DECEMBER 2014 CHECKLIST OF TO-DO ITEMS Register for EFTPS (for new employers not yet registered). Order Forms W-2, W-3, 1099 and 1096. Order payroll tax update programs for computerized payroll systems. Verify employees social security numbers and addresses for W-2s. Identify subcontractors and verify their taxpayer ID numbers and addresses for 1099s. Gather employment tax returns due for filing in January and February. Review the instructions for any possible changes from the prior year. Gather unemployment insurance rate change notifications for entry into your payroll system prior to the first January 2015 payroll. Identify any additional information that would need to be included on Forms W-2 (e.g.: third-party sick pay, group-term life insurance, relocation expenses, health insurance for S-Corp shareholder, etc).
EARLY 2015 DUE DATES AT A GLANCE January 1, 2015 Update payroll system with new 2015 state unemployment rates. Ensure that any new 2015 withholding calculations are in place. January 31, 2015 Distribute employee copies of Form W-2 File Employer's FUTA return Form 940 with IRS File Forms 941, 943, 944, and 945 with IRS Submit state unemployment insurance report Distribute Forms 1099 to recipients February 16, 2015 Remove 2014 Form W-4 Exemption for any employee who has not completed a new exempt W-4 for 2015. Set withholding status to single and 0. March 2, 2015 File paper copies of: State copies of Form W-2 with MW508 (Maryland) Transmittal Form W-3 and federal copies of Forms W-2 with the Social Security Administration Transmittal Form 1096 and IRS copies of Form 1099 with IRS Form 8027 with the IRS March 31, 2015 File electronic versions of above forms, if not paper-filed.
2014 PAYROLL TAX CHECKLIST... AND WHAT'S NEW FOR 2015 To help you complete your employment tax returns on time for 2014, we have provided a review of what s due. FORM W-2 By February 2, 2015, give all 2014 employees their copy of Form W-2. The social security wage base for 2014 is $117,000. Be sure to check that the total of the amounts in boxes 3 and 7 on Forms W-2 does not exceed $117,000. Also, verify that the amount in Box 4, social security withheld, does not exceed $7,254. Box 5 should include all taxable Medicare wages, as there is no wage base limit for Medicare tax. Proofread all information on each W-2, especially social security numbers. The IRS may penalize you for each incorrect or missing item. Expect to pay a penalty for failing to file Forms W-2 by the due date. The penalty is based on when you file the correct Form W-2 as follows: $30 per W-2 if you correctly file within 30 days of the due date. $60 per W-2 if you correctly file more than 30 days after the due date but by August 1. $100 per W-2 if you file after August 1 or you do not file the required W-2s. For employers who file their W-2s electronically with the Social Security Administration, the due date is extended to March 31, 2015. For information on how to file electronically, call the SSA at 1-800-772-6270. Keep for 4 years any employee copies of Forms W-2 that are returned to you as undeliverable. However, if the undeliverable Form W-2 can be produced electronically through April 15 of the fourth year after the year at issue, you do not need to keep undeliverable employee copies. Remember: The IRS considers payroll tax liability on the date a payroll is issued not the end of the work period. For example, paychecks issued December 31, 2014, are included in the fourth quarter of 2014. Paychecks issued January 1, 2015, for work incurred the last week in December 2014 are included in the first quarter of 2015.
Make sure you report related payroll items in Boxes 12 and 14 on your W-2s. Specific letter codes are required in Box 12. (See list of Box 12 codes in the form's instructions.) Read the instructions carefully to see what applies to you. State Reconciliation of Forms W-2 (MW508, VA-6, etc) By March 2, 2015, file Copy 1 ("State Copy") of the W-2s with each state for which you have withheld taxes. Maryland employers should use the reconciliation form (MW508) that was mailed to them in November 2014, along with the notification of filing status for 2015. States other than Maryland might have different due dates for the annual filing. Check each state s website for your forms. FORM W-3 By March 2, 2015, file the transmittal Form W-3 and the Federal copy of Forms W-2 with the Social Security Administration. Wages and withholdings on the W-3 transmittal form must equal the combined totals of those reported on your four quarterly Forms 941. If using regular mail, mail all Forms W-2 and W-3 to: Social Security Administration Data Operations Center Wilkes Barre, PA 18769-0001 If using certified mail, mail all Forms W-2 and W-3 to: Social Security Administration Data Operations Center Wilkes Barre, PA 18769-0002 If you use an IRS-approved private delivery service (DHL Express, Federal Express or United Parcel Service), mail all Forms W-2 and W-3 to: Social Security Administration Data Operations Center, ATTN: W-2 Process 1150 E. Mountain Drive Wilkes Barre, PA 18702-7997 FORM 940 By February 2, 2015, file Employer's Annual Federal Unemployment Tax (FUTA) return.
FORM 941 By February 2, 2015, file Form 941 with the IRS and pay any remaining balance due. Use all quarterly forms to double-check the total gross wages on your W-3. FORM 943 By February 2, 2015, file Form 943 for agricultural workers who were paid wages during 2014. FORM 944 By February 2, 2015, file Form 944 instead of Form 941 with the IRS and pay any remaining balance due. This is for employers with annual liability of $1,000 or less. The IRS would have notified you of this filing requirement. FORM 945 By February 2, 2015, file Form 945 for separate reporting of federal income tax withheld for non-payroll items such as backup withholding and withholding for pensions, annuities, IRAs, military retirement and gambling winnings. There are separate deposit requirements for Form 945. Do not include with Form 941 deposits. Note: If all of your deposits have been made on time, you have until February 10 to file Forms 940, 941, 943, 944 and 945. STATE UNEMPLOYMENT TAX RETURN By February 2, 2015, submit unemployment insurance to your state's appropriate agency. FORM 1099 By February 2, 2015, give a copy of Form 1099-MISC to each self-employed person who worked for you in 2014. Form 1099-MISC should be issued to any unincorporated business or person who provided you with $600 or more in services within calendar year 2014.
Form 1099-MISC should be issued to any unincorporated business or person to whom you paid rent of $600 or more. In addition, Form 1099-MISC should be issued to any attorney you paid fees of $600 or more during 2014, regardless of the entity type. Please remember You must include your phone number on some forms. You are required to provide the telephone number of a contact person on Forms W-2G, 1098, 1099-A, 1099-B, 1099-DIV, 1099-G (excluding state or local income tax refunds), 1099- INT, 1099-MISC, 1099-OID, 1099-PATR and 1099-S, generally on Copy B. If your substitute forms do not have a specific box for phone numbers, put them in any noticeable area. The phone number will not be required on Copy A of paper forms, nor on magnetic media filed with the IRS. File other 1099s as appropriate: 1099-B Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions 1099-C Statement for Recipients of a Cancellation of Debt 1099-DIV Statement for Recipients of Dividends and Distributions 1099-INT Statement for Recipients of Interest Income 1099-R Statement for Recipients of Distributions from Profit-Sharing Retirement Plans, Individual Retirement Arrangements, Insurance Contracts, etc. FORM 1096 By March 2, 2015, file Transmittal Form 1096 and the IRS copies of Form 1099 with the IRS. Magnetic media filing requirements vary with the type of 1099 filed, so check the instructions carefully. Proofread carefully for correct social security numbers and Federal ID numbers.
NEW FOR 2015 MARYLAND MINIMUM WAGE REQUIREMENTS Effective January 1, 2015, Maryland s minimum wage requirement is increased to $8.00 per hour. Effective July 1, 2015, Maryland s minimum wage requirement is increased to $8.25 per hour. Tipped employees wages are not being increased with these new requirements. They remain at $3.63 per hour. FICA AND SELF-EMPLOYMENT TAXES Old Age Survivor and Disability Insurance is 6.2% on the first $118,500 of wages. The maximum tax will be $7,347 for 2015. Medicare tax will continue to be 1.45% on all Medicare taxable wages. Once an individual employee s Medicare taxable wages exceed $200,000, there is an extra 0.9% Medicare surtax withholding on the wages in excess of $200,000. This surtax is on the employee share only. If an employee files a married-filing-jointly tax return, and their taxable wages on the 1040 are less than $250,000, then they will receive a credit on the 1040 for the 0.9% surtax. (The extra 0.9% surtax affects individuals with taxable wages of at least $200,000, and marriedfiling-jointly with wages of at least $250,000.) AFFORDABLE CARE ACT REQUIREMENTS Beginning in the tax year 2015, employers with an average of 100 or more full-timeequivalent employees are required to offer their employees affordable health coverage that provides minimum value. Beginning in 2016, this threshold drops to 50 employees. Employers must offer coverage to at least 70% of the full-time employees (95% beginning in 2016) to avoid penalties. If insurance isn t offered to employees, the annual fee is $2,000 per employee and is not tax deductible. The first 30 employees are exempt from the penalty. For more information regarding the new Affordable Care Act requirements, visit http://www.irs.gov/uac/questions-and-answers-on-reporting-of-offers-of-health- Insurance-Coverage-by-Employers-Section-6056.
UNEMPLOYMENT TAX The 2015 Federal Unemployment Tax (FUTA) rate is 0.6%. The taxable wage limit is set to remain the same at $7,000. The taxable wage base for Maryland unemployment tax remains at $8,500. You can validate your 2015 Maryland rate by calling 1-800-492-5524 and following the phone prompts. You will need to have your 10-digit unemployment account number available when making the call. Remember to update your payroll software or notify your payroll service provider of your new 2015 rate prior to your first 2015 payroll. MAXIMUM RETIREMENT CONTRIBUTIONS FOR UPCOMING YEARS Description 2014 2015 Regular IRA/Roth $ 5,500 $ 5,500 Over 49 Provision 6,500 6,500 Rollover into 401(k) Yes Yes 401(k) 17,500 18,000 Over 49 Provision 23,000 24,000 Rollover after-tax to IRA Yes Yes SIMPLE 12,000 12,500 Over 49 Provision 14,500 15,500 MARYLAND EXEMPTION CERTIFICATE Maryland Form MW507, Employee s Maryland Withholding Exemption Certificate, must be submitted to the State of Maryland for anyone who claims more than 10 exemptions. MILEAGE REIMBURSEMENT RATE FOR YEARS 2014 and 2015 The standard mileage reimbursement rate for 2014 is $0.56 (56 cents) per mile. Beginning January 1, 2015, the standard mileage reimbursement rate increases to $0.575 (57.5 cents) per mile.
******************************************************************************************* Special Reminders: To those who also prepare Maryland Sales tax returns, the due date is the 20 th of the month. If all of your tax deposits have been made in full and on time for 940, 941, 943 or 945, you are allowed an extra 10 days to file the return. ****************************************************************************************** MARYLAND COUNTY INCOME TAX WITHHOLDING RATES TAX YEARS 2014 AND 2015 In addition to Maryland State income tax withholding, employers are required to withhold the following amounts for County taxes: County 2014 Rate 2015 Rate Allegany 3.05% 3.05% Anne Arundel 2.56% 2.56% Baltimore City 3.20% 3.20% Baltimore County 2.83% 2.83% Calvert 2.80% 2.80% Caroline 2.73% 2.73% Carroll 3.04% 3.03% Cecil 2.80% 2.80% Charles 3.03% 3.03% Dorchester 2.62% 2.62% Frederick 2.96% 2.96% Garrett 2.65% 2.65% Harford 3.06% 3.06% Howard 3.20% 3.20% Kent 2.85% 2.85% Montgomery 3.20% 3.20% Prince Georges 3.20% 3.20% Queen Anne's 3.20% 3.20% Saint Mary's 3.00% 3.00% Somerset 3.15% 3.15% Talbot 2.40% 2.40% Washington 2.80% 2.80% Wicomico 3.20% 3.20% Worcester 1.25% 1.25% Non-residents 1.25% 1.25%
For assistance now and throughout the year, call one of LSWG s payroll specialists. FREDERICK 301-662-9200 Emily Heffner, Staff Accountant (direct 240-379-6325) David Wolford, Staff Accountant (direct 240-379-6330) ROCKVILLE 240-314-7075 Mike Furey, Esq., CPA, Manager The information in this publication is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purpose of avoiding tax penalties. 2014 Linton Shafer Warfield & Garrett, PA All Rights Reserved. Commercial use or distribution of the contents of this book is not allowed without the express and prior written consent of LSWG.