Pomerantz, Kavinoky & Company
Certified Public Accountants, Inc.
"Making Your Life a Little Less Taxing"
| Payroll Guidelines | |||||
| 2008 | 2007 | 2006 | 2005 | 2004 | |
| Social Security | |||||
| Rate | 6.20% | 6.20% | 6.20% | 6.20% | 6.20% |
| Limit | $ 102,000.00 | $ 97,500.00 | $ 94,200.00 | $ 90,000.00 | $ 87,900.00 |
| Maximum | $ 6,324.00 | $ 6,045.00 | $ 5,840.40 | $ 5,580.00 | $ 5,449.80 |
| Medicare | |||||
| Rate | 1.45% | 1.45% | 1.45% | 1.45% | 1.45% |
| Limit | No Limit | ||||
| Maximum | No Maximum | ||||
| State Diability | |||||
| Rate | 0.80% | 0.80% | 0.80% | 0.80% | 0.80% |
| Limit | $ 86,698.00 | $ 83,389.00 | $ 79,418.00 | $ 79,418.00 | $ 68,829.00 |
| Maximum | $ 693.50 | $ 500.33 | $ 635.34 | $ 857.71 | $ 812.18 |
DEPOSIT REQUIREMENTS:
FEDERAL
Electronic Deposit Requirement
You must make electronic deposits of all depository taxes (such as employment tax, excise tax, and corporate income tax) using the Electronic Federal Tax Payment System (EFTPS) in 2008 if: 1) The total deposits of such taxes in 2007 were more than $200,000 or 2) You were required to use EFTPS in 2007. If you are required to use EFTPS and fail to do so, you may be subject to a 10% penalty. Participation in EFTPS is voluntary if your deposits do not exceed the $200,000 threshold. To get more information or to enroll in EFTPS, call 1-800-555-4477, or visit www.eftps.gov. Please call our office with any questions.
Each company is either a monthly or a semi-weekly depositor. IRS will notify each employer in November of each year whether it is a monthly or semi-weekly depositor. You should have already received a notice from the IRS classifying your company. Please forward a copy of this letter to us.
Lookback Period – Your deposit schedule for a calendar year is determined from the total taxes reported on your Forms 941 (line 11) in a four-quarter lookback period. The lookback period for the 2007 calendar year begins July 1, 2005 and ends June 30, 2006. If you reported $50,000 or less of taxes for the lookback period, you are a monthly schedule depositor; if you reported more than $50,000, you are a semiweekly schedule depositor.
Monthly Depositors - Employment taxes for wages paid during the month must be deposited on or before the 15th day of the following month, unless the $100,000 one-day rule applies (explained later).
Semi-weekly Depositors - The deposit due date depends on when wages are paid. Taxes related to wages paid on Wednesday, Thursday, and/or Friday must be deposited by the following Wednesday. Taxes related to wages paid on Saturday, Sunday, Monday, and/or Tuesday must be deposited by the following Friday.
If a quarterly return period ends on a day other than Tuesday or Friday, employment taxes accumulated on the days covered by the return period just ending are subject to one deposit obligation, and employment taxes accumulated on the days covered by the new return period are subject to a separate deposit obligation. Separate Federal Deposit (FTD) coupons are required for each deposit obligation. These rules are complex; however, if you follow a policy of making your tax deposit within three banking days of disbursing your payroll, you’ll be OK unless the $100,000 rule applies.
$100,000 One Day Rule - If the total accumulated taxes reaches $100,000 or more on any day during a deposit period, it must be deposited by the next banking day, whether an employer is a monthly or semi-weekly depositor. If a monthly depositor accumulates a $100,000 employment tax liability on any day, it becomes a semi-weekly depositor on the next day and remains so for at least the remainder of the calendar year and for the following calendar year.
$2,500 Rule – If an employer accumulates less than a $2,500 tax liability during a quarter, no deposits are required and this liability may be paid with the tax return for the quarter.
REMEMBER THAT YOUR LIABILITY AND DEPOSIT AMOUNT EQUALS THE SUM OF FEDERAL INCOME TAX WITHHELD PLUS DOUBLE THE FICA AND MEDICARE.
Deposits are either made by electronic filing or at your bank with a federal tax deposit coupon. For payroll tax deposits, the form to be indicated is form 941.
STATE
State deposits are required to be made on the same day federal deposits are due.
State deposits are made with a coupon and mailed directly to the Employment Development Department. Both the amount of tax and the period to which it applies must be indicated on the coupon.
MANDATORY EFT PARTICIPATION: If your average (per payment) tax deposit for SDI and PIT withholding is $20,000 or more for the prior State fiscal year (July 1 to June 30), you are required to pay all SDI and PIT deposits by EFT, regardless of the dollar amount of your current deposits. Employers who meet the requirements for the first time will be notified by October 31 of the year prior to EFT participation. Mandatory EFT participants are subject to a noncompliance penalty if an SDI and PIT deposit is paid by check with a DE 88 coupon. Employers may find it convenient to pay UI and ETT payments using EFT, although they are not required to do so. Please call our office with any questions.
ALWAYS WRITE YOUR FEDERAL AND STATE NUMBER ON YOUR CHECKS, AND BE SURE TO GET A DEPOSIT RECEIPT FROM THE BANK FOR YOUR FEDERAL DEPOSITS.
Copyright 2003-2008 -- |