Generally speaking, if you take a client out to dinner, 50% of the cost of the meal is deductible.  The IRS, as a means to stimulate the restaurant industry, removed the 50% limit on this deduction and replaced it with 100% deductibility for any meal expense incurred in 2021 and 2022.

To make sure that your deduction stands up to IRS scrutiny, it is recommended to document who, what, when, where and how much for each meal deduction.

1. Who were you with?
2. What did you discuss?
3. When did you do this?
4. Where did you go?
5. How much (including gratuity) did you pay?

The key to having your deductions hold up in the event of an audit is proper documentation.  We upload all receipts to our QuickBooks file and in the memo line, we type in the who and the what.  Everything else is included in the QuickBooks entry and the receipt is attached for future reference.

Because of the temporary 100% business deduction, it is a good time to take advantage of this deduction which will end on December 31, 2022. 

The State of Wisconsin sometimes allows companies to “purchase” a lower unemployment insurance tax rate.  Wisconsin Pay has done the calculations on behalf of our clients and will be sending you an email if it pays for you to buy down your 2022 rate.  This service has been provided at no charge to you by your Payroll Department (a/k/a Kayla and Katie at Wisconsin Pay Specialists).

If your company will save money by making the voluntary contribution, you will receive an email from service@wisconsinpay.com that will include the amount required to be paid to lower your rate and the tax savings.  You can go online and make this payment yourself or contact us and we’ll make it for you for a fee of $35.

The Voluntary Contributions must be made no later than NOVEMBER 30 in order to lower your 2022 rate.  If, you want us to make the payment on your behalf, we need to hear from you no later than Friday, November 26. 

Here is an example of an employer whose Reserve Fund Percentage is 8.98% (which is close to the next level of 9%).  By making a contribution of $14.12 – this employer will save $193.51 on its 2022 Unemployment Insurance Tax.    They paid the $14.12.    The best one we found was a client who had to pay 90 cents and saved $860.00!  Happy Thanksgiving!!

The Internal Revenue Service warned Thursday of a programming issue that’s affecting business taxpayers who need transcripts for requesting COVID-19 employment tax relief.

The problem affects transcript requests for Form 941, the Employer’s Quarterly Federal Tax Return. Tax professionals have been filing amended versions of the Form 941 to help their clients claim the employee retention credit. But the programming bug won’t be fixed until Sept. 26, according to the IRS, which could further delay tax refunds for the businesses that need them.

The problem is only the latest in a series of technology problems plaguing the IRS, which has struggled to update its antiquated systems to handle all the many changes in tax policy and tax relief that have arisen since the start of the pandemic.

“There is a Transcript Delivery System (TDS) programming issue impacting business taxpayers who reported information related to COVID-19 employment tax relief on Form 941,” said the IRS in an email last Thursday to tax professionals. “Account Transcripts requested for Form 941 for all quarters in Tax Year 2021 may not generate properly. Transcripts are not being delivered to the Secure Object Repository (SOR) Mailbox for e-Services users. When viewing the transcript online, a message will display on the transcript indicating TDS has encountered an unrecoverable error processing the request. With the Postal Mail delivery method, no transcript is mailed.”

That will likely mean further frustrations for beleaguered tax professionals and their clients since even postal delivery is affected by the bug, and the overworked customer service reps at the IRS won’t be able to help. Tax pros will also be facing confusing messages from the system.

“As the Record of Account Transcript is a combination of the Tax Return and Account Transcripts, the Record of Account Transcript is also impacted and can display a message of ‘No record of return filed,’” said the IRS in its email to tax professionals. “IRS Customer Service Representatives are also unable to obtain these transcripts.” The IRS expects the programming issue to be fixed on Sept. 26, 2021.   Hang on… this too shall pass.

Payroll taxes are mandatory contributions that both employees and employers make including federal, state and local income tax, Social Security tax, Medicare tax, and federal and state unemployment tax.  The percentage of payroll taxes paid by an employer is a minimum of 9.25% depending on state unemployment rates, so it is important to include the employer’s taxes when calculating the “real” cost of an employee (and don’t forget about your worker’s compensation).

The employer pays 6.2% for Social Security; 1.45% for Medicare, .6% – 6% for federal unemployment and an additional percent for state unemployment (dependent on employer).

The employee also pays 6.2% for Social Security and 1.45% for Medicare.  The employee does not pay toward unemployment but does have federal and state income taxes withheld.  This amount varies by employee based on the W-4.  While the state withholding procedures have remained unchanged (at least in WI), the new federal W-4 has been a source of stress for many employees.

Basically, the Feds look at each paycheck and assume that is how much you will make each pay all year and taxes accordingly.  Therefore a check that includes a bonus may have substantially more federal income tax taken out and a check with only a few hours on it may have no federal income taxes withheld.  To determine how best to complete your W-4 or to see if you are on target, the IRS has created a Tax Withholding Estimator  Tax Withholding Estimator (irs.gov).

Sound confusing – it is! 

Let us help clear things up for you and your employees (and keep you compliant)!

Did you know that as an employer you may be eligible for the ERC (Employee Retention Credits)?  These credits apply to qualified wages paid after March 12, 2020 and before December 31, 2021.  Eligible employers for the purpose of ERC either fully or partially suspended operations during any calendar quarter due to orders from the government due to COVID-19 or experienced a significant decline in gross receipts during the same period.

To date, we have done returns on behalf of several of our clients and they will collectively receive well over $100,000 in credits.    These credits are designed to encourage employers to keep their staff working even when sales are down.  However, the time frame to receive the credits is now estimated to be between 8 – 11 months from the time you file the return.   If you think you may qualify, please call Kayla at our office 920-499-8463 ext 1 and she will assist you in moving forward.  (Note – you do not need to be a current client in order for us to file for ERC on your behalf.)

For more information, go to

 FAQs: Employee Retention Credit under the CARES Act | Internal Revenue Service (irs.gov)

Let’s talk about referrals!  It is the way that most small businesses grow their business.  I tell you, you tell your friend, who tells her sister, who tells her mom and pretty soon business is booming. 

I usually only do business with businesses that are referred to me.  I feel that if you are willing to recommend a business to me, that business must have done right by you and will therefore, do right by me. 

When I refer you to a business that I have worked with, I am doing so with confidence that you will be treated well and taken care of.    I also know that if things are not going well, I can call that business on your behalf and help to get things moving smoothly. 

I don’t know anyone who grows up thinking they want to run payroll.  But I do know people who wake up wanting to help people run and grow their businesses.  By making referrals, I am helping both the business I am referring to AND the business needing the service/product.  It is truly a win-win!

For the month of August– Wisconsin Pay Specialists is offering a $50 gas card for a referral that signs on with us to do payroll or bookkeeping!  Don’t keep us a secret.

Wikipedia says that a testimonial consists of a person’s written or spoken statement extolling the virtue of a product or service.    But testimonials also demonstrate your credibility and expertise.   I rely heavily on testimonials – you should to!

 As a business, it is important for your potential clients to trust you in order to part with their money.  Testimonials are a great way to let others know of your ability to create results.   Here are some suggestions to get your testimonial tank filled up.

1.  Word-of-mouth is and always has been a great tool.  In today’s world, word-of-mouth usually takes the form of Facebook, Instagram or Twitter – so one person’s endorsement’s power has grown exponentially.    Keep in mind, getting the word out on social media is not always positive and may require some response from you.
2. A more controlled method is to make a list of colleagues, clients, and co-workers who have seen you in action.  Think of anyone who has benefited from your guidance and expertise.  (Mom’s glowing praise does not carry much weight!)  
   • What results could they attest to?
   • If they are unsure what to say, tell them what type of clients you are interested in.
   • Perhaps have them explain a problem and how you resolved it.
   • If they are really struggling with what to say, create a couple of sample testimonials for them to approve.
3.  Make sure all of your testimonials include your full name and the full name of your company so they are picked up in searches such as Google.  For example:

Wisconsin Pay Specialists and Kat Meissner rock the payroll and bookkeeping world!   I have never felt so good about my office management as I do now that I have hired them.  It was one of the best business decisions I ever made.     – Kat Meissner, Wisconsin Pay Specialists

4. It is also important to get first and last names, as well as full company names of the people giving the testimonial to lend credibility to their words.

Back in “the day” payroll checks were calculated using the infamous green ledger sheets and cash or handwritten checks were delivered to the employees on payday. This was ok until you realized you had a sneaky employee who mastered “doctoring” their check and wha-la their $1000 check is now a $1800 check.

And now it’s time to get into the 21^st Century with Direct Deposit.

As an employer why direct deposit?  So glad you asked!

1.  No more checks run through the washer so no more stopping payment on checks and no more cutting replacement checks.
2. No more “I have to leave work early so I can get my check into the bank before 2.”
3.  Employees can log into their bank account and see their pay – usually in the wee hours of the morning of payday – even before they get to work.
4. Funds are available immediately – employees no longer must wait for the check to clear in order to access their pay.
5. Even if your employees are off on payday – they still get paid – with no hoops for you to jump though.
6. Your bank account information is more secure, as pay stubs for direct deposit do not include the employer’s bank account number.
7. Your employees can distribute funds to multiple accounts to help with their budgeting and implement a savings strategy.
8. Entering your payroll is now done with one entry rather than entering and waiting for multiple checks to clear – saves on bookkeeping time.
9. With direct deposit, you can also have employee self-services.  No more worries about employees seeing other employees’ checks and finally
10. You’re helping the environment!

If you are a Wisconsin employer, you can require employees to be paid via Direct Deposit.  If you have an employee who does not have a bank account – no worries, we have Pay Cards – which are debit cards that we load their pay onto. It is time.

Through hard work and perseverance, I’ve gone from living paycheck to paycheck – to living direct deposit to direct deposit.

Updated DOL/IRS Guidance on Required Documentation

To Claim Tax Credits

for COVid19 Related Paid Leave Payments

The Emergency Paid Sick Leave and paid leave under the Expanded FMLA provisions in the Families First Act established five primary “qualifying reasons” justifying up to 80 hours of Emergency Paid Sick Leave:

1. Quarantine or isolation order by federal, state, or local authorities related to COVID-19
2. Employee has been advised to self-quarantine by a health care provider due to concerns related to COVID–19. (Note: this could include advice based solely on an employee’s high-risk status, with no exposure to an infected person or symptoms of infection.)
3. Employee is experiencing COVID-19 symptoms and is seeking medical diagnosis
4. Employee is caring for an individual who is quarantined
5. Due to school or childcare closures, an employee is unable to work to care for children

Up to 10 weeks of Expanded FMLA Paid Leave may be taken, but only for reason No. 5 above.

Employers making payments under this Act are entitled to reimbursement in the form of quarterly tax credits on their federal payroll taxes. The Department of Labor has indicated that in order for employees to be eligible for these paid leave benefits, and for employers to be eligible for reimbursement via quarterly tax credits, employers must obtain specific documentation, established by the Internal Revenue Service, from employees requesting either type of paid leave.

The IRS released guidance last week specifying the documentation that will be needed for employers to receive these tax credits. These guidelines require that each employee seeking leave must provide written documentation containing the following information in connection with their request for Paid Sick Leave (“PSL”) or Emergency Family and Medical Leave (“EFMLA”): (1) employee’s name; (2) the date or dates for which leave is requested; (3) the “qualifying reason” for the leave; and (4) a statement that the employee is unable to work (either on-site or via telework) because of the qualified reason for leave.

Employees must also provide additional documentation depending on the reason for taking the PSL or EFMLA:

• To take PSL because the employee is quarantined, the employee must also provide the name of the government entity that issued the quarantine or isolation order.
• To take PSL because the employee has been told to self-quarantine, the employee must also provide the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19.
• To take PSL because the employee is caring for an individual for COVID-19 reasons, the employee must also provide either: (1) the name of the government entity that issued the quarantine or isolation order to which the individual being cared for is subject; or (2) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. The IRS Guidelines further require that the employee provide the name of the individual being cared for and his or her relation to the employee.
• To take PSL or EFMLA to care for a son or daughter due to school or childcare closure, the employee must also provide: (1) the name and age of the son or daughter; (2) the name of the school, place of care, or child care provider that has closed or become unavailable; and (3) a representation that no other suitable person will be caring for the son or daughter during the period for which the employee takes PSL or EFMLA. Additionally, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than 14 during daylight hours, the IRS requires a statement that “special circumstances” exist requiring the employee to provide care.

Additional Employer Records and Documentation Required to Obtain the Tax Credit

In addition to the information set forth above, employers must also create and maintain (for four years) records that include the following information:

• Documentation to show how the employer determined the amount of PSL and EFML wages paid to employees that are eligible for the credit, including records of work, telework, and qualified PSL and EFML.
• Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
• Copies of any completed Forms 7200, “Advance of Employer Credits Due To COVID-19,” that the employer submitted to the IRS.
• Copies of the completed Forms 941, “Employer’s Quarterly Federal Tax Return,” that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

CoVid19 Company Policy

For those of you who are still open or will be allowed to open in the midst of the CoVid19 Pandemic, it is highly recommended that you create a company policy to help keep you and your employees safe.   You’ll want to give a copy of this to your employees and hang a copy in a common area for all to see (typically near the timeclock or in the breakroom).

Following is some verbiage that you are welcome to use and adjust to fit your specific situation.

                                                 Coronavirus (COVID-19) Company Policy

Policy brief & purpose

This company policy includes the measures we are actively taking to mitigate the spread of coronavirus.

You are kindly requested to follow all these rules diligently, to sustain a healthy and safe workplace in

this unique environment. It’s important that we all respond responsibly and transparently to these health

precautions.  We assure you that we will always treat your private health and personal data with high

confidentiality and sensitivity.

This coronavirus (COVID-19) company policy is susceptible to changes with the introduction of

additional governmental guidelines.

Scope

This coronavirus policy applies to all of our employees who physically work in our facility.

Policy elements

Here, we outline the required actions employees should take to protect themselves and their co-workers

from a potential coronavirus infection.

Sick leave arrangements:

● If you have cold symptoms, such as cough/sneezing/fever, or feel poorly, request unpaid sick

leave or work from home.

● If you have a positive COVID-19 diagnosis, you can return to the office only after you’ve fully

recovered, with a doctor’s note confirming your recovery.

● If you’ve been in close contact with someone infected by COVID-19, with high chances of being

infected yourself, request work from home/or unpaid sick work leave. You will also be asked not

to come into physical contact with any colleagues during this time.

● If you’re a parent and you have to stay at home with your children, follow up with your manager

or departmental leader to make arrangements and set expectations.

● If you need to provide care to a family member infected by COVID-19. You’ll only be permitted to

return to the office 14 calendar days after your family member has fully recovered, provided that

you’re asymptomatic or you have a doctor’s note confirming you don’t have the virus. You will

also be asked not to come into physical contact with any colleagues during this time.

Traveling measures:

● All work trips and events will be cancelled/postponed until further notice.

● In-person meetings should be done virtually where possible, especially with non-company parties

(e.g. candidate interviews and partners).

● If you are planning to travel voluntarily to a high-risk country with increased COVID-19 cases,

we’ll ask you to work from home/ work leave for 14 calendar days. You will also be asked not to

come into physical contact with any colleagues during this time.

General hygiene rules:

● Wash your hands after using the bathroom, before eating, and if you cough/sneeze into your

hands (follow the 20-second hand-washing rule).

● Cough/sneeze into your sleeve, preferably into your elbow. If you use a tissue, discard it properly

and clean/sanitize your hands immediately.

● Avoid touching your face, particularly eyes, nose, and mouth with your hands to prevent from

getting infected.

● If you find yourself coughing/sneezing on a regular basis, avoid close physical contact with your

coworkers and take extra precautionary measures (such as requesting sick leave).

● Wipe down your workstation upon arrival and before leaving for the day.

● NO unauthorized personal is allowed in the facility. All doors are posted with a call information to

control facility entry.

● Maintain a 6-foot working area and if this cannot be maintained a mask will need to be worn.

● Cleaning supplies are available in the kitchen area.