IRS statement on Dec. 26, 2018

"The IRS is working to develop withholding guidance to implement the tax reform bill signed into law on December 22.  We anticipate issuing the initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February. The IRS emphasizes this information will be designed to work with the existing Forms W-4 that employees have already filed, and no further action by taxpayers is needed at this time. 
 
Use of the new 2018 withholding guidelines will allow taxpayers to begin seeing the changes in their paychecks as early as February.  In the meantime, employers and payroll service providers should continue to use the existing 2017 withholding tables and systems".

Source: https://www.irs.gov/newsroom/irs-statement-withholding-for-2018

According to this IRS statement, employers can continue to use the current 2017 federal tax rate for 2018 paychecks right now. However, many states released the new 2018 state tax tables. Employers need to use the new 2018 state tax tables for 2018 paychecks.

ezPaycheck payroll software clients and ezAccounting software clients can update software to use the latest 2018 state tax tables for 2018 payroll. 

How to update ezPaycheck payroll software

How to update ezAccounting software

EzPaycheck 2017 payroll software speeds up and simplifies payroll tax calculation, paycheck printing and tax reporting for small businesses. However if you like to calculate the taxes manually, you can find the step by step guide below

Karen is married, with 1 allowance. Her salary rate is $39000. She gets one pay check each month.

1. Her gross income for each paycheck is $3250

39000/12=$3250

2. Her standard deduction for each paycheck is $337.5

Year 2017 Standard Deduction is $4050

For each paycheck: 4050/12=$337.5

3. Her taxable income for each paycheck is:

3250-337.5=$2912.5

4. Federal tax

Check Monthly tax table for married person

http://www.halfpricesoft.com/federal_income_tax_2017.asp

155.40 + 15% x (2912.5-2275.00)=$251.02

Table 4 -- Monthly Payroll Period

Related Links

How to Calculate Federal Withholding Tax Automatically

http://www.halfpricesoft.com/payroll-software/calculate-federal-withholding-tax.asp

How to Generate After the Fact Paychecks and Create the Paystubs

http://www.halfpricesoft.com/payroll-software/after-fact-payroll-checks.asp

How to Print W2 Forms on White Paper

http://www.halfpricesoft.com/w2-software/print-w2-forms-blank-paper.asp

How to Print 1099 Forms

http://www.halfpricesoft.com/1099-misc-software/howto-file-print-1099-misc-forms.asp

Employment Tax Due Dates
http://www.halfpricesoft.com/employment_tax_due_dates.asp

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

If you have completed 2016 paychecks, you can use ezPaycheck 2017 to print W2 and 940 forms. You do not need to roll back to the previous version.

If you have NOT completed 2016 paychecks, you can try the following steps to roll back to ezPaycheck 2015 version.

Steps to roll back to ezPaycheck 2016 version:

Step 1: Backup data

Your data should be safe during this process. However, we always suggest customers backup data first.

If you cannot use ezPaycheck backup function, you can back up the data manually. The default data folder is
C:\Users\Public\Documents\Halfpricesoft\ezPayCheck 

You can back up this folder or just the .mdb files (Microsoft Access Database files) inside this folder

Step 2:  Uninstall ezPaycheck 2017 

Step 3:  Download ezPaycheck 2016 Payroll Software

http://www.halfpricesoft.com/payroll_software_download_2016.asp

After you finish 2016 paychecks, you can download the latest version ezPaycheck payroll software and purchase the new key at

http://www.halfpricesoft.com/index.asp#purchase

ezPaycheck 2017 installation package will update ezPaycheck tax tables. You should run it after you finished the paychecks for Year 2016. With ezPaycheck 2017, you can still access your 2016 paychecks, view reports and print 2016 W2 forms. 

If you still have questions, you can reach us for support at

http://www.halfpricesoft.com/support.asp

EzPaycheck 2016 payroll software speeds up and simplifies payroll tax calculation, paycheck printing and tax reporting for small businesses. However if you like to calculate the taxes manually, you can find the step by step guide below

Karen is married, with 1 allowance. Her salary rate is $39000. She gets one pay check each month.

1. Her gross income for each paycheck is $3250

39000/12=$3250

2. Her standard deduction for each paycheck is $337.5

Year 2016 Standard Deduction is $4050

For each paycheck: 4050/12=$337.5

3. Her taxable income for each paycheck is:

3250-337.5=$2912.5

4. Federal tax

Check Monthly tax table for married person

http://www.halfpricesoft.com/federal_income_tax_2016.asp

154.5 + 15% x (2912.5-2258)=$252.68

able 4 -- Monthly Payroll Period

Related Links

How to Calculate Federal Withholding Tax Automatically

http://www.halfpricesoft.com/payroll-software/calculate-federal-withholding-tax.asp

How to Generate After the Fact Paychecks and Create the Paystubs

http://www.halfpricesoft.com/payroll-software/after-fact-payroll-checks.asp

How to Print W2 Forms on White Paper

http://www.halfpricesoft.com/w2-software/print-w2-forms-blank-paper.asp

How to Print 1099 Forms

http://www.halfpricesoft.com/1099-misc-software/howto-file-print-1099-misc-forms.asp

Employment Tax Due Dates
http://www.halfpricesoft.com/employment_tax_due_dates.asp

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

IRS released the new form 940 for 2015 year-end report. ezPaycheck software new version has been released. Current customers can download the new version for free at ezPaycheck download page at

http://www.halfpricesoft.com/payroll_software_download.asp

If you have finished 2015 paychecks, you can use ezPaycheck 2016 to print W2 and 940 forms. You do not need to roll back to the previous version.

If you have NOT finished 2015 paychecks, you can try the following steps to roll back to ezPaycheck 2015 version.

Steps to roll back to ezPaycheck 2015 version:

Step 1: Backup data

Your data should be safe during this process. However, we always suggest customers backup data first.

If you cannot use ezPaycheck backup function, you can back up the data manually. The default data folder is
C:\Users\Public\Documents\Halfpricesoft\ezPayCheck 

You can back up this folder or just the .mdb files (Microsoft Access Database files) inside this folder

Step 2:  Uninstall ezPaycheck 2016 

Step 3:  Download ezPaycheck 2015 Payroll Software

http://www.halfpricesoft.com/payroll_software_download.asp 

After you finish 2015 paychecks, you can download the latest version ezPaycheck payroll software and purchase the new key at

http://www.halfpricesoft.com/index.asp#purchase

ezPaycheck 2016 installation package will update ezPaycheck tax tables. You should run it after you finished the paychecks for Year 2015. With ezPaycheck 2016, you can still access your 2015 paychecks, view reports and print 2015 W2 forms. 

If you still have questions, you can reach us for support at

http://www.halfpricesoft.com/support.asp

Usually employers need to withhold Social Security tax from employees’ paychecks. The Social Security tax is a payroll tax that was started by the United States Government in the 1930s. This tax is imposed upon working people and their employers.

The 2015 tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The maximum wage that is subject to the tax for year 2015 is $118,500.

Refer to Publication 15, (Circular E), Employer's Tax Guide, for more information; or Publication 51, (Circular A), Agricultural Employer’s Tax Guide, for agricultural employers.

Both ezPaycheck payroll software and ezAccounting software can calculate Soecial Security tax and other payroll taxes automatically based on current tax table. 

EzPaycheck 2015 payroll software speeds up and simplifies payroll tax calculation, paycheck printing and tax reporting for small businesses. However if you like to calculate the taxes manually, you can find the step by step guide below

Example 1:

Kevin is single with zero allowance. He is paid $240 per week.

1. His gross pay for each paycheck is $240

2. His standard deduction for each paycheck is $0

3. His taxable income for each paycheck is $240

4. Federal Tax

17.8 + (240-222)*15%=17.8+18*15%=17.8+2.7=$20.5

Current Federal Income Withholding Tax table
http://www.halfpricesoft.com/federal_income_tax_2015.asp

Table 1 -- Weekly Payroll Period

Example 2:

Karen is the employee of company ABC. She lives in Arizona. Her withholding rate is single/withhold at a single rate.  She has two allowances and no extra withholds.  She gets paid $10 per hour biweekly.  She works 64 hours for each biweekly pay period.

Followings are the steps to calculate the federal tax:
 

1. Gross pay for each paycheck: 
 
For each pay period, the gross pay is $640
 
2. Deduction for each paycheck:
The standard deduction is $4,000 per year (For Year 2015).
She can get total $4000*2=$8000
For each pay period the deduction is: $8000/26=$307.69

 
3. Taxable income for each paycheck
So for each paycheck, the taxable income is: 640-307.69=$332.31
 
4. Federal tax 
(332.31-88.00) * 10%=244.31*10%=$24.43

Current Federal Income Withholding Tax table
http://www.halfpricesoft.com/federal_income_tax_2015.asp

Table 2 -- Biweekly Payroll Period

Related Links

How to Calculate Federal Withholding Tax Automatically

http://www.halfpricesoft.com/payroll-software/calculate-federal-withholding-tax.asp

How to Generate After the Fact Paychecks and Create the Paystubs

http://www.halfpricesoft.com/payroll-software/after-fact-payroll-checks.asp

How to Print W2 Forms on White Paper

http://www.halfpricesoft.com/w2-software/print-w2-forms-blank-paper.asp

How to Print 1099 Forms

http://www.halfpricesoft.com/1099-misc-software/howto-file-print-1099-misc-forms.asp

Employment Tax Due Dates
http://www.halfpricesoft.com/employment_tax_due_dates.asp

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

If you have finished 2014 paychecks, you can use ezPaycheck 2015 to print W2 and 940 forms. You do not need to roll back to the previous version.

If you have NOT finished 2014 paychecks, you can try the following steps to roll back to ezPaycheck 2014 version.

Steps to roll back to ezPaycheck 2014 version:

Step 1: Backup data

Your data should be safe during this process. However, we always suggest customers backup data first.

If you cannot use ezPaycheck backup function, you can back up the data manually. The default data folder is
C:\Users\Public\Documents\Halfpricesoft\ezPayCheck 

You can back up this folder or just the .mdb files (Microsoft Access Database files) inside this folder

Step 2:  Uninstall ezPaycheck 2015 

Step 3:  Download ezPaycheck 2014 Payroll Software

http://www.halfpricesoft.com/payroll_software_download.asp 

After you finish 2014 paychecks, you can download the latest version ezPaycheck payroll software and purchase the new key at

http://www.halfpricesoft.com/index.asp#purchase

ezPaycheck 2015 installation package will update ezPaycheck tax tables. You should run it after you finished the paychecks for Year 2014. With ezPaycheck 2015, you can still access your 2014 paychecks, view reports and print 2014 W2 forms. 

If you still have questions, you can reach us for support at

http://www.halfpricesoft.com/support.asp

IRS published Notice 1036, Early Release Copies of the 2015 Percentage Method Tables for Income Tax Withholding. Here are some majors changes an employer should know for Year 2015 payroll processing.

Social Security and Medicare Tax for 2015

- For social security, the tax rate is 6.2% each for the employee and employer, unchanged from 2014.
- The social security wage base limit is $118,500, and it was $117,000.00 in Year 2014
 
- The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2014. There is no wage base limit for Medicare tax.

The new standard deduction for each dependent is $4000.00, which was $3950.00 in 2014.

You can view 2015 Payroll Income Tax Withhold Tables here to see tax brackets changes and more details. 

IRS has published the new 2015 tax tables. We will updated ezPaycheck payroll software for small businesses with the latest tax rate.  ezPaycheck 2015 will be availale to download around Dec 15, 2014. The new ezPaycheck 2015 single user version will be $89 per calendar year.

New customers that wants to start computerized payroll are welcome to check the current special promotion of ezPaycheck 2014 & 2015 Combo. Customers can get ezPaycheck 2015 at just $10 if you purchase ezPaycheck 2014 at $89.

Buy ezPaycheck 2014 payroll software at regular price $89 and get ezPaycheck 2015 version at just $10!

EzPaycheck payroll software speeds up paycheck processing. It can also generates and prints Form 941. You can use Form 941 to report the following amounts.

·         Wages you have paid.

·         Tips your employees have received.

·         Federal income tax you withheld.

·         Both the employer's and the employee's share of social security and Medicare taxes.

·         Additional Medicare Tax withheld from employees.

·         Current quarter's adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance.

Your Form 941 is due by the last day of the month that follows the end of the quarter.

Where you file depends on whether you include a payment with Form 941

More information about form 941 can be found at
http://www.irs.gov/pub/irs-pdf/i941.pdf

Wisconsin income tax rate changed on April 1, 2014.

“We’re going to start taking less out of your paycheck for withholding,” Gov. Walker said.

Halfpricesoft.com has released the new edition of ezPaycheck payroll software with the new Wisconsin state tax tables. Current ezPaycheck 2014 customers can download the 2014 update package for free at

http://www.halfpricesoft.com/payroll_software_update_2014.asp

EzPaycheck small business payroll software saves employers' time by simplifying payroll tax calculation, paycheck printing and tax reporting. However if you like to calculate the taxes manually, you can find the step by step guide below

For example:

Karen is the employee of company ABC. She lives in Arizona. Her withholding rate is single/withhold at a single rate.  She has two allowances and no extra withholds.  She gets paid $10 per hour biweekly.  She works 64 hours for each biweekly pay period.

Followings are the steps to calculate the federal tax:
 

1. Gross pay for each paycheck: 
 
For each pay period, the gross pay is $640
 
2. Deduction for each paycheck:
The standard deduction is $3,950 per year (For Year 2014).
She can get total $3950*2=$7900
For each pay period the deduction is: $7900/26=$303.85

 
3. Taxable income for each paycheck
So for each paycheck, the taxable income is: 640-303.85=$336.15
 
4. Federal tax 
(336.15-87.00) * 10%=249.15*10%=$24.92

Current Federal Income Withholding Tax table
http://www.halfpricesoft.com/federal_income_tax_2014.asp

Table 2 -- Biweekly Payroll Period

Related Links

How to Calculate Federal Withholding Tax Automatically

http://www.halfpricesoft.com/payroll-software/calculate-federal-withholding-tax.asp

How to Generate After the Fact Paychecks and Create the Paystubs

http://www.halfpricesoft.com/payroll-software/after-fact-payroll-checks.asp

How to Print W2 Forms on White Paper

http://www.halfpricesoft.com/w2-software/print-w2-forms-blank-paper.asp

How to Print 1099 Forms

http://www.halfpricesoft.com/1099-misc-software/howto-file-print-1099-misc-forms.asp

Employment Tax Due Dates
http://www.halfpricesoft.com/employment_tax_due_dates.asp

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

We have released the new edition of ezPaycheck payroll software to implement the latest Ohio state tax rate cuts.

According to Ohio Department of Taxation, House Bill 59 (H.B. 59) cuts individual income tax rates 10% or $3 billion over the next three years. The new Employer Withholding Tables take effect on September 1. This bill cuts tax rates by 9.0% (includes 8.5% cut in 2013 and 0.5% cut in 2014). Employers should start the new tax rate as soon as possible to reduce employees’ withholding

Current 2013 payroll software customers can dowload the latest update package for free at
http://www.halfpricesoft.com/payroll_software_update_2013.asp

Learn more about Ohio Payroll at
http://www.halfpricesoft.com/ohio-payroll-software.asp

Editing a paycheck may cause tax calculation problem. So we removed this feature from ezPaycheck Payroll Software many years ago.

- If you need to change MEMO part on paycheck only
You can click the check from check list, then click "VIEW" button. You can add/edit MEMO there.

- If you need to change other information on paycheck, you need to delete this check and generate it again.
You can reset the current check number by clicking the left menu "checks->check setup". Then change the current check number if you need to reuse the same check number.

IRS increases Social Security Tax to 6.2% for employees. EzPaycheck 2013 payroll software has been updated to implement this change and other tax rate changes.

2013 Income Tax Tables here: http://www.halfpricesoft.com/federal_income_tax_2013.asp

What is new for 2013 Income Taxes:  http://halfpricesoft.com/business-blog/post/2013/01/01/What-Is-New-of-2013-Payroll-Tax-Rate.aspx

1.       How to download ezPaycheck 2013

            If you are a new user, you can download ezPaycheck 2013 at

http://www.halfpricesoft.com/payroll_software_download.asp

If you are ezPaycheck 2012 users, we would like to suggest you to back up your database first then download ezPaycheck 2013 update package at

http://www.halfpricesoft.com/payroll_software_update_2013.asp

2.       I downloaded version 3.3.3 to generate the first check. Then I updated  ezPaycheck to the latest version to generate the second check. Why the net pay and taxes on the second check are different from the first check

IRS published new tax rate on Jan 3 2013 which overwrite the tax rate published on Dec 31, 2012.

Version 3.3.6 use the tax rate published on Jan 3, 2013

Version 3.3.5 and earlier use tax rate published on Dec 31, 2012

3.       Why I need to update ezPaycheck 2012 to ezPaycheck 2013?

EzPaycheck 2012 comes with 2012 tax tables. If you need to handle payroll in Year 2013, you should use Year 2013 income tax rate. You can find Year 2013 tax rate change there

Social Security Tax increases to 6.2% for employees. IRS asks employers to start using the new social security rate as soon as possible in Year 2013 but not later than Feb 15, 2013.

You can get more information about income tax change here

http://halfpricesoft.com/business-blog/post/2013/01/01/What-Is-New-of-2013-Payroll-Tax-Rate.aspx

4.       How will I know my current version?

You can click the ezPaycheck top menu “Help->About ezPaycheck”

5.       How can I know a new version is available?

We will inform you by email when a new version is available. You can also check the latest version yourself by clicking the ezPaycheck top menu “help->Check for updates”.

6.       I have not finished my 2012 payroll, should I download ezPaycheck 2013 update package now?

You should finish your 2012 paychecks first because you should use 2012 income tax rate for year 2012 paychecks.

 You can print W-2 forms later. EzPaycheck 2013 can print Year 2012 W-2 Forms.

7.       After I installed ezPaycheck 2013, I still see 2011 940 Form. Is it correct?

IRS has not published Year 2012 940 form yet. We will release a new version once this form is available. Current ezPaycheck 2013 users can get this update package for free.

8.       After I installed ezPaycheck 2013, I still see 2012 941 Form. Is it correct?

IRS has not published Year 2013 941 form yet. We will release a new version once this form is available. Current ezPaycheck 2013 users can get this update package for free.

9.       Is my payroll data safe when I run ezPaycheck 2013 update package? Will it transfer my 2012 data to ezPaycheck 2013?

Your data should be safe. However, we still like to suggest you always backup your data first. When ezPaycheck 2012 users run ezPaycheck 2013 update package, it should transfer all the data to ezPaycheck 2013 automatically. However if your machine has higher security settings, ezPaycheck may not be able to transfer the data automatically.

What Is Social Security Tax

The Social Security tax is a payroll tax that was started by the United States Government in the 1930s. This tax is imposed upon working people and their employers.

What Is New In Year 2013

For 2013, the employee tax rate for social security increases to 6.2%. The social security wage base limit increases to $113,700. The employer tax rate for social security is still 6.2%.

Employers should implement the 6.2% employee social security tax rate as soon as possible, but not later than February 15, 2013. After implementing the new 6.2% rate, employers should make an adjustment in a subsequent pay period to correct any underwithholding of social security tax as soon as possible, but not later than March 31, 2013.

We have updated ezPaycheck 2013 Payroll Software to implement this Social Security Tax Increase.  You are welcome to download and try ezPaycheck payroll software free for 30 days with no obligation and no credit card needed.

Related Links

·      What Is New of 2013 Payroll Tax Rate

http://www.halfpricesoft.com/business-blog/post/2013/01/01/What-Is-New-of-2013-Payroll-Tax-Rate.aspx

·         2013 Income Tax Table

http://www.halfpricesoft.com/federal_income_tax_2013.asp

·         Small Business Payroll Software Solution

http://www.halfpricesoft.com/index.asp

A fringe benefit is a form of pay (including property, services, cash or cash equivalent) in addition to stated pay for the performance of services. Some forms of additional compensation are specifically designated as “fringe benefits” in the Internal Revenue Code.

Fringe benefits commonly include health insurance, group term life coverage, education reimbursement, childcare and assistance reimbursement and cafeteria plans. Fringe benefits for employees are taxable wages unless specifically excluded by a section of the Internal Revenue Code (IRC).

The IRC may provide that fringe benefits are nontaxable, partially taxable, or tax-deferred.

Taxable – Includible in gross income unless excluded under an IRC section. “Taxable” means the benefit is included in the employees' wages and reported on Form W-2, Wage and Tax Statement, and generally is subject to Federal income tax withholding, social security (unless the employee has already reached the current year social security wage base limit), and Medicare. If the recipient is an employee, this amount is includible as wages. For example, bonuses are always taxable because no IRC section excludes them from taxation

.

Nontaxable (excludable) – Excluded from wages by a specific IRC section; for example, qualified health plan benefits excludable under section 105.

Partially taxable - Part is excluded by IRC section and part is taxable. Benefits may be excludable up to dollar limits, such as the public transportation subsidy under IRC §132.

Tax-deferred – Benefit is not taxable when received, but subject to tax later. For example, employer contributions to an employee's pension plan may not be taxable when made, but may be taxed when distributed to the employee.

(Source: http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf)

ezPaycheck small business payroll software can handle fringe benefits. It comes with default settings for health Insurance and 401K. Users can also add customized deduction fields to handle taxable or non-taxable fringe benefits easily. Learn more at
http://www.halfpricesoft.com/business-blog/post/2011/05/05/How-to-add-a-new-payroll-deduction.aspx

More information about ezPaycheck payroll software can be found at product page.

Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. IRS required that employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012.

Following are the instructions from Notice 1036

The employee tax rate for social security is 4.2% on wages paid and tips received before March 1, 2012. The employee tax rate for social security increases to 6.2% on wages paid and tips received after February 29, 2012. The employer tax rate for social security remains unchanged at 6.2%. The social security wage base limit is $110,100. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2011. There is no wage base limit for Medicare tax.

Employers should implement the 4.2% employee social security tax rate as soon as possible, but not later than January 31, 2012. After implementing the 4.2% rate, employers should make an offsetting adjustment in a subsequent pay period to correct any overwithholding of social security tax as soon as possible, but not later than March 31, 2012.

EzPayCheck payroll software already included this change in its 2012 version.

If you are a small business owners and like to calculate the taxes manually. Please follow this step by step guide on how to use federal tax table and do it manually.

For example:

Karen is the employee of company ABC. She lives in Arizona. Her withholding rate is married/withhold at a single rate.  She has two exemptions and no extra withholds.  She gets paid $10 per hour biweekly.  She works 64 hours for each pay period.

Followings are the steps to calculate the federal tax:
 

1. Gross pay for each paycheck:
 
For each pay period, the gross pay is $640
 
2. Deduction for each paycheck:
The standard deduction is $3,800 per year (For Year 2012).
She can get total $3800*2=$7600
For each pay period the deduction is: $7600/26=$292.31

 
3. Taxable income for each paycheck
So for each paycheck, the taxable income is: 640-292.31=$347.69
 
4. Federal tax
(347.69-83.00) * 10%=264.69*10%=$26.47

Current Federal Income Withholding Tax table
http://www.halfpricesoft.com/federal_income_tax_2012.asp

Table 2 -- Biweekly Payroll Period

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

The Social Security tax is a payroll tax that was started by the United States Government in the 1930s. This tax is imposed upon working people and their employers.

For 2011, the maximum taxable earnings amount for Social Security is $106,800. The Social Security tax (OASDI) rate for wages paid in 2011 is 4.2 percent for employees and 6.2 percent for employers. 

For example, an individual with wages equal to or more than $106,800 would contribute $4,485.60 to Social Security in 2011.  The employer would contribute $6,621.60.

Related Link:

Federal Income tax Table

http://www.halfpricesoft.com/federal_income_tax_2011.asp

The Social Security Administration has released the proposed figures for the increase in the wage base for taxation for 2012 and projected some figures for the years up to 2015.

The Social Security wage base, now at $106,800, is projected to increase to $110,700 in 2012, according to the annual report of the Social Security Board of Trustees. Also – in 2012, the temporary 2% reduction in the Social Security withholding tax will expire.

This will increase the social security tax paid by high wage earners from $4,485.60 (in Year 2011) to $6,863 (in Year 2012).

Future wage bases have been projected for the years up to 2015 as well:  for 2013, the base is projected at $113,100; for 2014, $117,600; and for 2015, $122,700.

Related link:

Current federal income tax table:

http://www.halfpricesoft.com/federal_income_tax_2011.asp

Some small business owners are still calculating the taxes manually. Following is the step by step guide on how to use federal tax table and do it manually.

For example:

Karen is the employee of company ABC. She lives in Arizona. Her withholding rate is married/withhold at a single rate.  She has two exemptions and no extra withholds.  She gets paid $10 per hour biweekly.  She works 64 hours for each pay period.

Followings are the steps to calculate the federal tax:
 

1. Gross pay for each paycheck:
 
For each pay period, the gross pay is $640
 
2. Deduction for each paycheck:
The standard deduction is $3700 per year (For Year 2011).
She can get total $3700*2=$7400
For each pay period the deduction is: $7400/26=$284.62
 
3. Taxable income for each paycheck
So for each paycheck, the taxable income is: 640-284.62=$355.38
 
4. Federal tax
(355.38-81.00) * 10%=274.38*10%=$27.44

Current Federal Income Withholding Tax table
http://www.halfpricesoft.com/federal_income_tax_2011.asp

Table 2 -- Biweekly Payroll Period

EzPaycheck payroll software is designed to automate paycheck processes to reduce the time spent on running payroll. The software’s graphic interface leads users step-by-step through setting up employee information, importing data, calculating payroll—including calculation of federal, state and local taxes; deductions for Medicare, insurance and 401(k) plans; and printing paychecks.

Priced at just $89 per installation, ezPaycheck’s graphical interface and functions are so intuitive that even users without much computer or accounting experience can start automating payroll processes within minutes of installation. Additionally, customers can try ezPaycheck payroll software without cost or obligation for 30 days.

ezPaycheck payroll software is very flexible. User can set up pre-tax deduction or after-tax deduction easily.

ezPaycheck payroll software is very flexible. User can set up pre-tax deduction or after-tax deduction easily.

·         If you need to add a customize deduction, you can refer to the following article. You can select the tax option from the Deduction Details screen.

http://www.halfpricesoft.com/business-blog/post/2011/05/05/How-to-add-a-new-payroll-deduction.aspx

·         For built-in deductions (Health Insurance or 401K), you can change the tax options by following the steps below.

1. Click the left menu "Company Settings->Deductions" to open "Company Deduction Setup" screen.

2. Click the button behind 401K or Health Insurance to open "Deduction Details" screen.

3. Check/Uncheck tax options

4. Click the Save button to update changes for the deduction details.

5. Click the Save button to update changes for company deduction setup.

More information about ezPaycheck payroll software can be found at product page.

Followings are the main changes:

1) For Year 2011, the employee tax rate for social security is reduced to 4.2%. The employer tax rate for social security remains unchanged at 6.2%. (IRS asks that employers start using the new social security rate as soon as possible but not later than January 31, 2011.)

2) Federal payroll tax table changed

Click here to compare Year 2011 Federal tax tables and Year 2010 Federal tax tables

3) State table changed

IL, CO, HI, IN,ME, MD, MN, MO, NM, ND, OK, RI, VT published the new state tax tables.

When To File Form 941, Employer's Quarterly Federal Tax Form

Your Form 941 is due by the last day of the month that follows the end of the quarter.

1. First Quarter:  January, February, March 

Quarter Ends: March 31

Form 941 is due: April 30

2. Second Quarter:  April, May, June 

Quarter Ends: June 30

Form 941 is due: July 31

3. Third Quarter:  July, August, September

Quarter Ends: September 30

Form 941 is due: October 31

4. Fourth Quarter:  October, November, December

Quarter Ends: December 31

Form 941 is due: January 31

Form 941 (Year 2011) - Employer’s QUARTERLY Federal Tax Return

What’s New

Social security and Medicare tax for 2011.  The employee tax rate for social security is 4.2%. The employer tax rate for social security remains unchanged at 6.2%. The Medicare tax rate is 1.45% each for employers and employees.

Do not withhold or pay social security tax after an employee reaches $106,800 in social security wages for the year. There is no limit on the amount of wages subject to Medicare tax.

Section 3121(q) Notice and Demand - Tax due on unreported tips.  A new line has been added to Form 941 for reporting social security and Medicare taxes on unreported tips. An employer now reports the amount of the taxes shown on the Section 3121(q) Notice and Demand on line 5e of the employer’s Form 941 for the calendar quarter in which notice and demand is made. Previously, a section 3121(q) liability was reported on the line for “Current quarter’s adjustments for tips and group-term life insurance.”

Qualified employer’s social security tax exemption expired.  The qualified employer’s exemption for their share (6.2%) of social security tax on wages/tips paid to qualified employees expired on December 31, 2010.

COBRA premium assistance credit.  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. See COBRA Premium Assistance Payments on page 7.

Advance payment of earned income credit (EIC).  The option of receiving advance payroll payments of EIC is no longer available after December 31, 2010. Individuals eligible for EIC in 2011 can still claim the credit when they file their federal income tax return. Individuals who received advance payments of EIC in 2010 must file a 2010 federal income tax return.

Federal tax deposits must be made by electronic funds transfer. Beginning January 1, 2011, you must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010. Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. EFTPS is a free service provided by the Department of Treasury. Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee.

For more information on making federal tax deposits, see section 11 of Pub. 15 (Circular E), Employer’s Tax Guide (for use in 2011). To get more information about EFTPS or to enroll in EFTPS, visit www.eftps.gov or call 1-800-555-4477. Additional information about EFTPS is also available in Publication 966, The Secure Way to Pay Your Federal Taxes.

Resources:

Form 941 Instructions
http://www.irs.gov/pub/irs-pdf/i941.pdf

publication 15
http://www.irs.gov/pub/irs-pdf/p15.pdf

Basic Information about Form 941

http://www.halfpricesoft.com/business-blog/post/2011/03/14/Form-941-Employers-Quarterly-Federal-Tax-Form.aspx

Halfpricesoft has released the new version of ezPaycheck payroll software on latest 941 form (Year 2011).  ezPaycheck is the easy-to-use and affordable payroll software for small business and non-accountants. ezPaycheck calculates payroll taxes automatically and supports check printing feature, forms 941, 940, W2 and W3.

To learn more about ezPaycheck, please visit: http://www.halfpricesoft.com/index.asp

Or check the video ezPaycheck Made Your Payroll an Easy Job
http://www.youtube.com/watch?v=JISurtSXoZ0

Following is the basic information about Form 941 - Employer's Quarterly Federal Tax Form. More information can be found from IRS site.

What is form 941:

Form 941- Employer's Quarterly Federal Tax Form is the form used by employers to report employment taxes , withholding amounts, deposit amounts, and amounts due to the IRS. 

Who Must File Form 941?

Use Form 941 to report the following amounts.

·         Wages you have paid.

·         Tips your employees have received.

·         Federal income tax you withheld.

·         Both the employer's and the employee's share of social security and Medicare taxes.

·         Current quarter's adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance.

·         Advance earned income credit (EIC) payments.

·         Credit for COBRA premium assistance payments.

·         Exemption for qualified employer's share of social security tax on wages/tips paid to qualified employees.

Do not use the Form 941 to report backup withholding or income tax withholding on nonpayroll payments such as pensions, annuities, and gambling winnings. Report these types of withholding on Form 945, Annual Return of Withheld Federal Income Tax.

After you file your first Form 941, you must file a return for each quarter, even if you have no taxes to report, unless you filed a final return or one of the exceptions listed below applies.

Exceptions

Special rules apply to some employers.

• Seasonal employers do not have to file a Form 941 for quarters in which they have no tax liability because they have paid no wages. To tell the IRS that you will not file a return for one or more quarters during the year, check the box on line 19 every quarter you file Form 941. See section 12 of Pub. 15 (Circular E) for more information.
• Employers of household employees do not usually file Form 941. See Pub. 926, Household Employer's Tax Guide, and Schedule H (Form 1040), Household Employment Taxes, for more information. 
• Employers of farm employees do not usually file Form 941. See Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and Pub. 51 (Circular A), Agricultural Employer's Tax Guide.

When To File Form 941

Your Form 941 is due by the last day of the month that follows the end of the quarter.

1. First Quarter:  January, February, March 

Quarter Ends: March 31

Form 941 is due: April 30

2. Second Quarter:  April, May, June 

Quarter Ends: June 30

Form 941 is due: July 31

3. Third Quarter:  July, August, September

Quarter Ends: September 30

Form 941 is due: October 31

4. Fourth Quarter:  October, November, December

Quarter Ends: December 31

Form 941 is due: January 31

Halfpricesoft has released the new version of ezPaycheck payroll software on latest 941 form (Year 2011).  ezPaycheck is the easy-to-use and affordable payroll software for small business and non-accountants. ezPaycheck calculates payroll taxes automatically and supports check printing feature, forms 941, 940, W2 and W3.

To learn more about ezPaycheck, please visit: http://www.halfpricesoft.com/index.asp

Or check the video ezPaycheck Made Your Payroll an Easy Job
http://www.youtube.com/watch?v=JISurtSXoZ0

The special offers of ezPaycheck small business payroll software start today. It will end on Nov 30, 2010.

If user like to purchase ezPaycheck 2010 version, you can get 33% off the regular price.

The regular price is: $89.

The promotion price is: $59.

If user like to purchase ezPaycheck 2010 + ezPaycheck 2011 combo package, they can even save more.

The regular price is: $148

The promotion price is: $90

More information can be found at:

http://www.halfpricesoft.com/index.asp