New Form W-4 Issued by IRS for Use in 2020

The IRS has issued a new Form W-4 for 2020. All employers will be required to use this form for new employees hired as of January 1, 2020.

The 2019 Form W-4 underwent two previous updates, one in May and one in August, to incorporate the changes that came with the Tax Cuts and Jobs Act (TCJA). Those changes included suspension of personal exemptions and increasing the standard deduction, but previous versions of Form W-4 still included the withholding allowance based on the personal exemption amount. As such, some taxpayers were over-withheld and some under-withheld.

Current employees are permitted to submit a new Form W-4 after the first of the year, especially if they wish to adjust their withholding amounts. If current employees do not submit the new 2020 Form W-4, employers are required to base withholdings on the data provided on the 2019 version of the form so it would serve everyone best to make sure all employees complete a new Form W-4 in the New Year.

Learn more about the new Form W-4 in this FAQ guide provided by the IRS.

If you have questions about this topic or any of our other business service offerings, please don’t hesitate to call 215-723-4881 or contact us online.

Is This Holiday Gift Taxable to My Employee?

The holiday season is here, and for many business owners it is the time of year to show employees gratitude for their service with year-end bonuses or gifts.

Cash is always taxable and must be included in an employee’s W2 wages, so a gift card or gift certificate might seem like the preferred option. However, according to the IRS, even if the cash is given in the form of a gift card or certificate since it can be considered as a cash equivalent, it is still taxable:

“Cash or cash equivalent items provided by the employer are never excludable from income. An exception applies for occasional meal money or transportation fare to allow an employee to work beyond normal hours. Gift certificates that are redeemable for general merchandise or have a cash equivalent value are not de minimis benefits and are taxable.

A certificate that allows an employee to receive a specific item of personal property (i.e. a grocery store certificate for a turkey, Christmas tree, etc.) that is minimal in value, provided infrequently, and is administratively impractical to account for, may be excludable as a de minimis benefit, depending on facts and circumstances.”

Therefore, gift cards such as those issued by Visa, Amazon, Target, etc., are taxable and must be included in an employee’s W2 wages. As stated above, gift cards or certificates that can be redeemed for a specific item or service may be excluded as a “de minimis,” or fringe, benefit.

If you have a question about the gift you’re considering for your employees, we are happy to help. Call Canon Capital Payroll Services at 215-723-4881 or contact us online.

 

Church Payrolls Add Extra Twists to Already Complicated Tax Regulations

If you are processing your payroll in-house, the twists and turns of payroll tax regulations can make it a confusing and frustrating endeavor. If your organization is a church, there are additional factors to consider, such as the clergy member’s employment status and housing allowance.

Clergy: Employees or Self-employed?

Under Federal law, most clergy members have what is called dual status. Dual status means that for Federal income tax purposes, clergy are considered employees; but for Social Security and Medicare purposes, they are considered self-employed. Based on this premise, Social Security and Medicare taxes are not deducted from the clergy member’s pay even if they have not elected out of contributing to Social Security and Medicare.

Instead, due to their self-employed status related to Social Security and Medicare, clergy are responsible for paying both the employee and employer portion of these taxes.  Churches are relieved of the burden of paying the employer portion of Social Security and Medicare. A church might choose to pay clergy for the employer portion of these taxes, but it will need to be included in their taxable income.

Housing Allowance

Under Federal law, clergy members are entitled to claim a housing allowance which provides certain tax advantages. Housing allowances are not taxable for federal and local tax (except Philadelphia) purposes, but the allowances are taxable to the state of Pennsylvania.

If you would like help making sure your church payroll is in compliance, please contact us online or call 215-723-4881.

Canon Capital Announces Holiday Hours

We hope you are anticipating a wonderful holiday season with family and friends.

Please note these dates when our hours will differ from our usual schedule of Monday through Friday from 8:00 a.m. to 5:00 p.m.

  • Thanksgiving Day, November 28, 2019: Closed
  • Black Friday, November 29, 2019: Open Regular Hours
  • Thursday, December 19, 2019: Closing at 1:00 p.m. for Holiday Luncheon
  • Christmas Eve, Tuesday, December 24, 2019: Closing at Noon
  • Christmas Day, Wednesday, December 25, 2019: Closed
  • New Year’s Eve, Tuesday, December 31: Closing at Noon
  • New Year’s Day, Wednesday, January 1, 2020: Closed

As always, it is our pleasure to be of service to you. Thank you for choosing Canon Capital for your CPA/Accounting, Payroll, Technologies, and Wealth Management needs.

Canon Capital Wealth Management Receives CEFEX Certification of Fiduciary Excellence for Twelfth Consecutive Year

We are honored to announce that Canon Capital Wealth Management has successfully achieved CEFEX (Centre for Fiduciary Excellence) recertification for the twelfth consecutive year.

The CEFEX certification is a result of an annual audit by independent expert analysts. This designation means that we adhere to the best practices within our industry, including specific criteria which have been substantiated by regulation or written in consultation with leading firms.

“This independent certification serves as verification and affirmation of our Fiduciary Investment Management process whereby clients’ interests always come first,” said Dr. Peter Roland, Managing Director of Canon Capital Wealth Management & Family Office Services.

A copy of our certification information and certificate can be viewed here.

Canon Capital Management Group Names Craig Covington to the Firm as Unitholder

We are proud to announce the admission of Craig Covington to the firm as a unitholder. Craig joined our Technologies business unit in 1998.

Craig serves as a Technical Consultant on the Canon Capital Technologies team, guiding business clients through all aspects of Managed IT Services, Network Security, Data Backup & Recovery, and Help Desk Support. He also leads sales and marketing for the Technologies business unit.

“Craig has been an invaluable asset to our Technologies business unit, providing leadership and expertise in his care for our clients,” said Michael Witter, managing director of Canon Capital Certified Public Accountants and co-founder of Canon Capital Management Group. “His dedication to our mission of excellence is demonstrated every day, and we are proud to welcome him as a unitholder.”

Craig holds a Business degree from Delaware Valley College, an MBA in Marketing from LaSalle University, and is a Microsoft Certified Professional.

“Joining Canon Capital over 20 years ago was one of the wisest decisions I have made,” said Covington. “It didn’t take me long to realize that this company truly cares about the success and well-being of its employees. Because of the leadership team’s commitment to biblical values, I am blessed to be able to effectively balance work and family while raising my four kids — a personal goal I set early on in my marriage. For that I am forever thankful. That, combined with their desire to maintain the highest integrity when serving clients has created the ideal workplace.”

“I was excited to be presented with the opportunity to join the leadership team and participate in carrying on this tradition of excellence,” Covington added. “I look forward to working alongside the other unitholders as we position Canon Capital to meet the needs of our clients and staff well into the future.”

Craig also serves as executive director of Healthy Neighbors International, a non-profit medical missions organization serving in Nicaragua. Craig resides in Doylestown with his wife and has four children. He enjoys spending time with his family.

Canon Capital Management Group provides a sole source of financial and business services: Accounting, Payroll, Technologies, and Wealth Management. For more information, contact us online or call 215-723-4881.

Are You Prepared for the End of Windows 7?

If you’re one of the estimated 40%+ of businesses still running the outdated Windows 7 platform, consider this your wake-up call: time is nearly up for this tried-and-true operating system. On January 14, 2020, Microsoft will end support for Windows 7. That means no more updates (security or otherwise) will be offered by the company from that date forward.

The clock’s been ticking on Windows 7 ever since Microsoft ended mainstream support back in 2015, and while it’s important to note that Windows 7 will still technically be usable after next January, this upcoming shift will spell trouble for users who’ve stuck it out to the platform’s bitter end.

If you’re running a business this is a risk you can’t afford. It’s time to contact your IT provider and make preparations to upgrade – preferably well in advance of the January 14, 2020 deadline. Whether you’re planning on seamlessly transitioning to Windows 10 or moving on to an alternative operating system, this is a task that needs to be at the top of your list.

Since Windows 7 will continue to work after January 14, you may wonder why you can’t just stick it out and keep using the platform. The answer is you can, but you absolutely shouldn’t. In fact, the risks and problems this decision would pose to your business make an upgrade less of a decision and more of an eventuality.

First, Windows 7 will become progressively more unstable as modern hardware continues to outpace the software. Modern software is already not being designed with Windows 7 in mind. This includes old software that’s been upgraded since the world moved on from the operating system in 2015. As technological progress continues at breakneck speed, more and more key programs will become unusable in Windows 7.

The same goes for hardware. Tech equipment advances exponentially year by year. In order to take advantage of these massive improvements, you’ll need an operating system equipped to handle these new capabilities and features. What’s more, as the hardware progresses, it may become incompatible with Windows 7 altogether.

However, these are small concerns when compared to the future security of your network. Cybercriminals are certain to flock to the operating system after support ends, eager to pick off easy targets left vulnerable by the lack of ongoing security updates.

As time goes on, new vulnerabilities are discovered in even the most well-designed operating systems. To fight against hackers, developers continuously search for ways to remove these security gaps and they release them in the form of patches. With every annoying update you’re forced to install on your machine, you’re staving off would-be opportunists on the hunt for their next victim.

After Windows 7’s end of life these security updates and patches will dry up. That means that any users still on the platform – and there will be a lot of them – will be exposed to the increasingly crafty exploits used by hackers. Cybercriminals, attracted to the lowest-hanging fruit, will come for Windows 7 users, eager to pick at the scraps.

Staying on an operating system after it’s no longer supported is like leaving the digital door open on your business—don’t do it!

At this point we are only four months out from the Windows 7 end-of-life date. That may seem like a lot of time but when it comes time to actually make the transition, you’ll need all the time you can get. Upgrading dozens, hundreds or even thousands of PCs is more laborious than you probably realize. And with so many other companies scrambling to do the same toward the end of the year, IT providers are likely to get bogged down with service requests.

Instead of putting it off to the last minute and potentially leaving yourself vulnerable, contact your IT provider as soon as possible to initiate the upgrade process. You’ll leave yourself ample time to iron out any issues as they arise without the added pressure of an imminent deadline.

When your business is on the line, it just doesn’t make sense to delay. Don’t risk losing everything you’ve worked so hard to build. Make preparations to leave Windows 7 behind today!

If you are in need of an IT provider, contact us today to discuss how we can be of service.

Canon Capital Payroll Services is Hiring! Part-time Payroll Processor Position Available

We are hiring! We currently have an opening for a Payroll Processor. This position is responsible for processing payrolls and general payroll support. This position requires excellent communication, organization, and interpersonal skills. The ideal candidate must be detail-oriented, flexible, and able to handle multiple tasks and deadlines. Payroll processing experience is required. Canon Capital offers excellent pay and flexible hours are possible.

Interested parties should mail their resume to:

H.R.
PO Box 228
Harleysville, PA 19438

Resumes may also be sent via fax (215-723-1487) or email.

July 1, 2019 Updates to Philadelphia Wage Tax and New Jersey Minimum Wage

July 1, 2019, brings changes to the paychecks of employees in the city of Philadelphia and the state of New Jersey.

Philadelphia Wage Tax

In Philadelphia, city residents and employees who live outside city limits but whose companies are located in Philadelphia will see a reduction in the Philadelphia City Wage Tax.

The Philadelphia 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, 2019, must withhold the Philadelphia City Wage Tax at these new rates:

  • The new Wage Tax rate for residents of Philadelphia is 3.8712% (.038712).
  • The new Wage Tax rate for non-residents of Philadelphia who are subject to the Philadelphia City Wage Tax is 3.4481% (.034481).

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 for paying an Earnings Tax directly to the City of Philadelphia. These rates will also lower as of July 1, 2019:

  • 3.8712% (.038712) for Philadelphia residents
  • 3.4481% (.034481) for non-residents

New Jersey Minimum Wage

On July 1, 2019, New Jersey will start a path to increase the state minimum hourly wage from $8.85 to $15.00 by the year 2024. This will be accomplished according to a timeline of steady, incremental increases. The amount of these increases differs according to the business category, to allow for implementation without a negative impact on the business. What this means is while most employers will be required to pay a new minimum hourly wage of $10.00 with annual increases of $1.00 for the following five years to reach $15.00 per hour, businesses deemed as “Seasonal & Small Employers” with fewer than six employees and “Agricultural Employers” will increase the minimum hourly wages they pay on a different scale. A full explanation is provided via this chart.

Workers who receive tips on top of their wages will see their hourly rates rise from the current $2.13 per hour to $5.13 per hour by January 2, 2022. Their cash wage tips must equal the minimum wage.

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