Medlin Software, Dennis

SSA has allowed laser printed plain paper W-2/W-3 since TY 2001, providing you are using software that has been approved by the SSA (the software vendor has to put their vendor code on the forms). As far as I know at this moment, IRS does not offer a laser printed plain paper 1099 approval, although I am rechecking. Have heard that some print 1099's on plain paper without problems, but as a software provider, I cannot offer it until there is formal approval/acceptance.

Jainen, I can see your point, but it also supports mine. People have the right to do what they want with their earnings. Increasing withholding with no tax increase (and not even trying to pretend it is not a budget gimmick) is wrong. That is why I am so strongly for willingly rendering what is due, but basing it on actual calculations of liability, not an arbitrary "marital status", "allowance" etc. I have no problem with withholding a certain amount in case something changes, but hearing about thousands of dollars in refunds when the person may need a refund loan to pay a bill is silly. I may be biased because I have to follow all the state and territory withholding methods, as there are some CRAZY methods in use... CA is creeping higher on the list.

Good information Wayne. I do read here how many clients people refund shop. It seemed reasonable to speculate if one gets clients because of the refund they can help obtain, it may not be in their interest to "reduce" the refund by letting the taxpayer use their money as earned. I have no problem paying taxes owed, it is a good thing to have earned enough to owe taxes... I do try to delay payment as long as possible. If the law is deposit same as last year's liability or be within $400 of current liability, I will do whatever is the minimum to avoid penalty. I think of it as an interest free loan, being the same as paying utility bills on the due date instead of months in advance. I just never "got" using withholding as a savings(?) plan. If one is so bad at money management they cannot make their own savings deposits (in an interest bearing account - even at today's rates), they should probably be using a personal money manager. Since I have the ability to do so, I have little or no withholding until December, and withhold what is needed in December. A decent part of my income is in December anyway, but I even used to do this when I was an hourly employee. There is one caution to doing this, I did get a lock in letter a year or two ago because of no withholding on a decent amount of earnings. Since my employer knows of my strategy, it was not embarrassing to me, and a 5 minute phone call to a live person at the IRS cleared up the issue. The IRS rep saw I paid on time, had no penalties, and cleared the lock without even inquiring as to my withholding strategy.

Personally, I never get a withholding refund from CA or Fed as I make sure to withhold only enough to avoid penalty... No tax preparer is likely to advise that as clients seem to shop for the biggest refund. Funny money is all it is, delay a civil servant payroll for one day to shift the pay amount to the next fiscal year, increase employee withholding but not liability, juggle the percentage of deposits to front load the tax year, etc.

CA EDD has posted the formula/tables reflecting 10% increase in withholding (no increase in tax liability) to take effect on paychecks dated Nov 1, 2009 or later. Let the allowance adjustments begin!

And a good answer. When I fill them out, they want a doctor and dentist name, as well as a phone number. I have been putting in 911 for years as the only time the school should be calling for medical for my kids is when 911 is needed. We also use one phone number and only one "home" phone number. It call forwards to a few others until someone answers. Was great when the kids were young, they only had to memorize one number and were sure to get mom or dad...

Don't use HM, but when similar problems crop up... there are two things I do first. Bad Cache. Clear the browser's cache and try again. Spoiled Cookies. Clear the cookies from your browser and try again.

Julie. Check to see if you are blocking cookies by default. Most BB sites require a login cookie, at least for the session, to be able to post. Firefox Tools Options Privacy Look the the Cookie settings. If you want to continue to block cookies, then "allow" atxcommunity.com using the exceptions button. Assuming the cookie setting was the issue, once you allow the cookie, you should be able to log in and post from FF. Dennis (using FF)

Paper or paperless: Prepare for a disaster. Test your recovery methods. Review/repeat at least once a year, if not once a quarter. Plan/test for: Simple stuff. Computer failure/theft, power outage, internet outage, phone outage, etc. Major stuff. Office destroyed, unable to get to office for days, unable to use phone for days, unable to use internet for days. Worst case. Imagine having to start over with no access to your current computer equipment, on site storage, phone (cell and LL), internet, etc. Can you go somewhere else (a friend/relative's location in another city), buy a new computer and other hardware, and be back in business in less than 72 hours from arrival? --- know how to get mail and call forwarding processed quickly actually test starting over with a new/replacement computer and peripherals

Similar to what I do. Not exempt, but a large enough number of allowances to have little/no withholding for 11 months, and to not go over 10 allowances for CA (in CA 11 or more allowances requires employer to send a copy to the state, Fed did away with that issue). In Dec, I figure my liability and have it withheld as additional, just enough to avoid penalty. I take a weird pride in having to make payments in April instead of loaning money with no interest. I did have to deal with an IRS lock in letter the first year they started those, but a quick phone call and the rep's review of some records got the letter rescinded. A lock in letter could be embarrassing in some cases. Even if one has to deal with a less than cooperative employer/payroll department, an employee can make this work as long as they change their withholding information in November, in case the employer takes advantage of the 30 day window to implement the changes. What makes it funny (to me) is my first job where I made enough to be subject to withholding was one where I was also doing the payroll, and I figured out this strategy way back then. I don't understand why so few adopt a similar strategy - although I suppose it is simple fear of the government. --- While not a tax preparer, I can safely guess far too many clients judge service on how big their refund check is, so preparers have no incentive to offer withholding advice, no matter how sound it may be...

For that those that help clients with withholding... CA has changed WH effective immediately. All brackets are up .25% in an effort to minimize under withholding due to the .25% tax hike for 2009. Employers will not be getting new booklets for at least a couple more weeks. Also, the low income exemption amount was lowered a bit, subjecting certain lower income folks to CA WH. CA WH Update Info AZ is updating their "percentage of FWH" state withholding May 1. This appears to be an effort to minimize under withholding due to the lower FWH rates from the tax stimulus. Better still, in July 2010, AZ will begin withholding using their own formula/tables instead of relying on FWH. Those states using FWH in their calculation are likely tiring of getting Bush, Bush, and now Obama'd (mid-year FWH changes). There are only a few states left that adjust their WH based on FWH - AZ is the last state using a percentage of FWH as their withholding method. AZ WH Update Info NY changes significantly beginning May 1. NY WH Update Info (I don't make the withholding rules, I make a living dealing with them...)

Couple of things... Medlin Payroll has been $50 per year for a few years (sorry Gene...) It is correct we do not track/calculate/report/pay sick or vacation. Tried coming up with such a system many years ago. The configuration and setup was more complicated than the entire program. Why? There is no required/standard method of sick/vacation earning/tracking/payment - each employer can come up with nearly anything they want... It is possible that each employee could have their own settings as well. Since we try not to be the complicated program that can do all for all, we dropped the idea pretty quickly.

Long winded answer ahead... (anytime I can stir up thoughts about record retention I do) Medlin's Accounts Payable can be used to pay, track, and report information for vendors needing a 1099-MISC. We do not mix employees (W-2) and non-employees (1099) in the same program as one might call that "evidence" of employment... We do not e-file 1099's at present. We find "encouraging" the printing and mailing of the forms also encourages record retention - something many folks forget to do. While many tout paperless offices, I have not found any computer or storage media I would trust with my record retention, at least not enough to stop maintaining paper records. I also find it easier to open a file cabinet when an old record is needed versus trying to find, open, and print an electronic record. I am not saying electronic record keeping is bad. Some of the things I have yet to get past are: Media changes. 5.25, 3.5, LS-120, Zip, tape drives, etc. Media styles come and go. If you store on a certain type of media, what if you do not keep the needed hardware? Extra work is needed to move data from old media to current, increasing the chance of loss. Hard drives. Mean lifespan is 3 years. Not enough for my needs... Portable media. Portable means easy to lose. Tax agency failures. 2005 saw a problem where the IRS lost a large amount of 941 forms. We were getting questions on how to reprint these forms for several years. Maybe there was one person who had a reliable backup but the overwhelming majority had no backup and had changed computers since 2005. I am sure something like this will happen again... --- Paper records are easy. If you have to save 5 years, use 5 cabinets. Every 5 years, destroy the old data and use the empty cabinet for the current data. If your paper records are destroyed, you can use your online and off site backups. I do backup a couple of times a day using a series of automated and manual steps. Cobian to manage what I backup, compression, encoding, and password protecting. Mozy for online storage (also encodes and password protects). DVD's to keep copies in the office and for copies to take home. I never have more than 4 hours of data at risk (that could be lost) and I have 4 weeks of backups I can choose from. Before online backup was common, I would e-mail the files to myself and leave them on my mail server. The final thoughts: Can YOU, at this moment, produce a record from 5 years ago? Can you do so in under 15 minutes? Under an hour? Have you actually tried to? Time is money. Time spent trying to dig up records costs you money as well as your client.

You could always try [email protected] :D

For those that process payroll, CA released (today) withholding changes (up one quarter percent across board, lowered low income exemption). New calculations should be implemented ASAP. New CA WH Calculations NY State WH changes as of May 1. NY State WH Changes

Aflac is a company/brand/duck name, not a specific type of deduction/payroll item. There can be pre-tax items (Sect 125) as well as after tax items in what sometimes is referred to as "Aflac" deductions. Check with the plan provider/adviser/documents as well as the individual employee records. I know this is not much help...

Sometimes miracles happen! That is (no money from county = no one going after dad for reimbursement) probably why dad tried claiming as dependent too. Must have been a strong friendship.

Be VERY careful. I am a CA foster parent. To claim a foster child as a dependent, one would have to report any foster care payments from the county as INCOME, which can very well be the worst choice. It is pretty hard to pass support test when reporting foster care payments as income, as well as increasing taxable income! I have NEVER personally had a better tax situation by claiming a foster child as a dependent when receiving any foster care payments/medical coverage from the county/state. Even in "family" foster placements (grandkids, niece/nephew, etc.) the county/state might be providing financial support to foster parents. --- Other: The counties I have received payments from have never given me a 1099. There can be additional "support" for foster kids, funds for clothing, medical care, etc., which might be subject to calculation in any support test. There are so many factors, one has to dig deep. A signed statement from TP documenting support (or lack of) from the county/state might be in order (maybe not for age 19, but for the previous years...)

Good time for all to see how prepared you are for a computer change, whether a new box or to replace a failed or stolen one. Should be something you have thought out, planned out, mapped out, and even simulated.

>6 months incarcerated, no chance of claiming dependent. <=6 months, if TP can prove >1/2 support, then dependent can be claimed. Reimbursing the county/state/whomever will help in the calculation of support.

Jail is not an exception... although I can see cases where jail is education as well as a vacation for the parents. I would say >= 6 months incarcerated, no way the parents have a dependent. More than 30 days incarcerated, jail could have provided more than half support depending on the situation. --- Residency Test To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents. Temporary absences. Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: * Illness, * Education, * Business, * Vacation, or * Military service.

Can parents show the provided more support for the TY than the jail? (I suspect you can find a document showing how much the jail "accounts" as their daily "room & board" cost.)

New one on me, and I have a CDIB card... There are likely things to consider if living on/near and working on a reservation. Pub 8845. Never living on/near a reservation, I have no actual experience with this.

No option for employers. Refer to the link in my earlier message (Notice 1036). No different that deciding to use 2004 withholding calculations because your employees "like" a big refund check. Don't worry about what the employees want, that is for the employee and their tax person to figure out. As an employer, you have only one choice, withhold based on the current methods from IRS (your state, etc.). Added: Employees, should they do nothing (like submit a new W-4), will be getting the Jan, Feb, and part or all of March's value of the credit as part of their tax return.

The "advance" release of the calcs/tables: http://www.irs.gov/pub/irs-pdf/n1036.pdf After a quick check on the changes, it appears the calculation change is "12 month" based: M-2, 5k per month old - 495 FWH new - 429 FWH diff - 66 66*12 = 792 (close to the 800 number) Implement 3/1/9, couple pays 666 less FWH Implement 4/1/9, couple pays 594 less FWH I point this out for those that counsel customers to the minimum legal withholding. It will take full year figuring and W-4 adjustments to receive the full benefit through paychecks. I suspect the IRS used 12 month calculations to avoid having to come up with a new set of bracket dollar levels for 2010 (other than index adjustments) instead of the most accurate method for 2009. This is "safer" as it does not appear to cause under withholding since there is a 2 to 3 month "buffer", depending on when the employer implements the new calculations. Dennis