One update we had to mention is Franchot announced the BPW approval of a $160 million contract to replace the state tax processing system. Some of the areas covered: adjusting fraud prevention, increase ability of taxpayers to match their account via an online self-service application, best practice for security standards, audit collection reporting and estimating functionality, and security. Security tends to be a hot topic at all times due to enhancements in the field, tightening the reins, and increasing protection where possible.
Talking about security…
Let’s switch gears into Social Security. Chuck Liptz agreed to come down and talk to our members and our followers about what’s going on in Social Security and how we can benefit from what services they have to offer. Bonus, these services are online. Yay!
Chuck used to be the director of employer wage reporting and relation staff, so he not only has an understanding of the wage reporting process but also you as their customer base. Everything he had to share with us happens to be FREE. As a service provider, what you choose to charge your client is up to you, but all the services that the Social Security Administration has to offer are free.
A few reminders you’ll need to know for 2018:
- SS tax rate is 7.65%
- Self-employment rate is 15.3%
- And the max for SS Earnings is $128,400
- There’s no maximum for Medicare Taxes
You must give W2’s to employees by January 31st. Same due date applies, whether paper or electronic, to submit your W2’s to the Social Security Administration. If you fail to comply, you could be penalized by the IRS after that date.
All numbers are the same for 2019 except SS Earnings goes up to $132,900.
Up to 90% of all the W2’s received by the Social Security Administration comes in electronically. Remember, all services are free, so filing your W2s electronically is also free! Take advantage of that assistance if you aren’t already.
Visit https://www.ssa.gov/employer/ and register for a username and password to access handbooks, tutorials, videos, among other resources. Simply register as an individual on behalf of the company rather than registering for each company separately. Theoretically, you could register on the 30th and have your w-2’s sent in on time on the 31st (but we recommend registering with a wider window of time). Most cases provide immediate usage upon signing up so long as you meet all of the requirements. Security is our middle name, so we set up a process to make the verification procedure as secure as possible.
After 90 days, your password goes into a hole. The next time you come in after (be it 90 days or 120 days or longer), we tell you to put in your old password and change it to a new password. This step means you don’t have to check in every 90 days.
Electronic Wage Reporting Online
If your software creates a file, you tell us where on your computer it is, you hit upload, we get it, and then you receive confirmation as well as the “receipt” with a code for the file that you sent. Applying this into your activities will save you a bit of hassle. Being able to upload and send to the Social Security Administration with relative ease and having a way to keep track of the trail in a simpler manner. Information at your fingertips.
Clients need to give papers to their employees. The online form to fill out looks like the paper version, so you can do up to 50 of these via the website at one time for free. You can also put in the state information, but it doesn’t go TO the state. All the information will be stored there, but you still have to deal with that aspect separately.
When you finish entering information, you need a W3, and the website will generate that for you. All the math is done for you, and the math will be correct if no errors were made. So, you want to match it to the 941s, but it will all be there for you with a confirmation to click “yes” it all correlates.
You can print out all the appropriate copies and just save the PDF’s rather than keeping the paper copies somewhere. This measure allows you to have the PDF readily available. Save the file to a folder, and you can give it to your client right then and there when they need it.
How do I know you did this?
When you inevitably get asked that question, you can print out the confirmation with the number, provide the assurance that they got it on time to prevent late penalties, etc. There’s an earlier version when filing in which you can print out information and ensure everything is correct or check for any changes that need to be applied.
The website offers a free service to print out paper copy after entering this information online, as well.
SSNVS (Social Security Number Verification Service)
An important note: this application only ensures that the names and numbers match the Social Security Administration records. When someone gets hired, look them up right then and there. Before you send in W2’s or do payrolls, you want to check the numbers and names. People change their names (married, divorced, etc.) and sometimes forget to report those alterations.
The information will not be shared with anyone else. The correct name or number will also not be given, so you can try various combinations in case they forgot something or mixed up letters or numbers. We all have those moments.
The verification codes will say the name, number, they match or don’t match, date of birth may not match, or there’s another problem that says they need to go into the local Social Security office to handle. If something doesn’t match, check for typos and correct information, ask to see the cards (you can’t demand, but you can ask to see the card), or ask them to check with the local Social Security Office.
You can also perform this process on behalf of your clients. Just put in their EIN to begin checking information for them. Up to 250,000 Social Security Numbers per file can be analyzed, and you get a response by the next business day! How amazing is that?
Employer Correction Request Notices (EDCOR)
This year, starting around the end of March or early April, any W2 file that you send to the Social Security Administration (SSA) that has a name or Social Security Number mismatch will have a letter sent to the employer – not to you as the third party but to the employer – that states the name and number does not match. For that reason of receiving that notification, you want to use the verification service. You can take a look at the examples of what to expect in the notice online. In the memo, the employer is informed about the issue and what to do to try to fix the problem.
MySocial Security (www.ssa.gov/myaccount)
Signing up for a mySocial Security account gives you access to a plethora of information about the benefits whether you currently collect or not. Say you didn’t get or can’t find your 1099 information. With a mySocial Security account, you can look up that data and print it out. The account is very easy, very efficient, and simple to use to get all the information you need.
If you don’t receive Social Security Benefits, you can:
Request a replacement Social Security (SS) card if you meet certain requirements, check the status of your application or appeal, get your SS statement to estimate your future benefits or verify your earnings or view the estimated SS and Medicare taxes you’ve paid, and get a benefit verification letter.
If you receive benefits or have Medicare, you can:
Request a replacement SS card if you meet certain requirements, report your wages if you work and receive SS Disability Insurance (SSDI) and/or Supplemental Security Income (SSI) benefits, get your benefit verification letter, check your benefit and payment information, change your address and phone number, start or change direct deposit of your benefit payment, request a replacement Medicare card
If you want to visit a field office, make an appointment ahead of time. You don’t want to sit in the office for hours on end to file for benefits. So, call ahead and prevent that wait. However, pretty much anything you need is on the website which is always available.
Let’s use their services as we’ll be getting into our busy season for W2 preparation. E-filing the W2 and W3 will be a big timesaver.
All of these changes will have no impact on the 2019 tax season. This is a process and will take several years to build the entire thing. Smooth sailing!
SSA Helpful Resources:
www.ssa.gov/employer (wage reporting, employer tax information, etc.)
General Wage Reporting Questions – 1-800-772-6270 or by email at email@example.com
BSO technical Help 1-888-772-2970 or by email at firstname.lastname@example.org
Employer Services Liaison Officers (ESLO) 8 of them nationwide
Social Security Administration Website – www.ssa.gov
Pre-Tax Season Kick Off
On January 17th, a Thursday, we will be celebrating here in the office. We invite you to come for a little wine and cheese, talking about what’s going to be happening, commiserating all together, and toasting into the next wonderful filing season. Plus, free shredding! Bring some items to shred and we’ll shred those for you for free. We hope to see you there.
Happy New Year!