[fname], after attending the tax update seminars there are a couple of items I need to get out to you:

Make sure you let your employees know that they will see less in their net paychecks because the FICA payroll tax rate went up from 4.2% to 6.2%. The 4.2% rate was only for 2011 and 2012.

The IRS has an amnesty program for employers who are treating employees as independent contractors in error. To come clean with the IRS there will be no penalties, no interest, no audit, and the employer would only pay 10% of the payroll taxes to switch the independent contractor to an employee for 2012 amounts.

Of course you would need to begin treating the independent contractor as an employee in 2013. This amnesty program with the IRS is only good until June 30, 2013. Do it now because it takes time to get it all processed. It is IRS Announcement 2011-64. California & the IRS both have a $5,000 penalty for each misclassified employee.

Want to make sure your spouse qualifies for Social Security?  Make sure your spouse works in the business and makes at least $4520 a year in salary, $1130 a quarter. Your spouse in 10 years will have enough credits in their own account in order to receive Social Security Benefits.

If you have any questions after reading this, please reply to this email or give my office a call at (714) 619-0667.


With tax season almost in full swing I will respond as soon as I can.  Thanks,  Monica


Monica Rebella, CPA/IAR
507 E. First Street #A
Tustin,CA 92780
ph (714) 619-0667
Fax (714) 544-0236
email: mrebella@rebellacpa.com

This document was not intended or written to be used, and it cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties.


CONFIDENTIALITY NOTICE-PRIVILEGED AND CONFIDENTIAL. This communication and any accompanying documents are confidential and privileged. They are intended for the sole use of the addressee. If you receive this transmission in error, you are advised that any disclosure, copying, distribution, or the taking of any action in reliance upon this communication is strictly prohibited. Moreover, any such disclosure shall not compromise or waive the attorney-client, accountant-client, or other privileges as to this communication or otherwise. If you have received this communication in error, please contact us by replying to this message and deleting it from your computer. Thank you.