Year End Tax Planning - Business/Payroll

December 2020

Dear Valued Clients:

             Here we are. The end of the year. I hope you had a great one. I have listed a few things that you may need to know for 2021. PLEASE TAKE A MOMENT TO READ THE FOLLOWING!

  • W-2/1099s:
    • If we prepare your W-2’s and/or 1099’s, we have attached a report of the payees that we currently have on file. The password to open this file is the last 4 digits of your social security number. Please review the report(s) and verify names, addresses and social security numbers. We realize there may be employees listed on the report(s) who no longer work for your company, or new employees who are not listed. Our tax program generates these reports from information from prior years, so please DO NOT stress… just review this list thoroughly and delete or add names if necessary. Return the list to us by December 20th with any changes and/or additions. We will not process your W-2’s/1099’s until we receive this report back from you. NEW PENALTIES, up to $520 for each form filed late. DUE DATE January 31, 2021.
  • IRS NOTICES:
    • The IRS will never contact you by phone or e-mail. Watch out for scams. If you get a notice in the mail, send it to us before you pay it.
  • PAYROLL TAXES:
    • Federal and State filing frequency notices are not always sent to us. If you get them, send a copy to us.
    • Social Security rate is the same (.0765) and the new wage limit is $142,800.
    • PA Unemployment withholding rate (.0006) is the same. Taxable wage base remained the same at $10,000. Employer Contribution Rate Notices will be in the mail any day now. Send us a copy.
    • Local Earned Income Tax must be withheld at the rate where you work or where the employee lives, whichever is higher.
  • NEW EMPLOYEES still need to complete W-4’s, I-9’s, and PA New Hire Reports (click on the links to download the forms right here). With regard to the I-9 forms, please be advised that Homeland Security has recently been performing audits on random employers to make sure this form is correctly filled out for each employee.
  • MINIMUM WAGE: is still $7.25 ($2.83 for tipped employees). Watch for possible changes this year.
  • ELECTRONIC TAX PAYMENTS: If you change banks, or your bank is sold, don’t forget to change your EFT login information, or provide us with your new bank information if we make monthly or quarterly tax payments for you.

As always, if you have any questions about this information, or anything else, do not hesitate to give me a call. Thank you for your continued trust.

Very truly yours,
Stacey Massimini

 
341 E. Lancaster Avenue, Downingtown, PA 19335
ajmasch@fast.net • 610-269-6833 • 610-269-7983 (Fax)
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