Vision Payroll

November 22, 2010

2011 Michigan Income Tax Withholding Guide Released

Filed under: News — Tags: , , , — Vision @ 6:00 pm
Michigan State Treasurer Robert J. Kleine
Michigan State Treasurer Robert J. Kleine
The Michigan Department of Treasury has released Publication 446, 2011 Michigan Income Tax Withholding Guide.

Withholding Rate and Personal Exemption Amount Announced

For wages paid after December 31, 2010 and before October 1, 2011, the withholding rate is 4.35% and the personal exemption amount is $3,700. For wages paid after September 30, 2011, a withholding rate reduction takes effect. Employers may calculate the reduced withholding by multiplying the withholding amount in the Michigan Income Tax Withholding Tables by 0.977. Alternatively, revised tables will also be released.

Exemptions Claimed on Form MI-W4

Employers should calculate Michigan withholding using the number of exemptions claimed on Form MI-W4, Employee’s Michigan Withholding Exemption.

Vision Payroll Using Updated Withholding Tables

Michigan employers do not need to take any further action as Vision Payroll will automatically transition to the revised withholding amounts on the effective dates.

July 2, 2010

Question of the Week: Do I Need To Withhold State Tax on Wages Paid to Non-Residents?

This week’s question comes from Aaron, a business owner. We have several employees who work in Massachusetts, but live in neighboring states. Do I need to withhold state tax on wages paid to non-residents? Answer: Massachusetts requires employers to withhold state tax from wages paid to non-residents for services performed in Massachusetts. Most states have similar requirements that employers withhold tax on non-residents, but some states do not require withholding until a certain time or dollar limits are reached. Additionally, some states have setup reciprocal agreements with other states that allow the employees to be taxed in their home states. Massachusetts (and many other states) has special rules for unique occupations such as athletes, entertainers, and flight crewmembers. Contact Vision Payroll for further information on your unique situation.

June 25, 2010

Question of the Week: Can an LLC Member Receive a Paycheck from the LLC?

This week’s question comes from Nikki, an LLC member. I am a member in an LLC. My neighbor is a member and receives a paycheck, but I’ve been told that I can’t receive a paycheck. Can an LLC member receive a paycheck from the LLC? Answer: For federal tax purposes, an LLC can make an election to be taxed in one of the following three ways:

  • Sole proprietorship (if only one member in LLC)
  • Partnership (if two members or more in LLC)
  • Corporation (any number of members in LLC)

This election is generally made when the entity is formed and must be done by the time the entity files its first income tax return.

If your LLC has elected to be taxed as a sole proprietorship, the LLC cannot pay wages to the member and the member cannot have income tax, social security tax, or Medicare tax withheld, and cannot receive a Form W-2 from the LLC.

If your LLC has elected to be taxed as a partnership, the LLC cannot pay wages to the members and the members cannot have income tax, social security tax, or Medicare tax withheld, and cannot receive a Form W-2 from the LLC.

If your LLC has elected to be taxed as a corporation, the LLC can pay wages to the members and the members can have income tax, social security tax, and Medicare tax withheld, and can receive a Form W-2 from the LLC. This is true even if there is only a single member in the LLC.

As for LLCs that have elected to be taxed as a sole proprietorship or a partnership, members may receive a draw from the LLC and must pay quarterly federal estimated tax payments to cover the amount of federal income tax and self-employment tax liability they will have, unless covered by withholding on other income. Vision Payroll can work with you and your CPA to determine an appropriate draw and estimated tax payment schedule. You can then receive the draw as a check or direct deposit with each payroll and schedule appropriate deductions such as retirement plan contributions. Contact Vision Payroll today to get started.

March 16, 2010

Oregon Updates 2010 Withholding Requirements for Measure 66

Filed under: News — Tags: , , , — Vision @ 1:55 pm

The Oregon Department of Revenue has completed its analysis of the changes required by the passage of Measure 66. For employees with wages less than $125,000, the Oregon Withholding Tax Tables dated January 1, 2007 remain in effect. For employees with wages of $125,000 or more, payroll withholding calculators have been created to modify the withholding calculation. Alternatively, employers may request the employees modify their withholding by filing a revised Form W-4 after completing the Oregon personal allowances worksheet (W-4). New tables will be available for the 2011 tax year. Vision Payroll has modified its withholding calculations for Oregon employees and no further action is required. Contact Vision Payroll if you have further questions.

January 1, 2010

Question of the Week: How Do We Treat Employees Who Claim Exemption under the Military Spouses Residency Relief Act?

Filed under: News — Tags: , , , — Vision @ 5:10 pm

This week’s question comes from Tim, a Director of Payroll. One of our employees is the spouse of a military member. She is claiming exemption from state withholding for 2009. How do we treat employees who claim exemption under the Military Spouses Residency Relief Act (the Act)? Answer: President Barack Obama signed the Act (Public Law 111-97) into law in November. Under the Act, spouses of military personnel who are present in or absent from a domicile due to compliance with military orders will not have their tax residence impacted by such presence or absence. The Act generally affects tax years 2009 and beyond. Affected employees should file an amended withholding form with their employers to claim exemption from withholding. Employers must not withhold taxes on employees who claim exemption under the Act. For 2009 tax years, affected employees should receive a refund of any tax withheld by filing a non-resident tax return in that state. Contact Vision Payroll if you have any questions on the Military Spouses Residency Relief Act.

October 25, 2009

California Releases Revised Withholding Schedules

Filed under: News — Tags: , , , — Vision @ 7:51 pm

As a result of the recent law requiring changes to income tax withholding in California, new withholding tables have been released effective for November 1, 2009 to December 31, 2009. The new tables accelerate withholding and increase the rates for supplemental wages, stock options, and bonuses paid after October 31, 2009. Vision Payroll will automatically transition to the new withholding tables on November 1, 2009. Contact Vision Payroll if you have any further questions on the revised withholding tables in California.

September 7, 2009

Iowa Announces Withholding Tables to Remain Unchanged for 2010

Filed under: News — Tags: , , , — Vision @ 10:42 pm

According to information provided by the Iowa Department of Revenue, the withholding tables for Iowa income tax will not change for 2010. The current tables, used for 2009 withholding, became effective April 1, 2006. Contact Vision Payroll if you have any questions on Iowa withholding.

August 23, 2009

Wisconsin Releases Updated Withholding Tables

Filed under: News — Tags: , , — Vision @ 10:20 pm

The Wisconsin Department of Revenue has released a revised Publication W-166, Wisconsin Employer’s Withholding Tax Guide. Effective for taxable years beginning after December 31, 2008, the top individual rate increased fifteen percent from 6.75% to 7.75%. The withholding tables and alternate methods of withholding have been revised due to the new tax rate and bracket adjustment resulting from inflation. The revised withholding tables or alternate methods should be implemented no later than October 1, 2009. Vision Payroll has implemented the revised withholding tables and Wisconsin taxpayers should have already noticed the change in withholding.

August 22, 2009

California Increases Tax Withholding Rates

As part of the recently-enacted California Assembly Bill No. 17, signed by Governor Arnold Schwarzenegger on July 29, 2009, the withholding rates will increase effective for wages paid after October 31, 2009. The wage withholding tables will be adjusted so that the amount to be withheld will be ten percent more than the sum that is calculated under the current withholding tables. Withholding on supplemental wages will increase from 6% to 6.6% and withholding on stock options and bonus payments will also increase from 9.3% to 10.23%. Changes were also made to the percentage of total estimated taxes that must be paid each quarter beginning in 2010.

Vision Payroll strongly recommends that California taxpayers consult their tax advisor to ensure that the proper amount of withholding tax be calculated and to calculate any adjustment to the number of withholding allowances claimed.

May 2, 2009

Arizona Withholding Tax Changes Take Effect

Effective May 1, 2009, new withholding Chart 3 took effect, increasing the percentage of federal income tax to be withheld for Arizona withholding tax purposes. Employees subject to Arizona withholding should see the impact in their next paycheck. Chart 3 applies to wages paid after April 30, 2009 and before January 1, 2010. Withholding Chart 4, which has also been released by the Arizona Department of Revenue (AZDOR), will apply to wages paid after December 31, 2009 and before July 1, 2010. Wages paid after June 30, 2010 will have withholding tax calculated based on new tables yet to be released by the AZDOR and will no longer have tax withholding calculated based on a percentage of federal withholding.

CHART 3
Wages Paid after April 30, 2009
and before January 1, 2010

CHART 4
Wages Paid after December 31, 2009
and before July 1, 2010

Annual Compensation Less Than $15,000

Annual Compensation $15,000 or More

Annual Compensation Less Than $15,000

Annual Compensation $15,000 or More

Old Rate

New Rate

Old Rate

New Rate

Old
Rate

New Rate

Old
Rate

New Rate

10%

11.5%

N/A

N/A

11.5%

10.7%

N/A

N/A

19%

21.9%

19%

21.9%

21.9%

20.3%

21.9%

20.3%

23%

26.5%

23%

26.5%

26.5%

24.5%

26.5%

24.5%

25%

28.8%

25%

28.8%

28.8%

26.7%

28.8%

26.7%

31%

35.7%

31%

35.7%

35.7%

33.1%

35.7%

33.1%

37%

42.6%

37%

42.6%

42.6%

39.5%

42.6%

39.5%

A revised Arizona Form A-4, Employee’s Arizona Withholding Percentage Election, is now available to allow employees to adjust their withholding. Withholding chart 1 and withholding chart 2 for pension and annuity payments were also released and are identical to the changes for those earning less than $15,000. Contact Vision Payroll if you have any questions on the withholding changes.

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