you have not already, to update your payroll information can help make your tax season smooth and get your new year off to a great start.

Here is a list of a few simple items to wrap up your 2010 and prepare for the impending W-2’s. Speak with your employees and former employees to ensure

• Any changes in Employee Names have been made
• Addresses are correct, nothing fun about returned W-2’s!
• Social Security Number are up to date

As a business owner you’ll sometimes do nice things such as give a bonus, put everyone on a business cell, or something you forgot to log things like taking the company Lamborghini out for a spin. Make sure you report it all as well

• Have you reported Year-End Bonuses?
• Did you forget to report any Manual Checks? Specifically payroll checks
• Personal Use of Business Automobile?
• Third Party Sick Pay?
• And any other Fringe Benefits you’ve provided yourself or your employees.

Going through a quick list can get your year off to a great start and make the perfect, well organized, launching pad for your best year ever!

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Mandatory, Required, Automatic. Scary words to a business owner, what do all these new changes mean for my staff, my time and my bottom line?  When I heard about an Automatic IRA’s Bill passing through the Senate I was worried, does this mean I have to contribute to everyone’s retirement now? Ok, so what does the proposed law say, maybe my business is too small to worry:
•       Over 10 employees who earned over $5,000 in the prior year
•       In business for longer than two years
•       Does not already have a qualified retirement program.
Ok, so that means me, THAT MEANS ME! Automatic, mandatory, required.

Let’s keep going:
•       Enrollment is automatic, but voluntary
•       Employees can opt out
•       Deduction would happen in a similar manner to current payroll deductions
So, as currently proposed I’ll set up a 3% deduction to this Auto IRA much like I set up my payroll taxes, but if an employee doesn’t want to contribute they can opt out.  This isn’t sounding so scary anymore, but what is it going to cost me to set up, manage, and the really scary one, contribute?
•       Employer contributions are Voluntary(good we got he really scary one out of the way)
•       Tax credits  would be offered of up to $250 for each of the first two years of the program  to cover any expenses incurred in setting up the deductions
•       By setting up my own qualified savings program I would be entitled to a tax credit of up to $1,000, or 50% of my start-up costs, whichever is the lesser amount, available for up to three years after the program start date
As happens with all Bills this one is sure to change and evolve.  As it currently stands employers selects, or allows employees to chose,  which provider the deduction would be sent to, much as private plans operate now. Keep an eye on the HCSCanDo and Payroll Guys blog for up dates as this bill evolves along the way.

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2010 has seen changes in the business landscape for all of us, from the small start up to the large corporations, including H.R 2847, the Hiring Incentives to Restore Employment Act (HIRE Act) aimed at encouraging businesses to hire and retain unemployed workers. .

The nitty gritty of the HIRE Act focuses at putting America to work by providing businesses with a tax credit for qualified employees retained for at least one year, of up to $1,000 per worker. As well as a payroll tax exemption of the employers’ share (6.2%) of Social Security payroll taxes on the wages of a qualified workers paid between March 19, 2010 and December 31, 2010. In total these tax savings can add up to $7,621.60 ($1000 credit plus up to $6,621.60 in forgiven Social Security withholding for 2010) per employee. Better yet, you don’t have to wait till the next tax filing to see the benefits since the Social Security withholding’s never even leaves your pocket.

To make sure your new employee will save you money check the following:

* Were they hired after Feb. 3, 2010 but before Jan. 1, 2011?
* Were they hired for a newly created position, or a position that opened up from an employee willingly resigning or being terminated for a cause?
* Sorry guys, they can’t be related to you(the employer)
* Your new employee must sign an affidavit (form W-11) stating they have not been employed, or working 40 hours a week, in the prior 60 days to beginning work.

One great, and not as well known, gem in the HIRE Act -a qualified worker meeting the above criteria CAN be a formerly laid off employee of the company! And with no full time work requirements companies, small to medium sized business especially, can rehire at part time those great former employees, already knowledgeable in the field, as well as re-staff positions currently left vacant due to economic down turns, all while saving money!

And since we all love saving money through tax credits and forgiveness’ now is the time to take advantage of these incentives and work with us to maximize effectiveness. As we’ve seen with other tax credit, such as the New Homebuyer Incentives of 2009/2010, requirements and payouts are constantly changing and funds are available only for a limited time. Contact your tax professional for advice(it’s after tax season, and they will love to hear from you!), feel free to contact us for more information or refer to the IRS website for specific details

So how does this Act effect you, as a PEO client? Thanks to the efforts of the National Association of Professional Employer Organization(NAPEO) you can continue the smart decision to focus on what your company does best, and let us what we do best, while still reaping the potentially enormous benefits of the HIRE Act. But plain and simple, whether you hire directly or through a PEO service you can reap the full benefits of the HIRE Act.

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Matthew Creek with Clear Mind Consulting provides custom-built, onsite, productivity design & Coaching for individuals and groups.

Sonia Graham with Maximum Business Advantage enables your business to achieve substantial revenue growth through the development, implementation and continuous improvement of systems and processes.

Maretyn Arnold with Productivity Architects uses an integrative approact to information technology to help businesses work more productively and effectively.

Friday, June 19, 8:15AM to 10:00AM

Register here: http://ping.fm/mvYty

Human Capital Strategies www.hcscando.com
1 N. Macdonald  (lower level)
Mesa, AZ 85201 US

For more information, contact Christine Nichols @ 480-962-1580 ext. 208 or christine.nichols@hcscando.com

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One of our goals at Human Capital Strategies is to ensure compliance and reduce the liability of our clients.  Human Capital Strategies is pleased to invite you to our conference focusing on Employee Benefits and how it benefits you as the Employer.  The Speakers you will get to meet and hear from are: 

Brian Evans, Strategic Benefits Consultants (SBC)

Brian’s combination of experience & knowledge has brought a powerful insight to their group of clients. 

Tupper Jones, Prepaid Legal

Tupper Jones is a Group Security Specialist with Pre-Paid Legal Services, Inc., a company that provides valuable legal and identity theft services to companies and their employees. 

Perry Buckman, Wachovia Securities 

Perry, First Vice-President with Wachovia Securities, and his team offer extensive personal and professional experience in investment planning which proves to be beneficial to both employees and employers.

Dale Orr, Aflac

Dale brings 15 years of expierence and his extensive knowledge in the insurance industry.  Aflac benefits employers through their ability to customize solutions that enhances benefit programs.    

Please join us on:

WHEN:           Friday, May 15, 2009

TIME:             8:15 a.m. – 10:00 a.m.

WHERE:         Human Capital Strategies (www.hcscando.com)

                        1 N. Macdonald, Mesa AZ  85201

RSVP:             480-962-1580 ext. 208 or

email christine.nichols@hcscando.com

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