Preliminary 2018 payroll tax changes and 2017 year end

As another calendar year end approaches, some preliminary payroll related information is outlined below:

2017

There are no W-2 nor 1099-MISC changes for 2017. It is not too late to order W-2/W-3 and other tax forms from Dynamic Systems.

We plan to have W-2/W-3 federal and state e-filing testing phases completed within the next few days, and that option will again be available for Advanced Accounting 7i users.

(Postscript:  our annual W-2/W-3 federal/state e-filing interface testing was completed successfully on Dec. 27, 2017.)

2018

Social security including OASDI rates and limits:

The new social security wage maximum for 2018 is $128,400 (not $128,700 per some initial reports). The 6.2% and 1.45% rates remain unchanged.

See:

https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/index.html

FUTA:

There are no FUTA changes:  the wage limit remains at $7,000 with a net rate for most employers of 0.6%.  The quarterly deposit threshold of $500 also remains the same.

California and Virgin Islands were both expected to have increased FUTA taxes for 2017, resulting in an additional 2.1% tax increase over the normal 0.6% net rate.

SUTA:

Many states will have SUTA wage base increases.  SUTA rates typically vary based on experience.  You should have hopefully received notification of your state's new wage base and your new rate if it applies.  Those changes need to be implemented in the Advanced Accounting software after your final 2017 payrolls are processed and before your first 2018 payroll (see recommendations).

Federal income tax withholding:

The IRS initially indicated on Dec. 13, 2017 that payroll withholding guidance for the coming year would necessarily be delayed and that taxpayers would not begin to start seeing any changes until early February. In short, Congress waited far too late in the year for anyone to expect a smooth transition into the beginning of a new year. On Dec. 26 the IRS updated their prior statement to indicate basically the same thing, that guidance was forthcoming in January and that they were "encouraging" employers and payroll service providers to implement those changes in February. While there were some other reports indicating that form W-4 might change, the IRS is now clarifying that no W-4 changes are expected.

See:

https://www.irs.gov/newsroom/irs-statement-withholding-for-2018

Accordingly, end users should not yet fret about making federal tax withholding changes:  use the same tables that are already in place for your upcoming January 2018 payrolls.

State income tax withholding:

Because many state income tax withholding formulas are in part based on federal amounts withheld, we expect to see more states than usual making state withholding tax changes in 2018.  In fact, we are already aware of ten (10) states that have published withholding tax tables effective January 1, 2018, plus Washington, D.C.   Since we expect even more to follow, it is premature to put out any updated tax tables just yet so we plan to wait to update those tables and also provide any required program updates once the federal changes become fully implemented and related "guidance" is provided. Most jurisdictions have implementing language that indicate end users are to implement tax table changes "as soon as practical."   We believe the unusual current circumstances justify delaying implementing changes until all of the new rules are fully known and at a time when changes can be smoothly implemented on both a state and federal basis.  Income tax withholding is after all a game of rough estimation.  If you have, however, received a formal notification of a state income tax withholding change, see our recommendations below.

Recommendations

Remember that year end routines and payroll year end processing are different and mostly not connected: they are only connected in that your year end routine needs to be run before you will be able to process payroll checks into the new year but ONLY if your fiscal year is based on the calendar year.

Use the PR option G "Clear employees/process W-2s later option.  This MUST be done before you start processing 2018 payroll checks.  Order forms that you expect to need now.  You do not, however, need to rush and print your W-2's before your first 2018 payroll as long as you use this option.

Enter the new social security tax wage limit in SY option D either before your first 2018 payroll or by sometime in January.

Make any required SUTA changes that go into effect on January 1 based on notices you may have received from your state in SY option D before your first 2018 payroll.

Withhold federal income taxes in January 2018 based on the same tables you are currently using.

Implement state withholding income tax changes in PR option K if you have received a specific notification from your state that clearly indicate the changes are effective January 1, 2018.

Watch our year end payroll update link for more information and which will be updated for new developments:

http://www.addsuminc.com/advyearend.html

New credit card interface now available for Advanced Accounting

A new fully integrated credit card option is now available for Advanced Accounting.  This new update replaces the previous interface that has long existed in the software and involves a new company that we have partnered with that we believe will, in addition to providing more competitive discounts rate and fees, also provide better sales and end user support.

Background:

We first added a credit card interface to Advanced Accounting 5.1 in the year 2000. That interface worked with an off the shelf credit card processing package called PCAuthorize, and for its era, worked well.   As additional regulations and changes in technology evolved, however, the generic card authorizing packages such as PCAuthorize, ICVerify, PC Charge and others began to vanish.  These products were either acquired (PCAuthorize was purchased by the maker of ICVerify) and/or have since had end of life cycle announcements and have been discontinued.

By mid-2006, we had developed a replacement for our PCAuthorize interface, integrating with X-Charge.  That interface was initially available for Advanced Accounting 6.1, but there was also a version for Advanced Accounting 5.1 and another legacy program. Since 2006, the X-Charge interface has remained actively in use. An equivalent interface was also made available for Advanced Accounting 7i.   

Because of a continuous change in corporate ownership of the X-Charge product and other changes including the fact that the X-Charge product is nearing obsolescence, we have over the past several years been analyzing various alternatives.  X-Charge will still be supported for Advanced Accounting 7i users who are currently using it, but new users of Advanced Accounting 7i (and for future releases and updates in the Advanced Accounting series) will instead want to use the new interface that we have now developed working with ChargeItPro and which is now available.

Unlike the early 5.1 interface that relied on an external call to an executable (one that we developed in another language), neither the X-Charge interface nor now the ChargeItPro interfaces rely on having to call any executable files which tend to be blocked and in general can create processing delays. The ChargeItPro interface, largely developed last month, makes completely internally native calls written in the same underlying language upon which the accounting software runs, and using newer techniques that we have developed over the past year.

Advantages of the new interface:

In addition to providing more responsive sales and support and better rates and fees, the new interface supports a wealth of external devices for those users who are swiping cards including support for EMV, and for processing debit cards (without having to process them as credit cards; debit cards in that respect were not supported in the prior interface).  And, as a result of making a tighter integration, we are also now providing a new integrated card/non-check return option which previously did not exist (and which can even be used by users in future releases who aren't necessarily using the integrated interface).    The new interface also records every transaction in a new transaction database in part so that the same card can be used again (in a completely PCI compliant way; the new interface is fully PCI DSS compliant).   Every transaction is also saved in the ChargeItPro web portal.

But I'm already processing credit cards on a standalone basis through another provider.  Why use an integrated approach?

The benefits of an integrated approach are huge and involve savings of time and expense that can be overlooked in making a full analysis.  An integrated approach leads to fewer errors, faster processing and overall better workflow.  It eliminates the double entries that have to be made when cards are processed "outside" of the accounting system.  And processing cards outside of the accounting system leads to not only extra work but also security concerns.   In short, to best meet PCI compliance responsibilities as well as to implement "best practices" in terms of financial and internal accounting controls, integrated credit card processing represents the optimal solution.
 
More information is available (with more to be added soon) at:

http://www.addsuminc.com/advcreditcard.html 

Feel free to contact us at any time for more information by calling us at 800-648-6258, by sending us an e-mail, or by chatting with us on our web site.