Archive for July, 2011


On September 27, 2010, the President Obama passed The Small Business Jobs Act of 2010.  The act consists of some important tax provisions that encourage investment and increase capital for a small business to drive economic recovery.  These provisions mentioned below are extended through January 1, 2012:

  • According to the act, the investors who invest their money into certain small businesses can exclude up to 100% of capital gain from selling the stock.
  • Eligible small businesses are now allowed to carry back general business credits five years instead of the previously established law for one year.
  • Those businesses which treat the cost of certain property as an expense rather than a capital expenditure will be eligible for expense deduction.
  • When calculating self-employment tax, some small business owners can deduct the cost of health insurance for themselves and their family.

The Small Business Jobs Act of 2010 gives small business owners an opportunity to utilize the deductions and help grow their businesses.  Along with numerous deductions, the act also increases the maximum amount for SBA loan programs from $2 million to $5 million.  Moreover, small business investors do not have to worry about paying taxes on up to 100% of the capital gain.

Take the advantage of the SBA 2010 today!! To know what deductions your business is eligible for, contact Garden State Payroll at 732-353-6803 or email us at info@gardenstatepayroll.com

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Garden State Payroll (GSP Inc.)- provides the ability to download your payroll reports and files directly into your General Ledger or Excel File. In addition, the Information from the reports can be manipulated and downloaded in different formats for special reporting needs. Also, these reports can be downloaded into Excel or PDF Files. GSP also provides Electronic Reports that are emailable and can be burned on CD Roms…

  • Direct Downloads to GL
  • Email your CPA the Payroll Reports
  • Special Reports
  • CD Rom Payroll Reports

 The question of whether you are an employee or a self-employed independent contractor is very important and may not always be easy to answer. You should understand the category you fall under, since it’ll affect how you pay your taxes.

You are an employee if

Your payer has the right to direct and control your activity. The factors of control fall into three key categories:

  1. Behavioral control
  2. Financial control, and
  3. The relationship between you and your payer.

No one single fact determines worker classification, rather all of the facts and circumstances of a relationship weigh in the correct worker classification determination.

If you are an employee, you are required to report the wages you received during the calendar year on your personal income tax return because they are taxable income. Your employer is required to report wages paid to you during the year on a Form W-2. Your employer is also required to ask you to fill out a Form W-4 and you are required to return that form to your employer. Form W-4 directs your employer on how much tax to withhold from your pay. If you are unsure how much to request be withheld on your Form W-4, check the IRS Withholding Calculator for guidance.

You are an independent contractor if

You have the right to direct and control the most important aspects of your activity. People such as contractors, subcontractors and auctioneers, who maintain an independent trade, business or profession in which they offer their services to the public, are generally independent contractors.

If you are an independent contractor, your income earned will be reported to you by the payer on a Form 1099-MISC, unless the payer pays you less than $600 in the calendar year. However, you must report all the income you earned during the year, even if your client does not issue a Form 1099-MISC for your services.

As an independent contractor you are self-employed and are generally required to attach a business return to the annual income tax return that you file and to pay estimated tax quarterly. Self-employed individuals generally have to pay self-employment tax (Social Security and Medicare tax) as well as income tax. To read more on your tax obligations or for more information on estimated tax, go to the Self-Employed Individuals Tax Center on IRS.gov.

If your worker status is unclear

You or your payer can file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS to help determine your status.

Additionally, The IRS developed Form 8919, Uncollected Social Security and Medicare Tax on Wages, to simplify the process for employees to report their share of uncollected Social Security and Medicare taxes due on their compensation when their employers have misclassified them as independent contractors.

Lower Your Unemployment Rate Today!!

State labor law posters and federal labor law posters have been changing more frequently than ever because there has been so much legislative activity in the employment area in the past few years—and this trend is continuing.

Among the labor law topics that are getting the most attention right now on compliance posters are wage and hour regulations, family leave, sick leave, discrimination, child labor and occupational health and safety.

The numerous state minimum wage laws that passed across the country prior to the 2007 federal minimum wage increase are an example of these changes.

Ten states now have minimum wage rates that adjust annually (Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington).

A common misconception about compliance posters is that they only change at the first of the year.  Although there are usually more state changes in January because of laws that go into effect then, state labor law posters can change at any time.

Each state has its own posting requirements, and these are found in the individual labor laws.  (Poster requirements for federal labor law posters are also found in the federal laws.)  Some states—like California, Louisiana and New Jersey—require 10 or more state posters while others require as few as two.

Posters are required most often by states are wage and hour regulations, family leave law, sick leave regulations, health and safety, child labor, unemployment, workers’ compensation and discrimination.

When a new state or federal labor law passes, it does not mean a new poster is automatically required or even that an existing poster will be amended.  This is because not all laws include a posting requirement.

If there is a new poster requirement, the poster may be delayed while final regulations are drafted to carry out the law, hearings are held for public comment or the issuing agency determines the content and wording to use on the posters

FICA Tip Credit is a credit for Employer Social Security Paid with respect to Employee’s Cash Tips. Only an employer in food or beverage industry, where the employees are getting tips, is applicable to receive the credit. If you paid Social Security and Medicare taxes on these tips, then you
deserve the tip credit based on how much tax you paid on those tips.

This FICA Tip Credit can be hundreds of dollars depending on the size of the company and how many employees you have.  Your business is eligible to receive credit for any Social Security and Medicare taxes it pays beyond the federal minimum page.  In other words, no credit is given for tips used to meet the federal minimum hourly wage rate.

To receive more information or to know about how to get the FICA Tip Credit, contact Garden State Payroll at info@gardenstatepayroll.com or
give us a call at 877-898-0415

New regulations require all paid tax return preparers to obtain a PTIN. Renewals
for 2012 are expected to start in October 2011. In the future, some preparers
will need to pass a competency test and background check, and take continuing
education courses. For more information, see http://www.irs.gov/taxpros/article/0,,id=210909,00.html