bonding capacity. We consider this planning to be one of the most important services we can provide to our clients!
QWhat issues might builders face with year-end payroll taxes?
There are a few tasks that should be handled prior to year-end to ensure a smooth W-2 printing process. First, remember to include the value of an Employee’s personal use of a company-owned vehicle as income on the employee’s W-2. You cannot merely use a cents-per-mile value if the value of the vehicle exceeds $16,000 or $17,300 for a truck or van. In lieu of doing complex calculations to determine the actual value of employee use, you may use the “commuting only” rule to determine how much to include in income for a non-owner employee assuming you restrict the Employee’s use to just commuting to and from work or the job site. Under this approach, you would include in income $1.50 for each leg of an Employee’s commute, or $3.00 per day. However, for employee-owners and highly paid officers, you must determine their actual personal use income. This amount is based on the fair market value of the car and may be determined by reference to the IRS annual lease value table.
Next, a quick check of year-to-date balances to ensure there aren’t any obvious errors can save time and headache later on. For instance, verify the amount withheld for a 401k plan is not greater than the annual withholding limit ($18,000 for 2017 plus an additional $6,000 for employees age 50 and over). Also, make sure Social Security withholdings stopped at the annual limit of $127,200 in wages and for those high wage earners that the additional Medicare tax of 0.9% on wages in excess of $200,000 is withheld. Also verify that State Taxable Wages reconcile to the Federal Taxable Wages. Making sure the simple stuff matches makes the year end process smoother and prevents those unpleasant tax notices from coming in the mail and giving you heartburn.
Rhonda Gilbert (president), Tom Savage (partner), and Gary Fortier (partner), share a unique passion for equipping contractors for business success. As certified public accountants (CPAs) with a special niche for construction-based businesses, they are a power team of expertise that helps Georgia builders realize their fullest business potential.
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