Tax Forms & Publications
Businesses, Trusts, & Estates:
Below is a list of different topics related to tax information and reporting requirements for various taxpayers depending on your particular facts and circumstances.
Federal Payroll Tax Withholding 2018
The Social Security wages subject to tax are $128,400 for 2018 while the wages subject to Medicare will continue to be levied against all earnings even if they exceed $128,400. The overall FICA rate for employers is 7.65% -- 6.2% for Social Security and 1.45% for Medicare. The overall FICA rate for employees is 7.65% for -- 6.2% for Social Security and 1.45% for Medicare on the first $200,000 of wages ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return). If employee’s wages exceed $200,000, the overall FICA rate for employee’s increases to 8.55% for – 6.2% for Social Security and 2.35% (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all wages in excess of $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return). For self-employed workers, the FICA tax is 15.3% for the first $200,000 of earnings ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return) -- 12.4% for Social Security and 2.9% for Medicare. For self-employed workers, the FICA tax is 16.2% for all earnings in excess of $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return) -- 12.4% for Social Security and 3.8% (regular 2.9% Medicare tax + 0.9% additional Medicare tax) for Medicare.
Effective January 1, 2011, employers are required to make all federal tax deposits electronically via the Electronic Federal Tax Payment System (EFTPS).
An employer is either (I) a monthly depositor or (2) a semi-weekly depositor. The IRS will notify you of your deposit status only if there is a change in your deposit schedule. You are classified as a monthly or semi-weekly depositor based on the total taxes reported on Form 941 for the prior four quarters ending on June 30 of the preceding year (the look-back period). If you reported $50,000 or less of employment taxes for the look-back period, you are a monthly depositor; if you reported more than $50,000 of employment taxes during this look back period, you are a semi-weekly depositor for the current year (but see the $100,000 and $2,500 rules on the next page).
If you accumulate taxes of $100,000 or more on any day in a deposit period, the taxes must be deposited by the close of the next business day. This rule applies to both monthly and semi-weekly depositors. The deposit period is a calendar month for a monthly depositor, and Wednesday through Friday and Saturday through Tuesday for a semi-weekly depositor. Any monthly depositor who becomes subject to this $100,000 next-day deposit rule immediately becomes a semi-weekly depositor for the remainder of 2017 and for 2018.
Federal Payroll Tax Reporting 2018
Employers are required to file a Quarterly Federal Tax Return (Form 941) to indicate total wages, FIT withholdings, taxable social security/medicare wages and tips to IRS. Form 940 must be filed annually.
State Payroll Tax Withholding 2018
The State Disability Insurance (SDI) rate for 2018 will be 1.0%, and wages subject to SDI are $114,967. The maximum to withhold is $1,149.67. When required to make Federal Tax Deposits, you will also be required to make deposits of SDI and Personal Income Tax (PIT) by the same due dates to E.D.D. if PIT for that period exceeds $500.
Employers are reminded that it is your responsibility to make deposits for SUI and ETT at least once a quarter. If this guideline is not followed, you could be subject to a large tax liability at the end of the calendar year.
State Payroll Tax Reporting 2018
Starting with the first quarter of 2011, California employers no longer file Form DE 6, Quarterly Wage and Withholding Report, or Form DE 7, Annual Reconciliation Statement. Instead, employers now file form DE 9, Quarterly Contribution Return and Report of Wages, and Form DE 9C, Quarterly Contribution Return and Report of Wages (Continuation).
Form DE 9 is filed quarterly to report UI, ETT and SDI employer contributions, along with PIT withholding. Form DE 9C is also filed quarterly to report detailed wage items for each worker.
Report of New Employee(s) (DE 34) 2018
Any employee who is newly hired, rehired, or returning to work from a furlough, separation, termination, or leave of absence without pay is considered to be a new employee and must be reported to the EDD within 20 days of the employee’s start-of-work date. Report all new employees on Form DE 34. If you acquire an ongoing business and employ any workers from the acquired company, these employees are considered to be newly hired and must also be reported to the EDD on Form DE 34.
Independent Contractor Reporting (DE 542)
Report to the EDD within 20 days of either making payments totaling $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever occurs first. Report all independent contractors on Form DE 542.
Employers must maintain a W-4 Withholding Allowance Certificate for each employee. These are subject to review by taxing authorities. Anyone who files an exempt certificate must complete a new one for each year and submit it to their employer by February 15. If an employee claims more than 10 allowances, or claims exemption from income tax withholding and his or her wages are expected to be more than $200 a week, submit a copy of the certificate to the I.R.S. when you file Form 941.
A reminder to employers who have hired new employees, you must maintain an I-9 form for each employee. This form has been revised and is subject to review by the Department of Homeland Security.
You should have received new federal and state withholding guides for 2018, please use them to determine the amount of income tax to be withheld for wages paid beginning January 1, 2018. Please contact our office if you have not received the withholding guides by December 31, 2017.
Information Reporting Requirements – Forms 1099
Payments by business to unincorporated businesses, partnerships and individuals for rent, interest fees, non-employee compensation and other payments are required to be reported to the I.R.S. Form 1099 is required to be mailed to the recipient by January 31 and to be filed with the I.R.S. by January 31. The I.R.S. will automatically forward Forms 1099 to the Franchise Tax Board.
An important change took place in 1998 regarding payments to attorneys for services rendered. In 1998 all payments to attorneys, whether they are individuals, partnerships, corporations, or other entities, will be required to be reported on 1099’s.
The penalty for failure to file a Federal Employment Return is 5% (up to the 25% limit). If the failure to file a return is fraudulent, the penalty is increased to 15%, up to 75%. The failure to make timely federal deposits is 2%, if the failure is for five days or less; 5%, if more than five days but less than fifteen days; 10%, if more than fifteen days; and 15%, if taxes are not deposited by the earlier of the date that notice and demand for immediate payment is given or ten days after the first delinquency notice.
For failure to file an information return by the date or to include correct information, the penalty is $15 a return (up to $75,000 a year), if filed within 30 days after the due date; $30 a return (up to $150,000 a year), if filed later than 30 days after the due date but by August 1; and $50 a return (up to $250,000) if filed after August 1.
Under current California law, anyone who does not hold a valid license from the Contractor’s State License Board who performs construction-related work for a builder, contractor, businesses, or individuals is an employee of that builder, contractor, business, or individual. The builder, contractor, business, or individual is liable for an unlicensed subcontractor’s State Income Tax Withholding, State Disability Insurance, State Unemployment Insurance and Employer’s Training Tax. The amount to be withheld for State Income Tax is 6% of all money paid to the unlicensed subcontractor.
There are no exceptions to this requirement, even if the unlicensed subcontractor is an independent contractor under common law and federal law. The term “contractor” has a very broad definition and includes construction, installation, alterations, repair, demolition, clean-up, etc.
The Employment Development Department is continuing to increase the number of payroll tax audits and assessing penalties and interest against those in the construction industry. If no withholding returns have been filed for money paid to an unlicensed subcontractor who is determined to be an employee, the statute of limitations is eight years instead of the normal three years. This means that a builder or contractor who did not properly withhold and report payroll tax is subject to being audited and liable for payroll taxes for up to eight years.
While increasing the number of payroll tax audits performed in all industries, the Employment Development Department is continuing to reclassify “independent contractors” as employees due to the lack of evidence that states otherwise. Generally, independent contractors are not employees if such persons are engaged in separately established businesses. They usually perform specific tasks and they have the right to control and discretion as to the manner of performance of the contract for services in that the results of the work, and not the means by which it is accomplished, is the primary factor bargained for.
If you have any questions regarding the status of employees or independent contractors, we recommend you contact us immediately so we can discuss your situation and try to avoid any problems in this area.
Social Security Benefits and Annual Earnings 2018
The earnings limit for workers who are younger than “full” retirement age will be $17,040. The earnings limit for people turning 66 (for those born in 1943 through 1954) in 2018 will be $45,360. Your benefits will be reduced if you earn more than these limits.
If you are younger than full retirement age in 2018, we must deduct $1 from your benefits for each $2 you earn over $17,040. If you reach full retirement age during 2018, we must deduct $1 from your benefits for each $3 you earn over $45,360 until the month you turn age 66.
Fresno County Property Tax 2017
Fresno County will be mailing the Property Tax Statements (Form 571F) beginning January 1, 2018. It is important to have an accurate inventory of any equipment owned on January 1st or for those who rent equipment to customers to have a list of merchandise that is currently rented on January 1st.
Please forward the property statement to our office if you would like us to complete this form for you. Also, send any information regarding the purchase or disposal of equipment for the calendar year 2017. If you have not yet received your property statement by January 15, 2018, contact the Fresno County Assessor’s Office at 488-3519.