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reciprocity

How Does State Tax Reciprocity Work?

Everyone’s heard the saying, “you scratch my back, I’ll scratch yours.” In payroll, when these agreements happen between states, we call them reciprocal agreements. In other words, “you take my tax, I’ll take yours.”

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Calling the IRS? Read This First.

The holiday season is known for a lot of pleasant things—eggnog, scented candles, and family time all come to mind. But if you’ve been in the payroll profession long enough, there’s a good chance you associate it with something else: federal and state tax notices. And when those come in, it’s time to pick up the phone. Gulp.

1099_Blog

Form 1099 vs. Form W-2: How to Classify Employees Correctly

Contractor or employee? With 57 million workers, or 36 percent of the U.S. workforce, participating in the gig economy, the line between contractors and employees has never been blurrier. The tax filing implications are even more complicated.

401klimits

IRS Releases 2019 Retirement Contribution Limits

New year, new limits. Earlier this month, the IRS published its long-awaited updates to 401(k) and IRA contribution limits for 2019.

Because retirement plans can be funded on a pretax basis (meaning deductions are taken from employee paychecks before taxes like social security), the IRS limits how much employees can contribute to them annually. These limits are subject to a periodic review to account for changes in the cost of living, inflation, and other factors.

death

Death and Taxes: Processing a Deceased Employee’s Final Check

We’ve all heard the old saying about death and taxes. But going further, what are the tax implications of death?

There’s no denying the emotional toll when we lose a loved one or colleague. But even in death, payroll still needs to be processed. We'll break down the common scenarios that might occur when an employee passes. 

IRS

IRS Updates Launch Date for New Form W-4

Surprises aren’t typically welcome in payroll. Consider this a rare exception. After a year of tax compliance curveballs, the IRS has decided to delay its proposed changes to the Form W-4 until 2020.

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burger

NY Considers Eliminating Tip Credit

A new proposal served up by New York Governor Andrew Cuomo has restaurant owners asking for the check.
 

Tips
Cars

NJ Enacts New Tax for High Earners

The New Jersey Division of Taxation recently signed off on a new tax rate of 10.75% on individuals with an income over $5 million. The new rate is applied to $5,000,000 in income regardless of filing status (ex: single, married, etc). The new rate is certain to generate more tax revenue for the state. It also gives New Jersey the distinction of having the third highest top-income tax rate in the United States—slightly behind Hawaii’s 11% (for income over $200,000) and California’s 13.3% (imposed on income over $1 million).
 

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Lawmakers Working on ‘Tax Reform 2.0’

Call it a case of legislative déjà vu. A potential follow-up to 2017’s historic Tax Cuts and Jobs Act (TCJA) could throw HR and payroll professionals for a loop later this year.