Q. I write my own paychecks and use your Payroll Statement to calculate changes and track them throughout the quarter.  Why is it so important that I report that payroll to you by the deadline each quarter?

A. The deadlines for reporting and remitting taxes are very precise and the financial penalties for being even a single day late are relatively severe.  Consequently, we go to great lengths to make sure we calculate the taxes due and prepare the tax returns in plenty of time to allow our clients to meet those deadlines.  To accomplish that, we have to get your payroll changes (if you have any changes) by the deadline each quarter. At that point, we have to begin processing returns. If we get your changes after the deadline, we must then re-process the returns by hand in rush mode. That’s why we have to be sticklers about the deadlines and also why we are forced to charge a $30 re-processing fee for those that miss the deadline. 

Note: For clients who use our direct deposit service, this deadline does not apply to you.  Since we process your payroll for you, we already know your payroll totals by pay period and, therefore, there is no need for you to submit any changes to us.

Q. I submit payroll changes to you almost every week…why do you require it in writing?

A. For everyone’s protection – as well as proper record-keeping – we have made it a policy to only accept changes in writing (either by fax, email or online form). This ensures a paper trail if there is ever a dispute over a change in pay and eliminates any risk of an employee calling and pretending to be an employer asking for a payroll change.

 Q. If my former employee applies for unemployment benefits, do I have to pay for them?

A. No. You have already made tax payments to the unemployment insurance fund managed by the state.  Your contributions – along with those made by every other employer in the state – will help your employee make ends meet until she gets a new job.

Q. What is the difference between Gross Wages and Net Pay and why is it so important?

A. The IRS and every state tax agency requires all compensation to be reported in terms of Gross (pre-tax) Wages, and all taxes must be calculated based on the Gross amounts.  If you and your employee agree on a Net (after-tax) Pay (also known as “take-home pay”), we need to convert that into Gross Wages in order to accurately reflect compensation and comply with the law.

Also, if you negotiate from a Net Pay amount, you are essentially paying the taxes for your employee. As such, the number of allowances she chooses for her withholding will affect how much you have to pay in taxes.  For instance, if she over-withholds each pay period (which you are funding), she will get a refund from the IRS at year end…since you paid her taxes for her, this raises an important question in your employment relationship: are you going to get that refund or is she?

For all these reasons, we highly recommend that you think and negotiate in terms of Gross Wages rather than Net Pay.  We can run payroll scenarios for you so you can manage to a desired “take-home pay,” but once you settle on a compensation amount, it should be discussed and reported like all other industries – in Gross Wages.

Q. My employee said she owed the IRS almost $200 last year…how do I change her withholding allowances so she doesn’t owe money this year?

A. We can send you a new Form W-4 or you can download it by clicking here.  The W-4 is a government form which allows workers to manipulate how much is withheld from their paycheck each pay period in order to manage their year-end tax payment/refund. Some people like to be conservative and make sure they get a check back at the end of the year. Some prefer to be more aggressive so they're not "lending money to the government interest free."  Whatever your employee's preference, she manage it with the Form W-4.

Unfortunately, it is not an exact science because of all the variables that affect personal income taxes. If she has a tax history and can estimate what her tax liability will be for this year (she must factor in other income, deductible expenses, spouse’s income, etc.), it is easy to adjust withholdings up or down simply by electing a different number of allowances.  A lower number of allowances will withhold more taxes each paycheck and therefore reduce the year-end tax liability.  A higher number of allowances will withhold less taxes and therefore increase the year-end tax liability.

Form W-4 also allows employees, if they wish, to designate an amount be withheld each pay period as extra income tax withholding. For instance, your employee could essentially eliminate the $200 year-end liability simply by requesting that an additional $4 be withheld each week ($200 divided by 52 pay periods) or $8 if she's paid bi-weekly ($200 divided by 26 pay periods). At the end of the year, she will have paid an additional $208 in taxes.  Assuming the rest of her financial situation remained unchanged, she would end the tax year with little or no liability to Uncle Sam.

If your employee would like help with her W-4 allowances, we’re happy to help by running payroll scenarios at various allowances.  Simply have her call our toll free Help Line at 888-BREEDLOVE (273-3356). 

Q. What is your privacy policy?

A. At Breedlove & Associates, we vigilantly protect the privacy and security of our clients' personal and financial information. First, we utilize state-of-the-art encryption technology to safeguard all information relating to our clients and their employees. Second, client information is never sold, loaned, traded, disclosed, or shared with any third parties.  Third, we restrict information access to: a) our employees who require access in order to provide tax and payroll services, b) federal and state tax entities in adherence with tax reporting requirements. Fourth, we invest in rigorous document security and on-site document destruction. Finally, we utilize the most secure electronic payment and funds transfer companies and protocols available.

Our procedures exceed recommended Best Practices for information security and privacy and have resulted in zero breaches since we were formed in 1992. As technologies change, we promise to continually update our technologies and procedures in order to maintain the highest standards of privacy and security – ensuring that every one of our clients and their employees can continue to have complete peace of mind regarding their personal and financial information.