Patrick Haggerty

Jan 13, 2025 | news.bloombergtax.com | Patrick Haggerty

Question: IRS instructions for Form 941 specify that the adjustment for fractions of cents on Line 7 is for rounding errors on amounts withheld from employees for Social Security, Medicare, and Additional Medicare taxes. Each pay period, for deposit purposes, an employer calculates its share of these taxes as equal to the amount withheld from employees. Is Line 7 also used to adjust rounding errors for the employer share?

Dec 9, 2024 | news.bloombergtax.com | Patrick Haggerty

Question: Step 4(c) of Form W-4 allows an employee to elect additional withholding each pay period. Can an employee enter a negative number to reduce withholding? Answer: There is a way for employees to reduce their tax withholding using the Form W-4, Employee’s Withholding Certificate, but the method described will not work. The federal Form W-4 does not authorize entry of a negative number in Step 4(c).

Dec 2, 2024 | news.bloombergtax.com | Patrick Haggerty

Question: A company changed payroll service providers. The new provider suggested that each provider prepare Forms W-2 based on the payroll that it processed rather than try to load data from the previous provider into the new provider’s system. Can an employer file more than one W-2 under the same Employer Identification Number for each employee? Answer: Yes, an employer may file more than one Form W-2, Wage and Tax Statement, for an employee using the same EIN.

Nov 25, 2024 | news.bloombergtax.com | Patrick Haggerty

Question: Which states and territories will pay additional unemployment taxes in 2024, and how is it calculated? Answer: On Nov. 12, the Labor Department announced that New York, California, and the US Virgin Islands are in credit reduction status for 2024. Employers in those states will not receive full credit for state unemployment taxes they paid when they file their 2024 Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Nov 18, 2024 | news.bloombergtax.com | Patrick Haggerty

Question: A company pays sales personnel commissions with occasional bonuses. The company also makes periodic severance payments to certain terminated employees. The company uses the 22% flat rate withholding method for bonus payments but prefers to withhold from commissions and severance pay using the regular Form W-4 method rather than the supplemental methods. Is this allowable?