Real Business Solutions

The state of California has issued the 2010 payroll withholding tables, effective for wages paid on and after January 1, 2010.  California provides two methods for determining the amount of wages and salaries to be withheld for state personal income tax:

METHOD A provides a quick & easy way to select the appropriate withholding amount, based on the payroll period, filing status, and number of withholding allowances (regular and additional) if claimed. The STANDARD DEDUCTION and EXEMPTION ALLOWANCE CREDIT are already included in the wage bracket tables. Even though this method involves fewer computations than Method B, it cannot be used with your computer in determining amounts to be withheld.

METHOD B may be used to calculate withholding amounts either manually or by computer using a payroll software. This method will give an exact amount of tax to withhold. To use this method, you must enter the payroll period, filing status, number of withholding allowances, standard deduction, and exemption allowance credit amounts.

Our Payroll Mate payroll system uses Method B to calculate California withholding. To learn more about our product and to download a free demo please go to www.realtaxtools.com  .

The IRS has released a new revenue procedure (IRB 2009-45), which sets forth the procedures for employers to follow to request to file Form 944, Employer’s ANNUAL Federal Tax Return (i.e., to opt in). In addition, this revenue procedure sets forth the procedures for employers who previously were notified to file Form 944 to follow to request to file Forms 941, Employer’s QUARTERLY Federal Tax Return, instead (i.e., to opt out).

Requests to File Form 944 (opt in to filing Form 944): Upon request by qualified employers, the IRS will notify employers in writing of their qualification to file Form 944. Employers may request to file Form 944 by contacting the IRS at the appropriate telephone number or mailing address, by the applicable due date. Employers must not file Form 944 unless they receive notification that they are eligible to do so (form 944 eligibility). Employers who previously received notification of their qualification to file Form 944 must continue to file Form 944 unless the IRS notifies the employer that the employer no longer qualifies to file Form 944 or the employer opts out.

Requests to File Forms 941 (opt out of filing Form 944): Employers who previously were notified to file Form 944 but want to file Forms 941 instead must call or write the IRS stating that they want to opt out of filing Form 944 before the applicable due date. The IRS will send written notification to employers that their filing requirement was changed to Forms 941. Employers who were notified of their qualification to file Form 944 but do not receive notification that their filing requirement was changed to Forms 941 must file Form 944 rather than Forms 941.

For more information about the due date to opt-in/ opt-out of filing Form 944 please visit the IRS website.

Our form 941 software prepares IRS forms 941, 940, 944, W2 and W3. To download a free payroll software demo, please go to www.realtaxtools.com .