The IRS has recently published Guidance for Individual Taxpayers who received Qualified Tips or Qualified Overtime Compensation in 2025, Notice 2025-69, which provides direction and examples on how individuals will be able to calculate their Qualified Tips and Qualified Overtime and claim the deduction on their 2025 1040 tax return. Tax year 2025 is a transition year, due to the retroactive nature of its start and the inability of the IRS, Social Security Administration and payroll systems to implement the changes. The amounts arrived at, by the below methods, may not be 100% accurate, but it is acceptable for 2025, according…
Posts published in “W-2”
As discussed in our earlier blog post here, the One Big Beautiful Bill Act (OBBBA) allows for a provision of “no tax” on tips and overtime. This has turned out to be a bit of a mess, as it pertains to 2025 reporting to the employees, due to insufficient time for the Social Security Administration and the IRS to make the changes to their forms to account for it. Not to mention many payroll systems were not prepared for this brand new retroactive reporting, especially as it pertains to qualified overtime. With that being said, 2025 will be treated as…
On Independence Day, 2025, President Trump signed into law the One Big Beautiful Bill Act. This 330-page act covers a great deal, most of which will not be discussed in this article, but since it does have an impact on the payroll world, I will review pertinent items including the no tax on tips and overtime provision and the retroactive change to the Employee Retention Tax Credit. Employee Retention Tax Credit For ERTC, there will be no credit allowed for claims involving the 3rd and 4th quarter 2021, filed after January 31, 2024. This is somewhat good news, as Congress…
Over the next few weeks, as your employees start to receive their 2024 W-2 form, they will likely have questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns a salary of $50,000 per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. Some employees may also wonder why their Federal Income Tax withheld…
Over the next few weeks, as your employees start to receive their 2023 W-2 form, they will likely have questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. Some employees may also wonder why their Federal Income Tax withheld is much less…
Over the next few weeks, as your employees start to receive their 2022 W-2 form, they will most likely have many questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. Some employees may also wonder why their Federal Income Tax withheld is…
Over the next few weeks, as your employees start to receive their 2021 W-2 form, they will most likely have many questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. Some employees may also wonder why their Federal Income Tax withheld is…
Over the next few weeks, as your employees start to receive their 2020 W-2 form, they will most likely have many questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. To assist you with questions like that, here is a handy guide…
Over the next few weeks, as your employees start to receive their 2019 W-2 form, they will most likely have many questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000. The response may be, ‘do you contribute to a pension plan or have pre-tax insurance, then if so those amounts reduce your “taxable” wage, which is what appears in Box 1’. To assist you with questions like that, here is a handy guide. Download the 2019 W-2…
According to a 2017 study by CareerBuilder, they determined that 78% of US workers live paycheck-to-paycheck and 75% of workers were in debt. With those statistics, many employers find it common to be approached by an employee for a loan or advance. While it may be seen as a way to improve employee morale, productivity, and employee loyalty, there are many other factors to take into consideration to avoid a detrimental impact. In this article, I will cover some of the little known aspects of employee loans and advances. First off is whether or not the loan is going to…