Payroll Portal

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As a part of our payroll service to you, the Watson CPA Group will generate a W-2 and electronically submit the information to the IRS, state and local agencies. Throughout the year we ask you to estimate certain things such as self-employed health insurance premiums, HSA contributions, 401k deferrals, etc.

 

Now it is time to provide accurate year-end numbers so your W-2 is correct. Even seemingly innocuous things like 401k Roth deferrals are necessary even though they might not have an income tax effect on your W-2. Please enter the required information below.

 

This information is due by December 12, 2017. If we must amend your W-2 to make corrections because this information was untimely or incorrect, we must charge a $250 fee for the amendment. Yuck. Please don’t delay.

 

Just to re-iterate one more time, the figures below should be actual amounts paid in 2017. 401k plan contributions are due March 15 2018 (your business tax return due date), and SEP IRA contributions are due April 17 2018 (your individual tax return due date). We can extend the SEP IRA deadline to October 15 2018 with an extension of your individual tax return (it is the only IRA allowed to be extended).

Health Insurance, LTC, HSA

Self-Employed Health Insurance (SEHI) and Long-Term Care (LTC) premiums are typically paid directly by your company to the insurance provider. Regardless of how these were paid, please enter the amounts below. Remember, you are allowed to have an insurance policy that covers your entire family even though your spouse or children might not work for the company.

 

Your company may also contribute directly to your Health Savings Accounts (HSA) on your behalf. This is only in conjunction with a high-deductible health insurance plan, and is commonly offered by your provider.

 

If you have more questions about how all this stuff works in connection with your small business, please review our KB article on the subject with the link below-

 

 

This is important. We encourage the company to make SEHI, LTC and HSA payments directly instead of using personal funds. While at the end of the day (and on your tax return) it does not matter, it is cleaner to have the company make these payments directly if able. If you made these payments PERSONALLY or a combination, please explain the payments, the amounts, the dates, etc., below-

Health Reimbursement Arrangement (HRA), Section 105

HRAs are very unique, and allow for your company to reimburse you for all out of pocket medical expenses. If you have an HRA or a Section 105 Plan (the official name), please provide those reimbursed expenses below-

Flex Spending, Cafeteria Plans, Section 125

Do you have a Cafeteria Plan (aka Flex Spending, FSA, Section 125, Dependent Care)? If not, you might consider one. A plan costs about $400. You can deduct up to $5,000 in dependent care benefits (for example). At 20% tax rate, this is a savings of $1,000 minus the administration costs of $400. $600 in your pocket. Contact us for more information. If you already have a Section 125 Plan (the official name), please explain what payroll deductions or amounts you have set aside for this-

Small Business Retirement Planning

Retirement planning is important for small business owners, and we can help determine which plan is best for you. If you want some more information, please check out our Retirement Planning chapter from our book with the following link-

 

 

SEP IRA (old school)

If you have a SEP IRA, or you want to set one up, you have until the tax filing deadline of your personal tax return to fund the account including extensions. So, you could file for an extension on February 1, file your tax returns on March 1, and fund your SEP IRA by October 15. SEP IRAs are dinosaurs however in favor of the i401k which allows a much larger contribution. Please detail the amount of the SEP IRA contribution you have made or plan to make. Remember, this is limited to 25% of your W2 wages- so $50,000 salary allows for a $12,500 contribution.

 

Solo 401k Plan (new school)

If you have an Solo 401k plan, contributions must be made by the tax filing deadline of the business (March 15). With a Solo 401k plan, there are two elements to the contributions. The employee and the employer. The employee (you) can contribute $18,500 plus $6,000 if you are 50 and older. The company (employer) can contribute 25% of your W-2 wages. Another way to look at this is- 401k = SEP + $18,500.

 

We can set up and manage a Solo 401k plan for you with TD Ameritrade. Please let us know if you need help.

 

Did you want to run a payroll event on your spouse for a 401k contribution? If so, please explain-

SIMPLE Plan

SIMPLEs must be set up by September 30 of the current year, so by Q4 this option is unavailable. SIMPLEs are very inexpensive ways to offer a tax-deferral system for you and your employees. It can be viewed as a hybrid between a company-sponsored 401k and a SEP IRA. Low costs. $12,000 deferral amount. Company matching up to 3%. If you do not have employees beyond yourself, then this is NOT a good plan to adopt.

 

Personal Use of Auto

If the company owns a vehicle that you use personally, then imputed income must be added to your W2. Please tell us the number of miles driven during 2015 on a company-owned vehicle that were personal. If you do not enter anything we will assume zero.

Miscellaneous

Is there anything else we should know that might impact your W-2 and the various codes that are required to be submitted to the IRS and state agencies? If so please describe below-

W-2 Submission

Click the Submit button below to securely and safely send this information to us. You can submit as many forms as needed. If you later discover an error- simply re-submit your information and check the box below letting us know.

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