There was an error in this gadget

Saturday, December 12, 2009

Payroll Tax Table Updates for 2010

There is a bit of confusion caused by the IRS Federal Income Tax Tables for 2010, which have more individual levels for tax withholding than in previous years. While Microsoft Dynamics GP has more than enough space to enter the entire table, current versions of Passport and RealWorld Accounting Software do not have enough spaces.
A big concern, or a minor inconvenience?
A couple of things to consider. First, an employee who earns $ 30,000 - Single with one exemption - Paid twice a month. If we don't update the IRS tax tables AT ALL, and continue to use the April, 2009 rates - The employee will be underwithheld by $ 4.71 per pay, or $ 113.04 for all of 2010.
As the old saying goes "Pretty close for Government Work".
Second, if we DO enter the new tables but just stop entering information when Passport or RealWorld run out of lines, we will only be underwithholding by 2% on employees that earn over $ 375,700 ($ 381,400 if married). That level likely eliminates a fairly large percentage of the employees.
Finally, Passport will be releasing an update to their latest Versions that will expand the Federal tax Tables to make your withholdings "just right."

No comments:

Post a Comment