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Webinar On Tax reform for payroll professionals

Review of what the Tax Reform bill is changing<br>Outline how these changes impact other payroll related processes that you may not have thought about.<br>Review of the IRS official guidance that is to be released late January<br>Understand how employers can comply and handle changes that are to be implemented in such a short period of time.<br>Learn best practices on how to communicate to employees how these changes<br>impact them. Plus how to properly handle questions to make sure employers are not held liable for bad information.<br>Details of changes to taxation on certain fringe benefits and clarification on taxation of other fringe benefits.<br>Review of potential form changes.<br><br>Why should you attend?<br>This webinar will give the participant everything they need to know and understand in regards to tax reform and how companies need to update how they process and handle payroll for employees.<br><br>Background of the topic:<br>Tax Reform is one of the most impact tax changes to the US and US employers in decades. This webinar will give you everything you need to know to understand what is changing and how to implement at your organizations.<br><br>E-mail us at cs@onlineaudiotraining.com or Call 1-800-935-3714 to buy full webinar.

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Webinar On Tax reform for payroll professionals

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  1. Tax Reform for Payroll Professionals Dayna J Reum CPP, FPC 1

  2. Agenda • Federal Tax Withholding Changes • Basic federal withholding • Supplemental Taxation • Back up withholding • Non-resident Aliens • Form W-4 • Federal Tax Levies • Fringe Benefits • Transportation • Moving Expenses • Employee Achievement Awards • Legal Settlements • Wage Advance's and Repayments • Equity Compensation-Stock and RSU • Impact to State Income Tax • Questions? 2

  3. Federal Tax Withholding-Basic Withholding • Tax Reform law is effective Jan 1, 2018 through Dec 31,2025 • IRS guidance released Notice 1036 on Jan 1/11/2018. • The IRS encourages employers to implement as soon as soon as possible but no later than February 15, 2018 with no retro requirement. • Effective Jan 1, 2018 the current tax rates of 10%, 15%, 25%, 28%, 33%, 35% and 39.6% are changing to 10%, 12%, 22%, 24%, 32%, 35% and 37% • According to the Tax reform bill the personal exemption deduction is suspended as of Jan 1, 2018 however the law provides that the IRS may administer the income tax withholding rules under IRC 3402 without regard to this provision for tax years beginning before Jan 1, 2019. This discretion is with the IRS and US treasury. 3

  4. Federal Tax Withholding-Basic Withholding • Federal withholding tax calculation changes • Employers may round to the nearest dollar, but if rounding is used it must be used consistently. • Withholding tax amounts should be rounded to the nearest dollar by dropping amounts under 50 cents and increasing amounts from 50 to 99 4

  5. Federal Tax Withholding-Supplemental • Employees with a YTD supplemental wages that exceed $1 mil employers are required to withhold federal tax on all supplemental earnings at the highest tax bracket. • This requirement does not change • The highest tax bracket changed with the Tax reform bill is 37% • If the employer YTD is less then $1 mil the optional flat rate of income tax would apply which is currently 28%, which is referenced to the third tax bracket. Since the third tax bracket is now 22% under tax reform, 22% would be the new supplemental rate • In Notice 2018-14 the IRS states that employers can chose to correct over withheld tax for on supplemental wages between 1/1/2018 and 2/15/2018 by applying the normal correction of over collection of federal income tax provisions of the IRS 5

  6. Federal Tax Withholding-Backup Withholding • The back up withholding rate is tied to the 4thtax bracket effective 1/1/2018 the new 4thtax bracket is 24% • Backup withholding should be held on certain taxable payments if the payee fails to furnish a correct taxpayer identification number (TIN) 6

  7. Federal Tax Withholding-Periodic Payments • Under pervious law periodic payments such as pensions and annuities, when an employee did not provide a withholding certificate the employer could use married claiming 3 exemptions. • Due to The tax cuts and Jobs Act doing away with exemptions it is still unclear on how to calculate tax on these payments. • Notice 2018-14 issued by the IRS on 1/29/2018 indicate to keep this requirement the same for 2017. 7

  8. Federal Tax Withholding-NonResidentAlien • Due to the personal exemption being suspended there is an impact on Non-Resident Alien taxation the updates are below: • No difference in calculation method from regular fed withholding • Nonresident alien students from India and business apprentices aren’t subject to this procedure 8

  9. Federal Tax Withholding-Form W-4 • Impacts to the Form W-4 will be due to the personal exemption being suspended. The worksheet and the personal exemption total numbers will need to be updated. • The IRS will release the new Form W-4 by 2/15/2018 until then per IRS Notice 2018-14 employees can use the 2017 form until 2/28/2018 • Looking forward to further form and calculation changes in 2019 to accommodate the increase to the child tax credit, new dependent credit and changes to itemized deductions. • 10 day rule change to 30 day after the new form W-4 is released • Should employers get a new form from all employees? 9

  10. Federal Tax Withholding-Employee Communication • Employers are challenged by the timing and media coverage • IRS released guidance vs (EAP) System updates • How realistic is February timing? • When should employers communicate and how? • What tax explanations should employers give employees? 10

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