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.
Who were you with?
What did you discuss?
When did you do this?
Where did you go?
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!!
Thirty years ago, I was managing Christopher’s Restaurant in Coleman. My sister owned the place and we made a pretty good team if I don’t say so myself. One day at 12:30 pm approximately 50 classic cars rolled into the parking lot for lunch! It was an exciting afternoon to say the least. As we were waving goodbye to our car-loving visitors, we both “remembered” that today was the day our federal tax deposit was due and we had missed the deadline. Ugh – that feeling of impending penalty over-shadowed the elation of the day.
That was it – we needed to outsource our payroll. We spent multiple hours each week translating timecards and then adding them and then confirming they were punched into the correct department. It was a nightmare and we rock – paper – scissored each pay period to see who had to do it.
The best business decision we ever made was to outsource, which is the process of shifting tasks to a third party instead of managing them yourself. Companies who outsource don’t have to invest in recruiting and training new employees, instead, they outsource the work to professionals who already know how to do the job.
The benefits of outsourcing include:
Keep up with competition – a small company can appear much bigger with a professional 3rd party managing certain projects.
Finding new talent – if your employees are lacking certain skills necessary for your business to grow, a 3rd party can fill that gap
Better technology – an outsourcing company usually has the best of the best equipment and technology
Professional – 3rd party companies focus on certain aspects, payroll, HR, graphic design, etc
Focus on other areas of business – determine whether your payroll person can take those 15 hours and use them to help the company grow instead of doing non-strategic tasks
Risk reduction – if you choose the right company – they will use their experience to guide your decisions and keep you compliant with the IRS, etc.
For us running the payroll wasn’t the big problem, it was the time we spent away from our customers and the inability to find employees who knew how to run payroll and keep us compliant. We liked the idea of outsourcing payroll so much, that when my sister sold Christopher’s we called our payroll company and told them we would be interested in purchasing their company when they were ready to retire – that was 2005 and we haven’t looked back!
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.)
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.
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.
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.
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.
The Fourth of July, also known as Independence Day or July 4th has been a federal holiday in the United States since 1941 – the tradition of Independence Day goes back to the American Revolution.
On July 2, 1776, the Continental Congress voted in favor of independence and 2 days later delegates from the 13 colonies adopted the Declaration of Independence, a historic document drafted by Thomas Jefferson.
From 1776 to the present day, July 4th as been celebrated as the birth of American Independence with festivities ranging from fireworks, parades, concerts, gatherings and picnics. Early on, the celebrations were usually accompanied by a public reading of the Declaration of Independence. (The Declaration of Independence: Full text (ushistory.org)
Relatively speaking, we are still a young country, still experiencing growing pains. We are not a perfect country; but I do believe that there is no place in the world like the USA. I am proud to be an American. I am grateful for those who gave their lives for us… and I will continue to ask God to bless America.
Unfortunately, scams continue to be on the rise and there are no red flashing lights that precede a scam – but if you pay attention, there are clues that you are seeing a scam.
To help recognize scams, the IRS puts out a Dirty Dozen Scam Alert each year. Following are some highlights from their 2021 Dirty Dozen.
Telephone calls, text messages or emails are used by identity thieves to convince the person that they need to provide Social Security numbers, bank account or credit card information or passwords. Often, criminals pose as someone the person knows. NEVER, EVER give personal information over the phone.
Phishing scams can be tricky and cleverly disguised to look like they are coming from the IRS or someone the person knows. They may promise a big refund, a missing stimulus payment or even a tax threat. NEVER click on or open attachments or links in these emails.
Always look at the complete address. We received an email from Kat Meissner; but the email address was kat@optimu.com – clearly not me!
If you receive a phone call out of the blue, security experts recommend asking questions of the caller such as, who is your supervisor, what office are you located out of, what is your ID#; but do not give them any information. We recommend you simply hang up – immediately!
Social media scams are also on the rise as the cons may send emails, messages, etc. impersonating the victim’s family, friends and co-workers.
ALL OF YOUR INFORMATION that is on social media platforms can be collected and used against you! One way to prevent these scams is to review your privacy settings often and limit what is publicly shared.
If you do click on something and strange things start to show up on your computer screen, take a picture of the screen with your phone and unplug the computer immediately. Do not turn it back on until you’ve taken it to an IT person to scan and remove any viruses.
