December 28, 2010

Two-Year Hiatus From Mandatory e-pay Penalty Ending

Starting January 1, 2011, the mandatory e-pay penalty will be assessed when a person required to make payments electronically pays using any other method.

The penalty is equal to one percent (1%) of the amount paid, unless failure to pay was for reasonable cause and not willful neglect. (Revenue and Taxation Code section 19011.5)

Electronic payments are required once a person:

* Makes an estimate tax or extension payment (by check or electronic method) over $20,000.

* Files an original return with a tax liability over $80,000.

Taxpayers who were previously notified (in 2009 or 2010) they meet the e-pay requirement must make their payments electronically starting January 1, 2011 to avoid the penalty.

When you are required to make electronic payments but pay by other means, the FTB can assess a penalty equal to 1 percent of the amount paid, unless your failure to pay electronically was for reasonable cause and not willful neglect.

For more information on individual mandatory e-pay, including on how to make electronic payments and the penalty, go to and search for mandatory epay.

December 22, 2010

Employment Taxes

The IRS has useful information about employement taxes. A large part of my California law practice is helping those with unpaid employment taxes. More information about employment taxes (FICA, FUTA, Self-employment tax) is at the IRS website. Topics include the following:

Federal Income Tax and Social Security and Medicare Taxes

Federal Unemployment (FUTA) Tax

Self-Employment Tax

Reporting Employment Taxes

Depositing Employment Taxes

e-file for Business and Self-Employed Taxpayers

Preparing and Filing Form W-2

Outsourcing Payroll Duties

Independent Contractor (Self-Employed) or Employee?

References/Related Topics

Businesses with Employees
Employment Tax Forms
Employment Tax Publications
Obtaining Blank Federal Tax Deposit Coupons
Virtual Small Business Tax Workshop, Lesson 9 - What you need to know about Federal Unemployment Taxes (FUTA)
SSN Verification
Tax Calendar for Small Businesses and Self-Employed
Unemployment Insurance (UI) Taxes
W-2 Online. Create, save, print, and submit Forms W-2 and W-2c online.
Wage Reporting