This page (revision-7) was last changed on 26-Nov-2021 10:22 by jescott

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US Self Adjust Tax Method
US Self Adjust Tax Method

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At line 50 changed 2 lines
;Self Adjust’ Definition: The ‘Self-Adjust’ method evaluates the YTD Earnings and YTD tax amounts every pay to ensure they are consistent and correct at each pay with a given tax rate until all Subject Earnings reach the Annual Maximum Earnings. This facilitates the accurate tax information for the monthly, quarterly reporting and the annual year-end report of W2 \\ \\ At each pay, when user is verifying the Pay Register’s Subject Earnings, the Subject Earnings is derived from current pay’s earnings less taxable benefits \\ \\At each pay, when user is verifying the Pay Register’s tax result, the tax amount is the result of the current pay’s Subject Earnings multiply by rate and the adjusted YTD tax amount \\ \\Therefore user must verify from both the YTD value and CTD value, it is not just Subject Earnings * Rate
\\
__‘Self Adjust’ Definition__ \\
At line 53 changed one line
;‘No Self Adjust’ Definition: The ‘No Self-Adjust’ method does not evaluate the YTD Earnings and YTD tax amounts every pay, it takes the CTD Subject Earnings multiply by the rate until all Subject Earnings reaches the Annual Maximum Earnings. This ensures the Annual Maximum Earnings and Deductions are capped and allowing multiple rates to be used for a tax type. This facilitates the accurate tax information for the monthly, quarterly reporting and the annual year-end report of W2 \\ \\At each pay, when user is verifying the Pay Register’s Subject Earnings, the Subject Earnings is derived from current pay’s earnings less taxable benefits \\ \\At each pay, when user is verifying the Pay Register’s tax result, the tax amount is the result of the current pay’s Subject Earnings multiply by rate
The ‘Self-Adjust’ method evaluates the YTD Earnings and YTD tax amounts every pay to ensure they are consistent and correct at each pay with a given tax rate until all Subject Earnings reach the Annual Maximum Earnings. This facilitates the accurate tax information for the monthly, quarterly reporting and the annual year-end report of W2
At line 54 added one line
At each pay, when user is verifying the Pay Register’s Subject Earnings, the Subject Earnings is derived from current pay’s earnings less taxable benefits
At line 56 added 12 lines
At each pay, when user is verifying the Pay Register’s tax result, the tax amount is the result of the current pay’s Subject Earnings multiply by rate and the adjusted YTD tax amount
Therefore user must verify from both the YTD value and CTD value, it is not just Subject Earnings * Rate
__‘No Self Adjust’ Definition__ \\
The ‘No Self-Adjust’ method does not evaluate the YTD Earnings and YTD tax amounts every pay, it takes the CTD Subject Earnings multiply by the rate until all Subject Earnings reaches the Annual Maximum Earnings. This ensures the Annual Maximum Earnings and Deductions are capped and allowing multiple rates to be used for a tax type. This facilitates the accurate tax information for the monthly, quarterly reporting and the annual year-end report of W2
At each pay, when user is verifying the Pay Register’s Subject Earnings, the Subject Earnings is derived from current pay’s earnings less taxable benefits
At each pay, when user is verifying the Pay Register’s tax result, the tax amount is the result of the current pay’s Subject Earnings multiply by rate
At line 61 changed 5 lines
# Change of Earnings Element set up, e.g. user forgets to include a pay component in the Pre-Earnings Element
# Change of Benefits Element set up, e.g. user forgets to include a pay component in Pre-Benefits Element, i.e. 125 or 401K
# Negative YTD Benefit amount, e.g. an Adjustment pay is refunding 125 plan or 401K for rehired employee
# When paying a Hand Check, e.g. a hand check is issued quickly with some estimated amounts, then user expects UPCALC to use Self-Adjust methods to calculate the correct tax amounts in the following pay
# Employee is changed from Exempt Employment to Non-Exempt Employment, or vice versa
\\
1. Change of Earnings Element set up, e.g. user forgets to include a pay component in the Pre-Earnings Element\\
At line 76 added 8 lines
2. Change of Benefits Element set up, e.g. user forgets to include a pay component in Pre-Benefits Element, i.e. 125 or 401K\\
3. Negative YTD Benefit amount, e.g. an Adjustment pay is refunding 125 plan or 401K for rehired employee\\
4. When paying a Hand Check, e.g. a hand check is issued quickly with some estimated amounts, then user expects UPCALC to use Self-Adjust methods to calculate the correct tax amounts in the following pay\\
5. Employee is changed from Exempt Employment to Non-Exempt Employment, or vice versa\\
At line 82 changed one line
Employee is paid the first pay in year 2012, UPCALC Pay Register shows the Subject Earnings of FUTA, Medicare, FICA are correct after applying 125 plan, 401K, Custom benefits and Imputed income
- Employee is paid the first pay in year 2012, UPCALC Pay Register shows the Subject Earnings of FUTA, Medicare, FICA are correct after applying 125 plan, 401K, Custom benefits and Imputed income
At line 84 changed one line
IPRLU FUTA, Medicare and FICA are calculated with Self Adjust Methods, for this first pay of the year, tax results are simply equal to Subject Earnings * Rate \\
- IPRLU FUTA, Medicare and FICA are calculated with Self Adjust Methods, for this first pay of the year, tax results are simply equal to Subject Earnings * Rate
6030 Medicare EE 35.34 (correct)
8031 Med EE Earns 2437.52 2437.52 * 0.0145 = 35.34
At line 86 changed 2 lines
*PC 6030 Medicare EE $35.34 (correct)
*PC 8031 Med EE Earns $2437.52 (2437.52 * 0.0145 = 35.34)
6031 FICA EE 102.38 (correct)
8037 FICA EE Earns 2437.52 2437.52 * 0.042 = 102.38
At line 89 changed 2 lines
*PC 6031 FICA EE $102.38 (correct)
*PC 8037 FICA EE Earns $2437.52 (2437.52 * 0.042 = 102.38)
7030 Medicare ER 35.34 (correct)
8035 Med ER Earns 2437.52 2437.52 * 0.0145 = 35.34
At line 92 changed 2 lines
*PC 7030 Medicare ER $35.34 (correct)
*PC 8035 Med ER Earns $2437.52 (2437.52 * 0.0145 = 35.34)
7031 FICA ER 151.13 (correct)
8039 FICA ER Earns 2437.52 2437.52 * 0.062 = 151.13
At line 95 changed 2 lines
*PC 7031 FICA ER $151.13 (correct)
*PC 8039 FICA ER Earns $2437.52 (2437.52 * 0.062 = 151.13)
7032 FUTA ER 12.57 (correct)
8027 FUTA EARN 2095.05 2095.05 * 0.006 = 12.57
At line 98 changed 2 lines
*PC 7032 FUTA ER $12.57 (correct)
*PC 8027 FUTA EARN $2095.05 (2095.05 * 0.006 = 12.57)
- UPCLOZ is run and YTD records are created for 2012
At line 101 changed one line
UPCLOZ is run and YTD records are created for 2012
- then suppose a mistake was made in this pay with some earnings and taxable benefits, therefore an Adjustment Pay is issued to correct the YTD Subject Earnings and taxable benefits
At line 103 changed one line
Then suppose a mistake was made in this pay with some earnings and taxable benefits, therefore an Adjustment Pay is issued to correct the YTD Subject Earnings and taxable benefits
- please see below for the YTD Adjustments, then after the Adjustment pay, when a regular pay is paid, the Self-Adjust method will adjust FUTA, FICA, Medicare contributions
At line 105 removed 2 lines
Please see below for the YTD Adjustments, then after the Adjustment pay, when a regular pay is paid, the Self-Adjust method will adjust FUTA, FICA, Medicare contributions
At line 109 changed one line
Assume the Regular Earnings were overpaid by $200.00, Supplemental Earnings was overpaid by $100.00, therefore the negative earnings are entered as Reg Earns = $-200.00, Sup Earns = $-100.00
- Assume Regular Earnings was overpaid by 200.00, Supplemental Earnings was overpaid by 100, therefore negative earnings are entered as Reg Earns = -200.00, Sup Earns = -100.00
At line 111 changed one line
Assume the 125 plan and 401K plan were over deducted, therefore negative 125 and 401K are entered to refund the employee, 125 plan = -20.00, 401K = -10.00
- Assume 125 plan and 401K plan were over deducted, therefore negative 125 and 401K are entered to refund the employee, 125 plan = -20.00, 401K = -10.00
At line 113 changed one line
In this Adjustment pay, the Subject Earnings are adjusted as follow:
- in this Adjustment pay, the Subject Earnings are adjusted as follow:
At line 115 changed 25 lines
*PC 8005 FIT EARN $-180.00
*PC 8015 FSP EARN $-90.00
**FIT Earn = Reg Earn – Benefits portion of Reg Earn
**FSP Earn = Fsp Earn – Benefits portion of Fsp Earn
**Total Pre-tax Benefits for Fed tax = 125 plan + 401K
***= -20 + (-10) = -30
**Benefits portion of Reg Earn = Reg Earn / (Reg Earn + Sup Earn) * Taxable Benefits
*** = -200 / (-200 + -100) * -30
*** = -200 / -300 * -30
*** = -20
**FIT Earn = -200 – (-20) = -180 (correct)
**Benefits portion of Sup Earn = Sup Earn / (Reg Earn + Sup Earn) * Taxable Benefits
*** = -100 / (-200 + -100) * -30
*** = -100 / -300 * -30
*** = -10
**FSP Earn = -100 – (-10) = -90 (correct)
*PC 8027 FUTA EARN $-280.00
**FUTA Earn = (Reg Earn + Sup Earn) – 125 plan
*** = (-200 + -100) – (-20)
*** = -300 – (-20)
*** = -280 (correct)
*PC 8031 Med EE Earns $-280.00 = similar to FUTA Earn
*PC 8035 Med ER Earns $-280.00 = similar to FUTA Earn
*PC 8037 FICA EE Earns $-280.00 = similar to FUTA Earn
*PC 8039 FICA ER Earns $-280.00 = similar to FUTA Earn
8005 FIT EARN -180.00
8015 FSP EARN -90.00
At line 141 changed one line
After UPCLOZ, the YTD amounts will be adjusted to reflect this Adjustment pay
FIT Earn = Reg Earn – Benefits portion of Reg Earn
FSP Earn = Fsp Earn – Benefits portion of Fsp Earn
Total Pre-tax Benefits for Fed tax= 125 plan + 401K
= -20 + (-10) = -30
Benefits portion of Reg Earn = Reg Earn / (Reg Earn + Sup Earn) * Taxable Benefits
= -200 / (-200 + -100) * -30
= -200 / -300 * -30
= -20
FIT Earn = -200 – (-20) = -180 (correct)
At line 143 changed 9 lines
*PC 3001 125 Plan 152.22 + (-20) = $-132.22 (correct)
*PC 3002 401K Plan 127.31 + (-10) = $-117.31 (correct)
*PC 8005 FIT EARN 2024.41 + (-180.00) = $1844.41 (correct)
*PC 8015 FSP EARN 0 + (-90.00) = $-90 (correct)
*PC 8027 FUTA EARN 2095.05 + (-280.00) = $1815.05 (correct)
*PC 8031 Med EE Earns 2437.52 + (-280.00) = $2157.52 (correct)
*PC 8035 Med ER Earns 2437.52 + (-280.00) = $2157.52 (correct)
*PC 8037 FICA EE Earns 2437.52 + (-280.00) = $2157.52 (correct)
*PC 8039 FICA ER Earns 2437.52 + (-280.00) = $2157.52 (correct)
Benefits portion of Sup Earn = Sup Earn / (Reg Earn + Sup Earn) * Taxable Benefits
= -100 / (-200 + -100) * -30
= -100 / -300 * -30
= -10
FSP Earn = -100 – (-10) = -90 (correct)
At line 150 added 26 lines
8027 FUTA EARN -280.00
FUTA Earn = (Reg Earn + Sup Earn) – 125 plan
= (-200 + -100) – (-20)
= -300 – (-20)
= -280 (correct)
8031 Med EE Earns -280.00 = similar to FUTA Earn
8035 Med ER Earns -280.00 = similar to FUTA Earn
8037 FICA EE Earns -280.00 = similar to FUTA Earn
8039 FICA ER Earns -280.00 = similar to FUTA Earn
- after UPCLOZ, the YTD amounts will be adjusted to reflect this Adjustment pay
3001 125 Plan 152.22 + (-20) = -132.22 (correct)
3002 401K Plan 127.31 + (-10) = -117.31 (correct)
8005 FIT EARN 2024.41 + (-180.00) = 1844.41 (correct)
8015 FSP EARN 0 + (-90.00) = -90 (correct)
8027 FUTA EARN 2095.05 + (-280.00) = 1815.05 (correct)
8031 Med EE Earns 2437.52 + (-280.00) = 2157.52 (correct)
8035 Med ER Earns 2437.52 + (-280.00) = 2157.52 (correct)
8037 FICA EE Earns 2437.52 + (-280.00) = 2157.52 (correct)
8039 FICA ER Earns 2437.52 + (-280.00) = 2157.52 (correct)
At line 155 removed 2 lines
#When FUTA, FICA, MEDI Tax Method = ‘No Self Adjust’
This page (revision-7) was last changed on 26-Nov-2021 10:22 by jescottTop