Payroll Colonial Accountings payroll services are competitively priced, as well as being much less expensive than traditional payroll services. Our detailed attention to our clients follows through with our payroll service. We use state of the art technology to ensure we are always up to date on new tax laws, withholding tables, and electronic filing. We offer Direct Deposit or paper checks for your employees. We are always available to discuss with the employer or the employee any issues regarding their paychecks. As with all of our services we will design specific solution detailed to your needs and concerns. All aspects of our payroll features can be detailed to your needs. Please call us today to find out more information, and see how we can save you over half of what your currently paying for your payroll service. |
payroll, including new tax provider to make sure they have made the appropriate adjustments. A few of the very important changes that you must take action now are: 1. New payroll tax credit of $400 per worker and $800 per couple in 2009 and 2010. Phaseout begins at $75,000 for individuals and $150,000 for joint filers. These credits are made through withholding taxes, you must get the new tax tables. 2. Expanded earned income tax credit to increase the earned income tax credit — which provides money to low income workers — for families with at least three children. These adjustments are also made through withholding taxes. |
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New withholding tables may reduce the amount of income tax withheld from your wages. changes resulting from the American Recovery and Reinvestment Act of 2009. You do not have to submit a Form W-4, Employee’s Withholding Allowance Certificate, to get the automatic withholding change. If you do not want to have your withholding reduced (because, for example, you have more than one job or you are married and your combined income places you in a higher tax bracket), you may want to file a new Form W-4 with your employer. You may claim fewer withholding allowances on line 5 or request additional amounts to be withheld on line 6. For additional help, get IRS Publication 919, How Do I Adjust My Tax Withholding? Or visit the IRS website at www.irs.gov and use the “Withholding Calculator.” Publication 15-T (March 2009) |
AGI -- Adjusted gross income, AGI,
is all the income you receive over
the course of the year such as
wages, interest, dividends and
capital gains minus things such as
contributions to a qualified IRA,
some business expenses, moving
costs and alimony payments. The
adjusted gross income is the first
step in calculating your final federal
income tax bill.
Credits -- Tax credits are much like
credits you get from a store. After
you figure your tax bill, you can use
the credit to reduce the amount of
the check you must write to Uncle
Sam. Tax credits are more
valuable than deductions because
they directly cut the amount of tax
you owe, rather than reducing the
amount of taxed income. A $200
credit, for example, will turn a
$1,000 tax bill into only $800. And a
few even could give you a refund
you weren't expecting.
Deductions -- Deductions are
expenses that the Internal
Revenue Service allows you to
subtract from your AGI to arrive at
your taxable income. In most
cases, the lower your income, the
lower your tax bill. If, for example, a
single filer has income of $35,000
and $5,000 in deductions, then he
would pay taxes only on $30,000.
The IRS offers all filers a standard
deduction amount (more on this
later). Some other deductions,
such as student loan interest,
moving expenses, deductible IRA
contributions and alimony
payments, also are listed directly
on the 1040A or long Form 1040.
But the term is most commonly
associated with the itemized
deductions (more on this later, too)
that are claimed by taxpayers who
file Schedule A.
Standard deduction -- This is a
fixed dollar amount that a taxpayer
can subtract from his or her
income. The standard deduction is
available to all filers and is
determined by the taxpayer's filing
status. The amounts change each
year because of inflation
adjustments; you can find the
current standard deduction levels
listed on each of the three
individual tax forms. This deduction
method is used by most taxpayers
and eliminates the need for them
to itemize actual deductions such
as medical expenses, charitable
contributions or state and local
taxes.
Itemized deductions -- These are
expenses that can be deducted
from your AGI to help you reach a
smaller income amount upon
which you must calculate your tax
bill. Itemized deductions include
medical expenses, other taxes
(state, local, property and sales
tax), mortgage interest, charitable
contributions, casualty and theft
losses, unreimbursed employee
expenses and miscellaneous
deductions such as gambling
losses. Some itemized deductions
must meet IRS limits before they
can be claimed. When you itemize,
you must file Form 1040 and detail
your deductions on Schedule A.
Exemption -- This is an amount
that the IRS lets you subtract from
your income to reflect all the
people who count on your income.
Exemptions can be claimed for
yourself, your spouse and your
dependents. The IRS allows a set
amount for each exemption and,
as with deductions, this total is
subtracted from your adjusted
gross income to come up with your
final, lower earnings amount upon
which you must figure your tax bill.
Your personal exemption amount
is in addition to any deductions,
either standard or itemized, that
you claim.
Progressive taxation -- This is the
system in which higher tax rates
are applied as income levels
increase. The U.S. tax system
uses progressive taxation with tax
brackets starting at 10 percent and
rising to 35 percent for the
wealthiest taxpayers.
Taxable income -- Your overall, or
gross, income reduced by all
allowable adjustments, deductions
and exemptions. It is the final
amount of income you use to figure
just how much tax you owe.
Voluntary compliance -- This
describes the philosophy upon
which our tax system is based: that
U.S. taxpayers voluntarily comply
with the tax laws and report their
income and other tax items
honestly.
Withholding -- Also known as pay-
as-you-earn taxation, this method
enables taxes to be taken out of
your wages or other income as you
earn it and before you receive your
paycheck. These withheld taxes
are deposited in an IRS account
and you are credited for the
amount when you file your return.
In some cases, taxes also may be
withheld from other income such
as dividends and interest.
is all the income you receive over
the course of the year such as
wages, interest, dividends and
capital gains minus things such as
contributions to a qualified IRA,
some business expenses, moving
costs and alimony payments. The
adjusted gross income is the first
step in calculating your final federal
income tax bill.
Credits -- Tax credits are much like
credits you get from a store. After
you figure your tax bill, you can use
the credit to reduce the amount of
the check you must write to Uncle
Sam. Tax credits are more
valuable than deductions because
they directly cut the amount of tax
you owe, rather than reducing the
amount of taxed income. A $200
credit, for example, will turn a
$1,000 tax bill into only $800. And a
few even could give you a refund
you weren't expecting.
Deductions -- Deductions are
expenses that the Internal
Revenue Service allows you to
subtract from your AGI to arrive at
your taxable income. In most
cases, the lower your income, the
lower your tax bill. If, for example, a
single filer has income of $35,000
and $5,000 in deductions, then he
would pay taxes only on $30,000.
The IRS offers all filers a standard
deduction amount (more on this
later). Some other deductions,
such as student loan interest,
moving expenses, deductible IRA
contributions and alimony
payments, also are listed directly
on the 1040A or long Form 1040.
But the term is most commonly
associated with the itemized
deductions (more on this later, too)
that are claimed by taxpayers who
file Schedule A.
Standard deduction -- This is a
fixed dollar amount that a taxpayer
can subtract from his or her
income. The standard deduction is
available to all filers and is
determined by the taxpayer's filing
status. The amounts change each
year because of inflation
adjustments; you can find the
current standard deduction levels
listed on each of the three
individual tax forms. This deduction
method is used by most taxpayers
and eliminates the need for them
to itemize actual deductions such
as medical expenses, charitable
contributions or state and local
taxes.
Itemized deductions -- These are
expenses that can be deducted
from your AGI to help you reach a
smaller income amount upon
which you must calculate your tax
bill. Itemized deductions include
medical expenses, other taxes
(state, local, property and sales
tax), mortgage interest, charitable
contributions, casualty and theft
losses, unreimbursed employee
expenses and miscellaneous
deductions such as gambling
losses. Some itemized deductions
must meet IRS limits before they
can be claimed. When you itemize,
you must file Form 1040 and detail
your deductions on Schedule A.
Exemption -- This is an amount
that the IRS lets you subtract from
your income to reflect all the
people who count on your income.
Exemptions can be claimed for
yourself, your spouse and your
dependents. The IRS allows a set
amount for each exemption and,
as with deductions, this total is
subtracted from your adjusted
gross income to come up with your
final, lower earnings amount upon
which you must figure your tax bill.
Your personal exemption amount
is in addition to any deductions,
either standard or itemized, that
you claim.
Progressive taxation -- This is the
system in which higher tax rates
are applied as income levels
increase. The U.S. tax system
uses progressive taxation with tax
brackets starting at 10 percent and
rising to 35 percent for the
wealthiest taxpayers.
Taxable income -- Your overall, or
gross, income reduced by all
allowable adjustments, deductions
and exemptions. It is the final
amount of income you use to figure
just how much tax you owe.
Voluntary compliance -- This
describes the philosophy upon
which our tax system is based: that
U.S. taxpayers voluntarily comply
with the tax laws and report their
income and other tax items
honestly.
Withholding -- Also known as pay-
as-you-earn taxation, this method
enables taxes to be taken out of
your wages or other income as you
earn it and before you receive your
paycheck. These withheld taxes
are deposited in an IRS account
and you are credited for the
amount when you file your return.
In some cases, taxes also may be
withheld from other income such
as dividends and interest.
COLONIAL ACCOUNTING, INC ACCOUNTING SERVICES We will work closely work you to manage every aspect of your financial needs. |
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| Colonial Accounting, Inc. | 3279 Westover Ridge | Williamsburg, VA 23188 | tel: 757.645.2799 | fax: 757.645.2828 | cai@colonialaccounting.com |
The amount of income tax
withheld for your wage bracket
depends on your marital status
and the number of allowances
you claim. You file a withholding
certificate, Form W-4, with your
employer, indicating your status
and allowances. Without a Form
W-4, your employer must
withhold taxes as if you are a
single person with no
exemptions.
You may find that you are
withholding too much tax or too
little. You can adjust your
withholding at any time by filing
a W-4 with your employer. In
fixing the rate of withholding on
your wages, pay attention to the
tests for determining whether
sufficient income taxes have
been withheld from your pay. A
penalty will apply if your wage
withholdings plus estimated tax
payments (including prior year
overpayments credited to
current estimated tax) do not
equal the lesser of 90% of your
current tax liability or the
required percentage of the prior
year's tax.
Adjust withholding if there will
be a significant change in the
tax you owe for 2009. Credits
such as the child tax credit,
Hope scholarship credit, and
lifetime learning credit may
reduce your 2009 tax. By
decreasing your withholding
now, you can get the benefit of
the lower taxes throughout the
year. On the other hand, a
withholding increase may be
advisable if previously claimed
deductions or credits will not be
available to you, or if you expect
an increase in nonwage income
such as capital gains. Check
the instructions to Forms W-4
and 1040-ES for 2009 to help
you adjust your withholdings.
withheld for your wage bracket
depends on your marital status
and the number of allowances
you claim. You file a withholding
certificate, Form W-4, with your
employer, indicating your status
and allowances. Without a Form
W-4, your employer must
withhold taxes as if you are a
single person with no
exemptions.
You may find that you are
withholding too much tax or too
little. You can adjust your
withholding at any time by filing
a W-4 with your employer. In
fixing the rate of withholding on
your wages, pay attention to the
tests for determining whether
sufficient income taxes have
been withheld from your pay. A
penalty will apply if your wage
withholdings plus estimated tax
payments (including prior year
overpayments credited to
current estimated tax) do not
equal the lesser of 90% of your
current tax liability or the
required percentage of the prior
year's tax.
Adjust withholding if there will
be a significant change in the
tax you owe for 2009. Credits
such as the child tax credit,
Hope scholarship credit, and
lifetime learning credit may
reduce your 2009 tax. By
decreasing your withholding
now, you can get the benefit of
the lower taxes throughout the
year. On the other hand, a
withholding increase may be
advisable if previously claimed
deductions or credits will not be
available to you, or if you expect
an increase in nonwage income
such as capital gains. Check
the instructions to Forms W-4
and 1040-ES for 2009 to help
you adjust your withholdings.