Medlin Software, Dennis

4. Taxable, IIRC grandchildren employees do not get the family exception. Of course, I am of the thought using the exception is not a good idea when the wages are not trivial. Less zero years for SS calculations, should benefits be needed before (if) the year drops out of the calculations.

It takes real dedication to read the CC reports we get (Elavon via Costco). Same with our prior provider. Generally, if the overall cost for the year is 3% or less, I am good. Shopping for processors is no fun, since you have to weigh many factors, which are hard to pull from most processors. There are things I have learned which I would never post in a public forum... Anyway, this thread caused me to revisit our reports. I pay the per item rate for refunds, so a refund costs me the two per item rates, plus the discount on the charge (1.99% to 3.25%, depending on the card used). While the statement is not very clear, I can find the the original charge with discount and transaction fee, and the refund with only the transaction fee.

I use Splashtop.

The person who is already a partner may be comfortable with some sort of reworking. A potential new partner might not be comfortable without investigating current status. (Nothing is free...) So personally, I would setup a new entity, with the new partners, even if there has to be a slight variation on the "legal" name. My experience comes from resurrecting a long ignored social club (started in the early 1900's). I became involved in the 80's, and would not be part of the board until there was a revived corp (MC club, putting on events, substantial liability). Attorney said it was crazy to revive - even if complete books and documents were avaailable - and instead, started new, with a very slight change in the corp name.

For browser, I use FF for most, Chrome next, and the others when forced. No particular reason. For "security", I use only free, and for many years now, only what Microsoft provides. Any "security" which has a paid element has job 1 of getting paid. This means trying to prove to you it has value, which means they MUST give false positives so you do not forget it is "on" and protecting you from the boogie men and women. This is mainly an issue with their WAG settings, what they call heuristics. This WAGuessing is why you will almost always see instructions to disable your security software when installing software... I test our software using VirusTotal before upload, and will often get a false positive or two from some of the outlier "security" companies. Even the "majors" give false positives from time to time,. In the last six months, compressing a setup file for online use will nearly always trigger a false positive - so the result is wasted bandwidth due to the false positives, since I can no longer compress our setup files. (The reason is many will believe the false positives, which means I lose customers since many "believe" the false positives.) The only real safety is the nut at the keyboard not doing silly things, and making sure to have a good recovery plan. No software can predict in advance (what heuristics tries to sell us) what someone will dream up. McAfee made his fortune selling his "tonic", and has confessed that no paid "tonic" is needed nor can any "tonic" actually protect us. Norton was good when it was Peter's company.... Interestingly, I recently changed routers, and it comes with an optional "security system". The "security system" gives me a warning when reading a safe major newspaper site, as one of their ad services is being flagged as nefarious. I will not be using the "security system" beyond the trial, but I was curious.

The nest/final 15-T has also been posted. Of note to the W4 is no "exempt" box. Those who want to claim exempt must hand write Exempt in a specific location on the form. This will require retraining for employers, as before, hand written "extras" made the form invalid.

What exactly was the message?

I have used Medlin a few times...

"no further substantive changes" "CAUTION: If you have privacy concerns..." Title is now "Employee Withholding Certificate". No mention of allowances.

"My specific question: The W-2 taxable wages for contributions to a s.125 medical plan cannot be reduced for a 2% shareholder as it can for other employees. Can the Social Security/Medicare wages be reduced?" 2% Shareholders cannot participate in a 125 plan as they are not considered an "employee" for 125 purposes.

All wages allocated to retirement or similar Box 1 exempted? If the state wage box is also 0 (except PA), then retirement or similar seems logical. IIRC (and NOT something I deal with) a deceased employee's wages paid after death go to the estate and are 1099'd (and depending on the timing, also on the employee W2).

Made me look... FTB Pub 1050. The unprotected activities list is fairly extensive. Dollar amount is not a catch-all for protection from taxation. "In-home" offices have what appears to very specific "protection", which extrapolates to anything not in the permitted list for in-home offices will trigger taxation.

"All revenue generated in the State of Colorado." Not if there was an employee in CA (the position CA likely takes.) From a company perspective, it may be prudent to pay without fighting, since defense can be more costly, with no guarantees of success. How many who get dunned for this will fight over $800 and form prep fees? I did see an article where this type of enforcement may be going to the supreme court, based on another state claiming CA enforcement is hurting them (taxing on passive investments is the source of irritation in the case).

Appears OK has a 300 in a quarter threshold for withholding. Their UI threshold appears to be 1500 in a quarter. The withholding threshold will trigger needing to register as an OK employer, which will be costly enough to manage. I cannot fathom what WC and liability insurance would cost on a college student's residence, and it would be expensive to draft and execute an agreement limiting the work location to their residence (and not allow anyone else in the work space for liability reasons). Unless the employee is extremely profitable/desirable, your termination assessment is the only logical choice. Unfortunately, (what is now un) common sense no longer prevails, and we must all consider the cost of defense as well as the liability costs...

https://www.mobileworkforcecoalition.org/

Good basic information: "Income tax withholding. An employer is expected to withhold state income tax from an employee’s wages any time that employee is subject to an out-of-state income tax. An employee will be subject to an out-of-state income tax if he or she resides within the state or if he or she works within the state on more than just a transient project or contract. Employment Taxes. Some other payroll taxes include Social Security, Medicare, and unemployment taxes. A business may be required to remit these taxes when (1) an employee is working in that state for more than just a temporary work project, (2) an employee resides in that state, or, (3) an employee travels into that state to solicit business or perform other business duties. Some states are stricter with what constitutes a “temporary” work project and will impose a withholding requirement on an entity whose employee performs work inside the state for even one day. Other states hold reciprocal agreements where both states agree not to impose a withholding requirement on any employee who works in their state. Missouri, Kansas, Nebraska, and Oklahoma do not hold a standing reciprocal agreement with any other states, but Iowa and Illinois hold reciprocal agreements with each other. As these rules vary wildly, more research will be required when looking into any one state’s requirements." --- OK has/had some sort of dollar amount limit/trigger. Many states are all amounts earned while in said state. Not sure how current the list I found is, but OK non residents trigger nexus at 300 in a quarter. Practically speaking, the limits and triggers are so low, and the liability is so high, the remote worker must be very valuable to be kept. The cost of a new nexus, and compliance, is significant, especially because a specialist attorney should be used to create employment documents which protect the employer. College student remote employee, no way for me to see it as being profitable, even in a state the employer already has nexus.

As an "employee" who also has a late year heavy income, I have been randomly reviewed for the late year heavy withholding in the last 30 years. Never had a penalty, as it seems there is nothing improper (albeit unusual) for an "employee" to make most or all of their withholding payments with their last paychecks of the year. One instance was when the IRS did away with the W4 review process. They sent me a lock in letter, which was revoked after a phone call and record review - that I had not had any under withholding issues in the past). My income continues to flow in in a similar manner, and I still have no withholding in Q1-3, with no issues from the collection folks. Anecdotally (I cannot remember the exact details), I know of at least one business owner who is in a similar situation, and while there have been inquiries, any penalty has been abated each time, since the quarterly deposits matched the quarterly income. In one case, the business owner "held" substantial checks from their clients until the new year, and in audit, as a cash based business, the check hold was not an issue to the particular auditor.

Is that figure just for business income tax ("doing business in")? I have seen those types of references before. For employees and payroll taxes, regular work performed in CA triggers payroll nexus... Most states are similar, albeit maybe not as aggressive.

"working from her computer" Wherever the employee physically located while doing the work creates nexus for the employer in the location the employee is in. For the employer, hopefully they are already "in" the state(s) the employee is working from, instead of this employee creating a new state nexus (don;t ignore the locality nexus issues, such as different min wages, local taxes, PFML, etc.). Hopefully the employer has complied with their requirements, such as treating the home location as a proper "office", such as labor law posters, liability insurance, etc. The employee should mostly care about the liability insurance aspect.

A cynic would say those who work in the IRS forms division need work too, or their budget will die...

Two people, no money, means a couple of years of all of their non working for money time just to get close to having something which could possibly generate revenue... The best advice is to refer to a business lawyer to setup their structure, then, if they get that far, coming back to you for tax advice. Get a decent retainer before spending any effort on their situation, as it may be the only money you ever see from their venture.

If you want to be sure the item has the best chance of being received (no way to control viewing...) use SMS. Email cannot be relied on for delivery, let alone receipt and viewing. Many many folks use free email services. Free email services protect themselves and keep their costs low. This means not all messages will pass their filters, and many times, there will be no bounce message when the address is invalid.

There will be a large number of hours spent just getting to a beta status, which should be accounted for at a reasonable rate. This amount, no matter the structure, will not likely ever be covered by revenue. Then, if they get to release status, the only reasonable way to make money these days (for new ideas) is via mobile apps and ad revenue, which takes time and multiple titles based off the same code (low cost to develop additional titles.) The chances of them being the next "DOOM" are too small to consider - if it happens, they can deal with it then. When asked about getting into the software market, my answer remains unchanged after decades. Develop something you know, use, and can't live without yourself, share it with others, and if it is to be profitable, it will become apparant when you share with others. Then, after sharing, if it seems profitable, setup a "real" business. If developing other than by yourself, setup some sort of structure which can be enforced if the item becomes a product. Setting up a business first will only take away from development. Just one person's opinion, who happened to get into the try before you buy software industry at the right time... (Also applies to an old passion of mine, auto racing - and too many who tried to setup businesses for a hobby with zero chance of making a profit. One interesting item in auto racing, is when racing as a business, the often unforeseen pitfall of needing a commercial drivers license to transport the car... and all the CDL regulations involved such as hours, weight stations and inspections, etc.)

I run across, almost daily, cases of "but we have always done it that way", so sometimes the issue could be unknowing beneficial ignorance. Catch-22 (which I am actually rereading). We may not be allowed or comfortable prying and sharing knowledge, and the needed information may not be shared on purpose or by ignorance. In your cases, there are things your clients may not share. In mine, it is things such as "I want to pay something to my employees pre tax", with push back when I ask for details on the "plan".

Created the code to calculate using the new options, using the 2019 calculations per draft Pub 15-T. Using annual figures, all with 75k taxable, no extra income, credits, or deductions. Single 2 Jobs (2020 W4 option) 13623 FWH Head of Household 2 Jobs (2020 W4 option) 12175 FWH Single 0 Allow (old W4) 11522 FWH Single 1 Allow (old W4) 10598 FWH Single 2 Allow (old W4 or 2020 W4 form with implied allowances) 9674 FWH Married Jointly 2 Jobs (2020 W4 option) 9674 FWH Married Jointly 0 Allow (old W4) 7196 FWH Head of Household 2 Allow (2020 W4 option) 6901 FWH Married Jointly 2 Allow (old W4) 6188 FWH Married Jointly 3 Allow (old W4 or 2020 W4 form, implied allowances) 5684 FWH --- Note the two in bold. Shows insight as to how the Married 2 jobs was "built". Using the new W4, Married with the two job box checked is the same WH as Single (which has 2 implied allowances) The Single 2 jobs is the "new" calculation, as well as federal Head of household WH status. Using my test figures, the possible under withholding (new form) for those with less than the implied allowances, is significant. For those preparing the new form, knowing the implied allowance numbers will be needed, if comparing to knowledge of what was on the old form, or using "experience" with the old form. This can be handled relatively easy. Whatever the allowance value is (currently 4200), if you want to claim less than the implied number of allowances, add the allowance amount (currently 4200) per each allowance less you want to claim, other income (4a). To equal what the old Single 0, use Single, with 8400 (using current allowance figure) as other income. With the new Single 2 jobs being radically more WH than the current Single zero, and with many set on the idea of using the current Single zero as a "fail safe", the new "fail safe" would be Single, 8400 (adjust for the new allowance figure for 2020 and beyond) other income. --- Of course, until the final revisions are released, it is only speculation... With no impetus to negate the existing forms, the calculations and W4 seem reasonable, even with the ugliness of implied allowances in the new calculation.