How to Complete a Form W-4

We’re a little over halfway through 2018, the first tax year affected by the Tax Cuts and Jobs Act. Earlier this year, we recommended doing a “Paycheck Check-up” and making any necessary adjustments to your Form W-4 (Employee’s Withholding Allowance Certificate) to avoid withholding too little Federal tax from each paycheck, which could lead to an unwelcome tax bill or penalties in April 2019. All that requires is updating the Form W-4 on file with your employer.

The IRS provides an online Withholding Calculator to help you determine the right type of withholding for your situation. But even with this calculator, completing a Form W-4 can be confusing. Let’s break it down:

Fields 1 through 4
These are straightforward, requesting your name, Social Security number, address, marital/filing status, and whether or not your name matches your Social Security Card.

Fields 5 and 6
This is where it can become confusing. Field 5 requests the “total number of allowances you’re claiming.” Calculate the number of allowances using the worksheets provided on the Form W-4. Field 6 asks how much, if any, additional funds you would like withheld from each paycheck. This is where the online Withholding Calculator is helpful.

Field 7
In the event you meet both of the outlined conditions for exemption, indicate “Exempt” in this field.

Fields 8 through 10
These fields are to be completed by your employer.

W-4 sample

You may adjust your withholding amounts via an updated Form W-4 as often as necessary for your situation. Outside of changes in your income or tax law, you will also need to complete an updated Form W-4 with these life events:

  • Change of address (especially if you move to a new town/township/city/state)
  • Change in marital status/marital filing status
  • Name change

If you have any questions, we’re here to help. Contact us online or call 215-723-4881.

Download our FREE Sample Form W-4, where we take you through each question using a sample scenario.


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Philadelphia Wage Tax Changes July 1, 2018

July 1, 2018 marks the beginning of the new fiscal year for the City of Philadelphia and with it a reduction in the Wage Tax.

The Wage Tax affects all businesses that operate within the city as well as businesses outside of the city who hire Philadelphia residents.

Any paycheck issued with a pay date after June 30, 2018 must withhold the Philadelphia City Wage Tax at these new rates:

  • 3.8809% (.038809) for Philadelphia residents
  • 3.4567% (.034567) for non-residents

If you are a Philadelphia-based business who does not collect the Wage Tax on behalf of your employees, or if you work for a business in Philadelphia and do not have the Wage Tax collected on your behalf, you – the employee – are responsible to pay an Earnings Tax directly to the City of Philadelphia. These rates will also be lower as of July 1, 2018:

  • 3.8809% (.038809) for Philadelphia residents
  • 3.4567% (.034567) for non-residents

We are happy to answer any questions you might have regarding this or any issue related to your payroll. Call 215-723-4881 or contact us online.

We’ll Soon be One Source, Many Services, the Right Decision — All Under One Roof at our New Harleysville Location

We are excited to inform you that later this year, we are looking forward to moving from our Souderton and Hatfield offices to combine under one roof at our newly-acquired Harleysville location.

We’ll keep you posted on our progress with the building renovations as we work to make it our own before settling in. Until then, we are happy to continue to serve you at our Souderton and Hatfield locations.

One Source. Many Services. The Right Decision. This is our motto, which we strive to embody each and every day as our four business units work to serve your Accounting, Computer Solutions, Payroll, and Wealth Management needs.

New Requirements for Pennsylvania Businesses Working with Out-of-State 1099-MISC Vendors and Subcontractors

If you operate a Pennsylvania-based business and engage with subcontractors and vendors on a 1099-MISC basis, there is a new requirement from the Commonwealth of Pennsylvania. Effective January 1, 2018, “payors of non-employee compensation or rent to non-resident individuals or their SMLLC’s must withhold Pennsylvania income tax at the rate of 3.07% of their payments.”

What does this mean? For Pennsylvania-based businesses engaging with subcontractors and vendors located outside of Pennsylvania who operate as an individual or an “SMLLC” (single member limited liability company), and to whom your annual payments will total above $5,000, you are responsible for withholding Pennsylvania income tax on their payments at a rate of 3.07%.

Since this is new, penalties for non-withholding were delayed until the end of the second quarter of 2018. If you are not certain as to whether you will meet the $5,000-plus criteria, the state is recommending you remit the withholdings.

7/2018 UPDATE:
It is recommended that you provide PA form REV-1832 to all your vendors. Have them complete the payee information and exemption reason as applicable. If the completed REV-1832 is not received with an appropriate exemption, you should withhold PA income from those non-resident vendors to whom you pay $5,000 or more annually. Completed form REV-1832 should be maintained for your records.

If you have any questions about this or any other topic related to financial or IT services, we are happy to help. Call 215-723-4881 or contact us online.

Free Tax Reform Webinar: What Church Leaders Should Know for 2018

2018 is underway and with this new tax year comes a number of changes to the tax law. What does it mean for your church and your staff?
 
We’re here to help. That’s why we’re inviting you to attend this free webinarTax Reform and Tax Law Changes: What Church Leaders Should Know for 2018. This hour-long webinar, presented by Church Tax & Law church attorney and CPA Richard R. Hammar will cover what churches and church leaders need to understand about these changes for 2018 and beyond. As always, if you have any questions about your payroll and taxes under these changes, please contact us.

Canon Capital Welcomes New Staff

Adam Girdner joined our Computer Solutions department this past June as a Computer Solutions Technician. Prior to joining Canon Capital, Adam was a network administrator/support system specialist for a local university. Working in IT since 2008, he interned at a communications company while working toward his bachelor’s degree in Computer Information Systems from SUNY Brockport.

Adam lives in Perkasie with his wife and daughter. The family is eagerly anticipating the arrival of a son/little brother in early September. Adam is involved in his church as a group leader for 2nd graders. He enjoys spending time with his family and in his spare time, his favorite hobbies of hunting, hiking, fishing and camping.

 KristiBoehm

 

 

 

 

 

 

Kristi Boehm joined the Payroll/Bookkeeping department of Canon Capital in June 2015. Prior to coming onboard with us, she worked for a local electrical, plumbing and HVAC company.

Kristi lives in Lansdale with her husband and they enjoy travelling. When not at work you’ll find her enjoying the outdoors, including camping and hiking. Kristi’s love of travel extends to her hobby of travel planning, including writing reviews for her own travel website.

 

Do You Work in Philadelphia? Paid Sick Leave is Here

If your daily commute involves enduring the Schuylkill Expressway or hopping on Septa Regional Rail to Philadelphia, a city ordinance that took effect in May 2015 applies to you. Although you may live in the suburbs, if you are a full- or part-time employee who works at least 40 hours per year for a Philadelphia business the new “Promoting Healthy Families and Workplaces” ordinance brings you new benefits. What does this mean? Through this legislation, you now accrue one hour of paid sick leave for every 40 hours worked. The maximum for each year is 40 hours.

Most Employers with Less Than 10 Employees May be Exempt from Providing Paid Sick Leave

While this ordinance applies to all employers conducting business within the city of Philadelphia, those with less than 10 employees are required to provide only unpaid sick leave. They are required to do so, however, at the same rate as those businesses providing paid sick leave. The Philadelphia Department of Commerce reports that “certain chain establishments are required to provide paid sick leave regardless of the number of employees at the chain’s Philadelphia location.”

Expansive Coverage But Not All Types of Employees are Eligible

There are a few employment situations where this paid sick leave ordinance will not apply. According to this flyer from the Philadelphia Department of Commerce providing a summary of the legislation, it does not apply to:

  • Independent Contractors
  • Seasonal Workers
  • Adjunct Professors
  • Employees hired for a term of less than 6 months
  • Interns
  • Pool employees
  • Employees covered by collective bargaining agreements
  • State and Federal employees

To read the full legislation, click here. We are also happy to guide you through this new ordinance and answer any questions you might have as it relates to your payroll services. Contact us at 215-723-4881 or click here to contact us online.