Archive for January 2011
Back to the basics
This week’s blog will be brief but important since it should be the foundation of why you do what you do. So often we get caught up in the day-to-day details of our businesses that we lose sight of our mission. Based on a recent experience I am going to do my best to get back to the basics and remember why I began “Turning things on end to achieve results” in the first place. I suggest we all put a mental post it note up and focus on making our customers happy by providing great products or services. If we do that, everything else should take care of itself AND I think we will all have more fun.
Below is a description of the incident that convinced me to write on this topic:
“That’s exactly what I wanted!” I recently heard those words from a client of mine when I fulfilled an ad hoc request for him. When I heard those words; bells, whistles and buzzers were going off in my head. I had just heard the best thing you can hear from your customer or client – complete satisfaction in my performance. I had met and probably exceeded his expectations. I realized at that moment the reason I do what do. It is not for money or prestige or any other financial reason. I get my “kicks” by making my clients happy.
I am certainly not going to stop billing for my services but I am going to keep customer satisfaction in the forefront of my thoughts and it will be interesting to see the results. I encourage everyone to do the same whether you are working for someone else or have a business of your own.
Have a customer satisfaction oriented week.
2011 Tax Changes Affect All Wage Earners
As a result of the extension of the “Bush” tax cuts last month, several other things were changed that will affect many people. The first is the reduction of the Social Security withholding from employees paychecks by 2% – from 6.2% to 4.2% in 2011. The employer will still have to match at the full 6.2%. That is the good news – an extra $200 per $10,000 of earnings. For employers it will also take some fast work to modify existing payroll software to accommodate the change.
Below is the announcement from the IRS website:
IR-2010-124, Dec. 17, 2010
WASHINGTON ― The Internal Revenue Service today released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011.
Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits.
The new law also maintains the income-tax rates that have been in effect in recent years.
Employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but not later than Jan. 31, 2011. Notice 1036, released today, contains the percentage method income tax withholding tables, the lower Social Security withholding rate, and related information that most employers need to implement these changes. Publication 15, (Circular E), Employer’s Tax Guide, containing the extensive wage bracket tables that some employers use, will be available on IRS.gov in a few days.
The IRS recognizes that the late enactment of these changes makes it difficult for many employers to quickly update their withholding systems. For that reason, the agency asks employers to adjust their payroll systems as soon as possible, but not later than Jan. 31, 2011.
For any Social Security tax over withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2011.
Employers and payroll companies will handle the withholding changes, so workers typically won’t need to take any additional action, such as filling out a new W-4 withholding form.
As always, however, the IRS urges workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms. Publication 919, How Do I Adjust My Tax Withholding?, provides more information to workers on making changes to their tax withholding.
If you prefer, you can click here to read more.
Now here is some “less than good” news. Due to the late changes made, the IRS says it will be unable to make the changes to the forms for filing schedule A of 1040 in time and likely will cause a delay until mid to late February before filing can take place. No additional time to file will be granted so be ready to file by April 15th as usual (unless you file for an extension). Below is the announcement from the IRS website:
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If you prefer, you can click here to read more.
Have a great week and enjoy those extra dollars in your paycheck.