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  • The Internal Revenue Service (IRS) has recently released the 2024 Form 941, Employer’s Quarterly Federal Tax Return, along with Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, and Schedule R, Allocation Schedule for Aggregate Form 941 Filers. These updated forms, along with instructions, are now available here.

    As a business owner, learn how these changes will affect your tax reporting by reading on.

    What Employers Should Know

    Employers are advised to start using the March 2024 revision of Form 941 beginning with the first quarter of 2024. The IRS expects this revision to be utilized for all four quarters of the year. In addition, a notable change is the removal of COVID-19-related lines from the Form 941. This means the lines previously used to report COVID-19-related credits have been eliminated from the form. Employers will need to be mindful of this adjustment when completing their tax returns for 2024.

    Form instructions update

    The Form 941 instructions have been updated to align with the changes to the form. In addition, the updated instructions no longer include any worksheets. Employers should familiarize themselves with the revised instructions to ensure accurate completion of the form.

    Implications

    Employers are encouraged to familiarize themselves with the updated Form 941 and related schedules to ensure compliance with the latest reporting requirements. They may also need to review and adjust their internal processes and systems to accommodate the changes introduced in the updated forms. This could involve updating payroll and tax reporting software and training staff on the revised requirements to facilitate smooth and accurate reporting.

    Where GMS Steps In

    Given the dynamic nature of tax regulations, employers should stay informed about further updates or clarifications related to the revised forms. Regularly monitoring official IRS communications and updates can help employers stay ahead of any additional changes that may impact their tax reporting obligations.

    However, partnering with a professional employer organization (PEO) like GMS is here to take on this administrative task that, let’s face it, you don’t want to worry about. Our HR experts offer comprehensive HR, payroll, and compliance solutions that provide small business owners with expertise in managing tax-related matters. Small business owners can leverage the resources of a PEO to ensure seamless adaptation to the revised forms and instructions. This allows business owners to focus on their core business operations, knowing their tax reporting requirements are being effectively managed. Stay on top of regulatory changes and partner with GMS – contact us today.

  • Change is a constant in the world of taxation, and Indiana is no exception. Effective October 1st, 2023, the Indiana Department of Revenue (DOR) has made significant revisions to Departmental Notice No.1, How to Compute Withholding for State and County Income Tax. These changes affect residents and non-residents working in specific Indiana counties. Continue reading to dive into the details of these changes and the income tax rate adjustments in five Indiana counties.

    County Income Tax Rate Changes

    One of the most impactful changes introduced by the Indiana DOR pertains to the income tax rates in certain counties. These revisions aim to balance the fiscal needs of the local governments and maintain a favorable tax environment for residents and workers. Tax rates have been changed in the following Indiana counties:

    • Adams County: The income tax rate has decreased from 0.01624 to 0.016. This reduction may provide relief to taxpayers in the county.
    • Clinton County: The income tax rate has increased from 0.0245 to 0.0265. This change may require residents and non-residents working or residing in Clinton County to review their tax planning strategies.
    • Dearborn County: Dearborn County has also seen an increase in its income tax rate from 0.012 to 0.014.
    • Henry County: The income tax rate in Henry County has increased slightly, from 0.017 to 0.018. While the change is modest, it may impact individuals in the long run.
    • Vanderburgh County: The income tax rate has risen from 0.012 to 0.0125. This increase, while small, can contribute to various local initiatives aimed at improving the quality of life in the county.

    New Tax Exemption For First-Time Qualifying Children

    Aside from the county income tax rate changes, the Indiana DOR has introduced a noteworthy tax exemption for first-time qualifying children that went into effect on September 15th, 2023. This exemption aims to provide relief to growing families. It aligns with Indiana’s commitment to family support and financial well-being. It’s crucial for eligible families to explore the details of this exemption to ensure they can take full advantage of its benefits.

    Navigating These Changes With A PEO

    As October 1st, 2023, approaches, Indiana businesses need to be proactive in understanding and implementing these county income tax rates affecting residents and non-residents working within these counties. While some areas will see tax rate decreases, others will experience slight increases, which can impact your employees and your bottom line.

    This is where a professional employer organization (PEO) like GMS can play a pivotal role in helping your business navigate these tax changes effectively. The following is how we can help your business:

    • Expertise in tax compliance: Our experts have a deep understanding of tax regulations and can ensure that your business complies with the latest tax laws. We help you adjust your payroll and withholding processes to accommodate the changing tax rates.
    • Timely updates: We stay up-to-date with regulatory changes, such as the new tax exemption for first-time qualifying children introduced early this month. Our experts ensure your business takes advantage of these exemptions, reducing your overall tax liability.
    • Streamlined payroll management: With changes in tax rates, your payroll calculations may become more complex. PEOs have robust payroll systems that can handle these changes seamlessly, reducing the administrative burden on your HR and finance teams.
    • Cost control: We help you effectively manage your labor costs and consider the impact of tax rate changes by providing you with valuable insights into workforce optimization and compensation strategies.

    While this proactive approach will help you navigate the changes, it also enables your business to thrive in Indiana’s ever-changing business landscape. Contact us today to learn more.

  • The tax rates used on Arizona’s withholding certificates are decreasing for 2023. The Arizona Department of Revenue (DOR) updated Form A-4 to reflect lower personal income tax rates. To view and download the updated form, click here.

    All employers in Arizona are required to make the 2023 version of Form A-4 available to their employees by January 31st, 2023. The DOR requires all employees to complete and submit a new Form A-4 for 2023. For any employee who fails to fill out the new form by February 15th, 2023, the default withholding rate will now be 2% instead of 2.7%. Federal Form W-4 is not an acceptable substitute for state withholding purposes.

    Stay Compliant, Partner With GMS

    Changing rules and regulations make it challenging to focus on growing your business. When you partner with GMS, you gain experts in all fields of your business, including HR, payroll, risk management, and benefits. We ensure you remain compliant and stay up to date on all new rules and regulations. Contact us today to learn more.

  • The Internal Revenue Service (IRS) announced the annual adjustments to the standard deduction and tax brackets for the 2023 tax year. The IRS defines the standard deduction as a precise dollar amount that reduces the amount of income on which you’re taxed. A standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and blindness. The tax adjustments for 2023 are increased from 2022 in response to ongoing inflation. Continue reading to understand how the adjustments impact you and your employees.

    The Annual Adjustments For 2023

    The 2023 standard deductions for personal income taxes apply to the following:

    • Individuals: $13,850 in 2023, representing a $900 increase
    • Head of household: $20,800, a $1,400 increase
    • Married filing jointly: $27,700, a $1,800 increase

    In addition, the new tax brackets for personal income taxes apply as follows:

    • 10%: all income below $11,000 individual / $22,000 married
    • 12%: $11,000 individual / $22,000 married
    • 22%: $44,725 individual / $89,450 married
    • 24%: $95,375 individual / $190,750 married
    • 32%: $182,100 individual / $364,200 married
    • 35%: $231,250 individual / $462,500 married 
    • 37%: all income above $578,125 individual / $693,750 married

    Capital gains taxes have been adjusted as well. Capital gains are the profits you make when you sell a stock, real estate, or other taxable assets that increase in value while you own it. It’s based on profit and depends on the tax bracket. The capital gains brackets for 2023 are:

    • 0%: All earning below $44,625 individual / $89,250 married
    • 15%: $44,625 individual / $89,250 married
    • 20%: $492,300 individual / $553,850 married

    For in-depth details regarding the 2023 adjustments, click here. 

    What Your Employees Should Know

    The new tax brackets apply to all earnings starting January 1st, 2023. As an employee, you must be provided with the resources necessary to make the right decisions. The IRS provides a tax withholding estimator that assists individuals in determining if they have too much federal income tax withheld, which could reduce their take-home pay. Alternatively, it can help employees with additional income sources to decide whether to withhold more or make an estimated tax payment to avoid a tax bill. Employees can also submit the IRS Form W-4 to their HR or payroll department to ensure the correct federal income tax is being withheld.

    What This Means For Business Owners

    If you’re a business owner, it’s essential to understand the tax bracket adjustments and standard deductions. Paycheck withholding amounts and quarterly estimated tax payments can affect an employee’s income level subject to a higher tax bracket. In addition, the following could impact your employees’ decisions:

    • Determining how much salary to defer into a traditional 401(k) plan or a health savings account
    • Choosing if they want to participate in a nonqualified deferred income plan (if applicable)

    Utilize GMS’ Payroll Tax Management Services

    Tax planning can be complicated, and you shouldn’t do it alone. Payroll tax filing requirements are complex and ever-changing. Filing incorrectly can result in costly penalties. When outsourcing your payroll tax management to a company like GMS, your business will benefit in various ways. Do what’s best for you and your employees as we approach the new year. Contact us today to learn more.

  • Any employer who conducts business in Georgia has new compliance-related requirements to be considered in 2022. In order to determine the amount and type of tax credits that are available to employers, Georgia ranks all counties, census tracts, and special zones. Depending on what ranking your business falls in, it can significantly impact jobs and investment credits.

    A list of these rankings is published by Georgia’s Department of Community Affairs (DCA) at the beginning of each calendar year. The published list highlights any area that is changing and could lead to lost benefits that are available from the previous year. However, any business that is within an affected location can submit a Notice of Intent (NOI) with DCA no later than March 31st. For example, if a business filed an NOI by March 31st, 2022, that business would preserve the 2021 ranking/status for 2022, 2023, and 2024. If you do not submit an NOI in a timely manner, any business with a changing ranking or status will only be allowed to claim credits at the 2022 ranking level.

    If you plan to expand or invest in a business in the state of Georgia within the next three years, be sure to review the annual list and file an NOI if their location is within an area with benefits that are decreasing.

    Tax Credits Available To Offset State Payroll Withholding Taxes

    Depending on the location, Georgia continues to expand the availability of tax credits that can offset income tax liabilities and withholding taxes. Tier one counties, less developed census tracts, opportunity zones, and military zones are eligible for job credits. Tax years beginning January 1st, 2022, will also include investment credits for investments made in rural counties.

    The Department of Revenue established a new procedure that must be carried out through the Georgia Tax Center to claim any credits against withholding tax. This procedure was put in place to speed up the application and approvals processes. Follow these important steps that are required to use these credits to offset withholding:

    • Credit approval
    • Claiming of credit on income tax return
    • Notification of intent to utilize credit against withholding tax
    • Offsetting payments of withholding tax

    Outsource Your Payroll Administration To GMS

    Payroll tax filing requirements are complex and ever-changing. As a business owner, it can be challenging to meet payroll tax deadlines and file taxes correctly, and failure to comply can result in high penalty fees. In addition, staying on top of regulations, deadlines, and filling out forms takes time away from your busy schedule. Stop spending time worrying about these HR functions and start spending time growing your business. Contact us today!

  • The Unanticipated Telecommuting Tax  

    Throughout the progression of COVID-19, over half of full-time employees were encouraged to work from home. As a result, some major corporations have permanently implemented the option to telecommute. The drastic change brings along an unexpected tax consequence.  

    Within most states, there is state income tax withholding which is required by the state where employees perform. The state can tax employees’ earnings if they work or live within the state. When it comes to neighboring states, commuters often have reciprocity agreements. These agreements allow withholding to be required within the employee’s home state. However, the tax or withholding is not always enforced to the work state.  

    When an employee works in a different state from their employer, it often creates another complication – Nexus.  Although varying by state, it holds the potential to trigger state income, sales tax, and corporate taxes for the employer. Employees will not be the only ones who are impacted. With an increasing number of employees teleworking from various locations, how to manage where they are to pay income tax has become vastly complicated.   

    Telecommuting is proposed to be the new norm, even after the end of the pandemic. If this occurs, employers must be made aware of the potential tax impacts and how to properly manage their teleworkers.  

    How GMS Can Help:  

    Working with a PEO like GMS will allow you to stay up to date with all the changing regulations. Along with ensuring that as an employer you are covered throughout the complete employee life cycle. Allowing business owners to have additional access to counsel for any questions that may arise.   

    Interested in learning more about all GMS has to offer? Contact us today! 

  • Why Certified Professional Employer Organizations Are Critical To Franchises

    Franchising has proven to be an extraordinarily successful business model for hundreds of thousands across the country, as it delicately blends entrepreneurship with tailored guidance. For most successful franchisees, their strength lies in the structure of their business operations. So, it makes perfect sense that adding a Certified Professional Employer Organization (CPEO) further increases a franchise’s operational efficiencies – especially considering that effective employee management is ranked #2 in the three biggest challenges that franchises face.

    Franchise owners are exceptionally fond of the CPEO model because they maintain control of all organizational decision-making, while HR burdens and liabilities are shifted to the CPEO.

    CPEOs manage a plethora of duties within the employment process – from benefits to HR services, and even payroll and tax, thus providing an extra layer of safety by ensuring regulatory compliance. Having undergone rigorous background, financial, and reporting requirements set by the IRS, fewer than 7 percent of PEOs in the U.S. are currently certified.

    Partnering with a CPEO offers your franchise:

    Benefits: Benefits administration can be tolling, especially when you consider onboarding, claims, and most importantly… rates. Because the CPEO model aggregates the employees of its clients, they then having the buying power of large corporations. In turn, your franchise and its employees enjoy competitive rates and solid coverage.

    HR Services: Whether it’s employee handbooks, onboarding, drug testing services, or employment verification – amongst other things, your CPEO helps you simplify your HR plans. Now more than ever, as the country faces a workforce shortage, finetuning your employee experience is vital for your recruiting and retention.

    Payroll and Tax: CPEOs assume the responsibility for federal tax liability and penalties and are required to post an annual bond of up to $1 million guaranteeing payment of its federal employment tax liabilities. CPEOs ensure financial protections and tax benefits that non-certified PEOs do not necessarily have. This means paying your employees, record keeping + management reports, PTO accruals, and more, are no longer on your plate.

    Compliance: The co-employment relationship allows your franchise to substantially mitigate the risk associated with being an employer. A CPEO will provide guidance and support on new hire reporting, Employment Practices Liability Insurance (EPLI), unemployment and workers’ compensation insurance filings.

    A good CPEO can ease the mind of franchise owners while helping to reduce both their cost and liability. Contact us today to see how your franchise could benefit from with a CPEO.