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Conversion and Re-classifying IRA Accounts

October 28, 2011 By

IRA accounts are retirement savings accounts that have a tax savings element. There are two types of IRA accounts- Traditional IRA accounts are accounts that allow a taxpayer to save for their retirement tax free subject to a maximum. Once the taxpayer retires, the distributions are taxes. Roth IRA accounts work in the opposite way. Contributions to a Roth IRA account are after tax but the growth and withdrawals of the funds is tax free. A taxpayer can choose to invest in either of the two IRA accounts. People with a high tax rate are advised to go for traditional IRA so that they can pay tax on retirement when their tax rate lowers. On the other hand, those who have a low tax rate such as those who are starting out on their career are advised to take a Roth IRA as they pay tax upfront when their tax rate is low in exchange for tax free distributions on retirement.

Conversion of IRA Account

The tax code also allows for a taxpayer to convert a traditional IRA into a Roth IRA. In this case, the taxpayer pays income tax on the balance of the traditional IRA at the highest of his or her income tax rate so as to convert to a Roth IRA. This move is ideal when the market comes down and the balance in the accounts is low. Many investment advisers advised their clients to transfer their traditional IRAs into Roth IRA in 2010 as the markets were low and therefore their IRA account balances were low. By making the a conversion when the balances were low, their tax liability was also low. They could then continue saving up in their Roth IRA to enjoy tax free funds on retirement. Those who converted traditional IRAs to Roth IRA in 2010 can take advantage of the 2-year-reporting tax break available only in 2010. This means that taxpayers who made the switch to Roth IRAs can pay the taxes due from this conversion in 2010 and in 2012. The taxpayer can also decided to pay the whole tax amount in 2010 by electing to do in the Form 8606, Part II.

Re-characterization of IRA Accounts

If you make a conversion from a traditional IRA into a Roth IRA, you still have an opportunity to convert it back to a traditional IRA within a given time period. The converting back into a traditional IRA is called re-characterization. For many people who opted for a conversion in 2010 had  the opportunity for re-characterization as long as it was done before October 17th 2011. If they re-characterized, they simply reversed the move they made to a Roth account and therefore, will not pay the taxes that were due. This window allows taxpayers who change their mind to revert back to their traditional IRAs. Taxpayers who decide to go for a re-characterization after filing the 2010 tax return will need to file a tax amendment to finalize the reversal.

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Donations – Tax Deduction Codes for Charity Organizations

October 27, 2011 By

One of the most popular tax deductions is charitable donations. The federal government allows taxpayers to donate both money and non-cash items to charities, tax-free. However, depending on the charity organization that you chose to donate to, various deduction rules will apply.

Qualifying Tax-Exempt Charities

For the donations to be tax deductible, they will need to be made to a qualifying tax-exempt charity. Charity organizations are provided with this tax-exempt status after meeting various IRS requirements. The IRS has a list of all the qualified charities that you can donate to so as to qualify for the tax deduction. The list is adjusted every now and then to remove charities that lose their non-exempt status. Therefore, you will need to check the IRS list every time you make donations so as to ensure that the organization you are donating to is qualified to warrant you the tax relief.

Caps on Tax Deductible Donations

There is a cap to the amount of donations that you can make tax-free. The cap is set as a percentage of your Adjusted Gross Income (AGI). Different percentages are set for different organizations with the cap ranging between 30% and 50% of one’s AGI. The IRS has categorized charities into deductibility codes and each code has a different donation cap. These codes are provided below:

  • Code 1 – This category is for umbrella organizations that have other subsidiary charities. The Code 1 charities will normally not receive donations as the donations are channeled to the subsidiary charities.

 

  • Code 2 – This charity code is for the fraternal lodges. Donations to these institutions are tax deductible as long as the donations are used for charity. The cap to for this code is 30% of one’s AGI.

 

  • Code 3 – This category is for privately owned foundations and one can donate up to 50% of their income tax-free.

 

  • Code 4 – This code also includes private foundations but these foundations have not met certain qualifications. The cap for tax free donations to these charities is 30% of your AGI.

 

  • Code 5 – This category if for organizations that have either lost their tax exempt status or for those that have not yet applied for the status from the IRS. Therefore, donations to organizations under code 5 are not tax deductible.

 

  • Code 6 – This category is for organizations that have the rule 170(c) status. These organizations, which are normally private foundations, are not necessarily charities. Their cap for tax-exempt donations is 30% of the AGI.

 

  • Code 7 – This category is for charities whose charity work is consumed by the government in one way or another. When donations are given to these charities (and such donations are used for a government related project) the donation will have a cap of 50% of one’s AGI.

 

  • Code 8 – This category is for charities with foreign addresses. There is no tax relief for donations made to these organizations.

 

For you to claim a tax deduction against qualifying donations under the above rules, you must itemize your deductions on your tax return. You also need to remove the value of any items you receive in exchange for the donation. Besides this, you will also need to keep proper records of the acknowledgment for the donations, as this will be your support documentation when making your deduction claims.

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The IRS Increases Audits to get to Defaulters

October 26, 2011 By

Have you ever been audited by the IRS? Well, if you have not, you should not ignore the probability of it happening. The IRS is increasing the number of audits that it is performing in all groups of taxpayers.

2010 Statistics on Audits

According to 2010 statistics on IRS audits, there was an increase of 31% for tax audits targeting the very rich taxpayers in America (who have incomes of over $1 million a year) as compared to 2009. For the taxpayers who had incomes of between $200,000.00 and $1 million, the audits for 2010 remained the same as those in 2009 at 2.7% of the total taxpayers in this bracket. For the bulk of taxpayers who had incomes of below $200,000.00, there was an increase in audits of about 8% as compared to 2009. 1% of the taxpayers in this bracket were audited up from a fraction of a percent in 2009. This 8% increase in audits between 2009 and 2010 for the lower income earners was the largest increase in the number of audits at this level since the IRS started publicizing these statistics in 2006 – and the IRS is set to increase the audits further.

Correspondence Audits

A major reason for increased IRS audits is a focus on correspondence audits. Correspondence audits involve sending letters to taxpayers, requesting them for information concerning various items in their tax returns. The correspondence audits are mainly triggered by the Automated Underreporter Program that matches off your tax return entries with information received from third parties. If there is a discrepancy, the program automatically sends an inquiry letter to the taxpayer, requesting documentation and explanations on such discrepancies. If you ever receive such letters from the IRS, all you need to do is attach the support documentation for the specific item in question and mail it back together with the original letter from the IRS.

Automatic Bill for Math Error

Another boost for the IRS that may have contributed to the increase in taxpayer audits is the automatic billing rule. Congress has given the IRS authority to bill a taxpayer automatically in the case of mathematical errors.

Audit Processes and Consequences

Besides the correspondence audits that have accounted for the bulk of IRS audits, the IRS may also request you physically visit the IRS office with certain documentation for an audit. They can also request to pay a visit to your business to perform an on-site audit. Regardless of the type of audit that the IRS seeks, these audits can really be a hassle. They can especially be stressful if you are missing paperwork supporting your tax report. Worst still, you may be in a situation where the entry or entries being audited are the ones that you actually erroneously forgot to put in your tax return or you indicated a wrong amount for.

If an IRS audit result indicates that you indeed, owed taxes that you had not disclosed, you may be up for either civil or criminal charges. Criminal charges are usually pursued if the taxpayer is involved in outright tax-fraud while civil charges are initiated when the taxpayer is deemed as having been negligent in regards to filing their taxes honestly and accurately. Civil charges usually include repayment of the due taxes plus payments of penalties for lateness and interest that accrued from the time the original debt was due. Criminal charges, which are very rare, will include fines and even imprisonment. In 2010, tax audits yielded $17 billion for Uncle Sam and the amounts have been increasing over the years. On the other hand, the number of taxpayers who were convicted for tax crimes was only 2,472 (about 0.002% of taxpayers in the year).

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Tips on How to Manage Your Federal Taxes

October 25, 2011 By

Many taxpayers wait until the height of tax season to know if they are to get a tax refund or if they will owe Uncle Sam some cash. This can be an anxious time as one calculates or awaits to find out the tax position from the preparer. However, any taxpayer can have full control of their taxes and know their tax liability, even as taxes accrue. This way, you can manage your taxes and even determine what amount of refund or what fees to pay at tax time. Here are some tips on how to determine your tax liabilities way before tax time and how to manage them better:

The IRS Tax Calculator

The IRS Tax Withholding Calculator is a service available on the IRS website. This calculator enables you to calculate the taxes that you will be due at year’s end. It is a very detailed calculator and will require you to input many fine points such as your eligibility for Child-Care credits, your contributions to retirement accounts with tax savings, contributions to Health Savings Accounts (HSA), withheld taxes as indicated in your paycheck, among other tax figures.

Use an Online Paycheck Calculator

The online payment calculators are provided by a third-party website and not the IRS. They are much easier to use as compared to the IRS calculator and are ideal for a quick tax checks. To use the calculator, you will input your annual income, your state, the allowances included in your W-4, and other few tax details. Once you have inputted these details, the calculator computes your State and Federal taxes that will be due at the end of the year. This is one of the easiest ways of knowing how much taxes you will owe at tax time. However, the calculator does not give a very accurate result, as other factors not included in the calculations affect your taxes. All in all, the results you get are generally accurate and indicative and will only be off by a few dollars. You can easily get an online paycheck calculator by conducting a search.

Dummy Tax Return

Another way of knowing the taxes that you will owe at year’s end is by filling out a dummy tax return. You can do this manually or use tax software. Fill out all the fields with your actual numbers as if you are filing a return. This way, you can calculate the taxes that will be due at year’s end.

Making Adjustments

Once you have prepared your taxes using whichever method you decide, you can then review the numbers so as to manage your taxes. If results show that you will owe significant taxes or you will be owed a refund, you can make withholding tax adjustments in good time to ensure that your taxes are withheld correctly as the year goes by. You can make the adjustments by providing your HR department with a new W-4 form with the corrected adjustments. However, when making W-4 form adjustments to reduce your taxes, ensure that you will end up paying off over 90% of your due taxes by year’s end. If you will have paid less than 90% by year end, you may be charged penalties and interest on the difference.

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Documentation Checklist for Preparing Your Tax Returns

October 24, 2011 By

Tax season always comes faster than one plans for and this period causes many unprepared taxpayers confusion. Preparing for your annual taxes can be a hectic process. For this reason, many taxpayers forgo tax-saving opportunities and tax benefits, as they do not dedicate much time to their taxes. However, this does not need to be the case. Proper preparation for the tax season can enable you to have an easy tax season and also get you some tax savings. To be better prepared for the season, one needs to get all the documentation necessary to file returns ready. This way, tax preparation becomes an easy process and will even take a much shorter time. Below is a checklist of these tax-return documentations:

  1. Previous Tax Return – One of the important documentations that you will need to ease the process of preparing your taxes is your previous year’s return. Every time you file a return, ensure that you take a copy and place it in a designated tax file, folder, portfolio, etc. Such previous returns help you as you input the various details of your future returns.

 

  1. W-2 Form – Another important tax document are W-2 Forms. The W-2 Form is given to employees by their employer. The form indicates the wages paid out and any taxes withheld. With this form, you can easily compute the income entry on Line 7 of the Tax Return Form 1040 and also, entries to input for withheld taxes on Line 61.

 

  1. Tax Return Forms – You also need to have the various tax return forms to prepare your taxes. The forms include the main Form 1040, Forms 1099-INT and 1099-DIV for any dividends or interests that you may have earned from your investments, Forms 1099 MISC for any miscellaneous incomes (such as earned self-employment income, royalties and rental incomes), Forms 1099-R for retirement related contributions, tax relief forms (such as the Form 1098-E, Form 8863 and Form 8917 for any educational credit claims), and Form 8829 for home office deductions.

 

  1. Documentation for Deductible Expenses – You will also need documentation for your tax deductions. Some deductions are above-the-line while others only come to play if you are itemizing your deductions. Above-the-line deductions include Health Saving Account contributions, student loan interests, alimony, moving expenses, and qualifying retirement contributions. Itemized deductions include donations, qualifying travel expenses, and medical expenses.

 

  1. Personal Accounts for Self Employed – If you are in self-employment, you will need your business accounts or a schedule of your incomes to help you prepare your taxes. You will also need a schedule of your business expenses so as to pick out the qualifying expenses for tax deductions.
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6 Options for Paying Your Federal Taxes

October 21, 2011 By

For employees, taxes are usually withheld by your employer on a monthly basis. You may however, need to pay any balance due after preparing your tax returns. People in self-employment will need to calculate quarterly installment taxes as the year goes by and finally settle any outstanding taxes for a given year by the 15th of April the following year. There are various options available to enable you to make these tax payments to the IRS. Below are six of these options:

1. Payment by Check or Money Order

One of the ways that you can settle your outstanding tax bill is by writing out a check to the IRS and having it posted to the IRS office. You can attach the check to your tax returns. Ensure that the amount on the check is the same as that of the outstanding taxes as indicated in the return to enable easier verification. You can also send a check or money order at any other time within the year to settle outstanding taxes. You will need to indicate your name – or names for those who file jointly – your Social Security number (for joint-filers, indicate both the numbers included in your tax returns), physical address, telephone number, and the tax year that the check is settling taxes for. You can get the address of where to send the check from the IRS website. You can also drop the check at the nearest IRS office in person.

2. Electronic Funds Transfer

Another option available to settle your due taxes is by an electronic funds transfer. The IRS provides a system to facilitate this process, referred to as the Electronic Federal Tax Payment System (EFTPS). You can pay taxes or schedule payments through this system. You can access the system from the website at eftps.gov or by calling the toll free IRS number at 800-555-4477.

3. Installment Payment Options for Taxes below $25,000.00

If you owe taxes of less than $25,000.00, you can set up an installment payment plan through the IRS website. This online service is referred to as the Online Payment Agreement (OPA). The service will enable you to pay off the due taxes in monthly installments as opposed to making a lump-sum payment. You will however, be charged interests and late payment fees. You can also set up the installment payment plan by filing IRS Form 9465, “Installment Agreement Request Form”. The IRS will get back to you in response to the filed form and will give you the details of the installment payment plan.

4. Installment Payment Options for Taxes above $25,000.00

If the taxes owed are more than $25,000.00, you will need to file Form 433F, “Collection Information Statement” to be considered for a installment payment plan. The form requires you to provide details of your financial assets and other finance related information. You will also need to attach various support documentations for your finances. The IRS then reviews your specific financial situation and determines the amount of installments to be paid on a monthly basis.

5. Credit Card Payments

Another option available to settle your tax bill is by using your credit card. The IRS has outsourced the credit card payment service to three private companies and you can choose to pay from these various vendors. These three companies are Link2Gov, RBS WorldPay Inc., and Official Payments Corporation. You can make payments either by calling their telephone number or through their website. Note that these companies charge you for this service.

6. Short-Term Delayed Payment

If you do not have money by the time the taxes are due, you can call the IRS’s toll free number and request for some extra time to raise the funds. Usually, the IRS agents may give you up to 120 days to settle the taxes with no interest or penalties. You will however, need a good, justifiable reason or explanation to qualify for this grace-period extension.

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IRS Releases Guidelines for Handling the Estates of 2010 Deaths

October 20, 2011 By

The 2001 law that provided guidelines for the application of Estate taxes was set to expire in 2009. Though the expiration date was known well in advance, Congress did not set a new law until December 17, 2010. This late entry of the new Estate taxes meant that the estates of people who died in 2010 were not subject to any estate taxes. However, the new taxes that were passed into law in 2010 were passed retrospectively for the whole 2010 tax year, except for those who wished to opt out of the tax regime. This means that heirs of estates of people who died in 2010 before the enactment of the new law have a choice of how the estates are to be treated for estate tax purposes. They could either opt out and have no estate taxes applicable to the estate or opt to have the new taxes apply to the estate. The procedure of applying either options remained unclear for most part of 2010. However, on August 5, 2011, the IRS provided guidelines in the Notice 2011-66 on how to apply both options in handling estates of people who died in 2010.

Option 1: Participating in New Estate Taxes

Under the guidelines from the IRS, the executors of the estates of 2010 decedents have the option to opt out of the estate taxes. To do this, the executors will need to file Form 8939 “Allocation of Increase in Basis for Property Acquired from a Decedent Form”. For the beneficiaries who chose to opt out, the estate will maintain the valuation basis carried forward from the decedent. In other words, the purchase cost basis of the assets in the estate will remain the same as it was before the decedent died.

Option 2: Opting Out of Estate Tax Regime

The other option available to the executors of 2010 decedents is participating in the new tax rules. The executors who choose this option will handle the estate as per the new estate taxes. Under the new law passed in 2010, the estate beneficiaries will have $5 million worth of wealth transferred tax free. Above this limit, the maximum estate taxes applicable will be 35%. The advantage of the new taxes is that the value of the wealth is stepped up to the current market value at the time of inheritance. This means that after paying the applicable taxes, the purchase price basis for the purpose of calculating capital gain taxes will be the market value at the time of transfer. For the executors to apply this option, they will need to file Form 706 “United States Estate and Generation-Skipping Transfer Tax Return Form”. Those who decided to take this option will need to have filed estate returns forms on or before September 19, 2011.

What Option to Take

To determine the option to take for the estate of decedents of 2011, executors will need to calculate both options and utilize the one with more savings for the beneficiaries of the estate. For an estate with assets that have significantly increased in value compared to the original purchase price basis, taking the option of participating in the new estate taxes may be better, as the wealth basis will be stepped up to the current market price. On the other hand, for estates with which their value has depreciated or has not increased significantly, opting out of the tax change may have more tax savings.

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Making Non-Cash Donations for Tax Breaks

October 19, 2011 By

Donations to qualifying tax-exempt charities are tax deductible. Such donations also include non-cash donations. However, unlike cash donations, it is at times, difficult to determine the value of various items donated to charities. Therefore, the IRS has placed specific rules that govern non-cash donations for tax deduction eligibility.

General Rules for Non-Cash Items

In general, for all non-cash items whose value exceeds $250.00, one needs to receive a record from the charity, acknowledging the donation with the description of the item being donated and its value. This record will support the tax deduction in your tax returns. For single non-cash items that exceed $500.00, one needs to fill out Form 8283 (Non-cash Charitable Contributions Form) with the details of the donation and attach the form to his or her tax returns. For a non-cash item donation that exceeds $5,000.00, you will need to fill out the “B” section of the same form (Form 8283). Besides this, you will need to get an appraisal by a qualified appraiser for the item. This also applies for similar goods with a value of over $5,000.00 – for example, donating 20 used computers with a total value of $10,000.00. There are specific rules that apply to different types of non-cash items. These are discussed below:

  • Clothes and Household Items – Clothes and household items need to be in good and usable condition to qualify for a tax deduction. The price of the donated items is determined by the price that the items would have fetched in a used clothes and items store. Clothes and household items valued over $500.00 need an official valuation.

 

  • Art, Ornaments, and Memorabilia – Making donations of collectibles and jewelry is more complex, as the value of such items is more subjective. For donations over $500.00, you will need to justify the price in one of three ways.

 

◦     A price-list that list a similar product

◦     Evidence of a recent sale of similar item- for example on an online auction website

◦     A valuation from a professional appraiser.

If a single donated item in this category is valued over $20,000.00, you will need to include a picture of the item as you attach the Form 8283.

  • Planes, Boats, and Cars – For donations of planes, cars, and boats, the qualifying charity receiving the item is required to provide the person donating with a Form 1098-C that indicates the value of car and date that it was given. This is the documentation you will use for your tax deduction.

 

  • Stocks and Mutual Funds – Donating stocks and mutual funds is more straight-forward, as these items are more or less like cash. The value amount to use for the stocks and mutual fund donated is the value of these assets on the day that they were donated. You can use an average of the highest and lowest price of an asset on the day of donation for the more volatile assets.

 

  • Travel Mileage – If your donation was in the form of charity work, you get no deduction for the value of the work done. However, if you traveled for the purpose of the charity work, you can claim charity mileage deduction. For the tax year 2011, the tax deduction for charity mileage is 14 cents per mile. You can also include parking fees and any toll charges to the amount to deduct

 

Donations are only tax deductible for taxpayers who itemize their tax deductions. Therefore, you will need to check whether deducting the donation through itemizing provides a larger tax savings that taking the standard deduction.

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Do You Have Unclaimed Money From the IRS?

October 18, 2011 By

The IRS holds huge amounts of funds owed to various taxpayers, many of which are not aware that they are indeed, owed funds! According to the IRS website, the tax authority has millions of dollars that it owes taxpayers that they are ready to dish out. Unfortunately, if such funds are not claimed within three years, they become the property of the U.S. treasury. If you suspect that you are owed funds from the IRS, you need to check this out in good time before your money gets permanently bequeathed to the treasury. According to the IRS, there are 4 groups of people who account for most of those owed:

1. Withheld Taxes for those below the Tax Threshold

The first category of people who could be owed by the IRS and be unaware of it are individuals who earn wages with employer-withheld taxes. If the income of such individuals is below the threshold of taxation, then they are not required to file a tax return – and many of them do not file one. However, any withheld taxes are moneys owed to these individuals, as their income levels exempt them from paying income taxes. Such individuals will need to file a return to make a claim on these withheld taxes. They may file a tax return for up to 3 years after such taxes are withheld. No penalties or interests are charged to people who are owed refunds by the IRS and therefore, this is a simple and straightforward process.

2. Unpaid Earned Income Tax Credit

Some individuals may also have earned wages below the taxable threshold and may not have had their employers withhold taxes. In this case, such taxpayers need not file a return. However, they may have qualified to claim the Earned Income Tax Credit (EITC). This is a tax credit given to taxpayers who earn below a given cap. This credit is refundable and therefore, individuals who may have not needed to file a return would still qualify for the credit. In such a case, the individual will need to file a return within three years of EITC qualification to get a refund check. To know if you qualified for EITC, you can use an EITC service available at the IRS website.

3. Taxpayer Who Worked Part of the Year

Another category of people who would be owed cash by the IRS are taxpayers who were employed for a short period of time in the year and taxes were withheld from their wages. However, taxes are calculated on an annual bases and therefore, the taxes withheld from the income may have been much more than what was supposed to have been paid. You therefore may be owed some refunds from overpaid taxes that you paid when employed.

4. Refunds not Received

Finally, the IRS also receives many refund checks that have been returned because the addresses they were delivered to were incorrect. Therefore, if you were expecting a refund check for any given year and did not receive the funds, you may check with the IRS for such missing refunds. The IRS website has a section that enables taxpayers to claim for missing refund checks. You will be prompted to indicate your new address and any returned check within the last year will be mailed to the address indicated. You can also call the toll free IRS number to inquire about missing refund checks.

To avoid having refund checks being routed to the wrong address, ensure that you provide the IRS with your new address every time you relocate. You can do this by filing IRS Form 8822, “Change of Address Form”.

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Taxpayer Identification Numbers (TINs) to be Manually Inputted on W-2 Forms

October 17, 2011 By

In a bid to curb taxpayer and tax preparer fraud, the IRS has introduced a new procedure for the preparation of W-2 Forms for taxpayers who use Individual Taxpayer Identification Numbers (ITINs), as opposed to a Social Security Number. Effective from 2011 onward, W-2 Form preparers will need to fill out these Taxpayer Identification Numbers (TINs) manually. Prior to this, the common practice involved having the W-2 Forms filled out electronically either by tax software or payroll software. However, the IRS noted a lot of fraud with the automated process from some questionable tax preparers and at times, from the taxpayers themselves. The IRS made this change of procedure in April 2011, based on its powers under Rev. Proc. 2007-40.

Who Use the ITIN?

The ITIN is given to individuals who do not have a Social Security number and who are not qualified to get a Social Security Number, but are taxpayers. The ITIN is used instead of the Social Security number in W-2 Forms.

What is the Nature of the Number?

The ITIN starts with the number 9 and is a nine digit number. The 4th and 5th slots of this number have numbers that ranged from 70 to 88 only. However, from April of 2011, the IRS increased the range of this fourth and fifth slot to include numbers in the range of 90 to 92 and 94 to 99. This range enables easy identification of the ITIN.

What are the Consequences of Non-Compliance?

According to the IRS, employers and other W-2 preparers may lose their access to e-filing, which will pose an even more complicated situation for these employers, as this may mean manual filing of all W-2 Forms. Failure to follow this rule when preparing W-2 Forms may also lead to a written reprimand from the IRS.

How will Employers Accommodate the Rule?

Tax experts are foreseeing a nightmare in the enforcement of this new rule. Payroll software is usually hard-coded to automate the insertion of the ITIN as well as the Social Security numbers. Those who have purchased W-2 preparation software may therefore, need to consult with the software vendor to have the software skip the ITIN forms and have them listed for manual entry. Those who outsource the process of preparation of these forms may also have to communicate this with the company that handles this and have this process change documented.

What is the Way Forward?

Going forward, the IRS may continually introduce new rules as it works to curb an increasing trend of taxpayer identity and information theft. This may continually impact on the various payroll systems that employers use to automate the preparation processes. Employers therefore, need to factor in such updates and changes when planning their payroll processes.

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