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Wednesday, January 15, 2014

New Year Tips for Employers and Employees

 As 2013 has come to a close and 2014 is getting started, here are some important things to consider for both employers and employees.....

First, it is good practice for all employers to issue their employees a new form W-4 to fill out at the start of each year.  This provides the employee with an opportunity to update their information and change their withholding allowances based on how their prior year taxes turned out as well as update any name and address changes they had from the prior year. However you might feel that filling out one of these W-4 forms is not quite as simple as it would seem. The basic rule to remember is that the lower the number of allowances claimed, the higher the amount of Federal and State taxes that will be withheld from each paycheck.  Employees need to consider such things as: spouse's income and also, if they have activities in their lives generating income or loss outside of their W-2 jobs. For help and additional assistance on filling out the form W-4 please feel free to contact us.

The next issue is tax rates, which it seems are always changing.  For 2014, the employee Social Security tax rate will remain at 6.2% with the employer match also being 6.2%.  Medicare remains at 1.45% for both employee and employer.  Federal Unemployment Tax rate for those employers in MT is still at .6% paid on the first $7,000 of wages paid to each employee in the year.  Montana Unemployment tax rate varies per employer but the wage base is increased to $29,000 in 2014 where it was $27,900 in 2013. This means that Montana Unemployment is paid on the first $29,000 of wages an employee earns in 2014.

Finally, as of January 1st, the minimum wage increased in Montana by $.10 from $7.80 to $7.90 per hour.  Early release copies for 2014 percentage method tax tables are available to be viewed on the internet but employers may continue to use the 2013 tables until the complete 2014 tables are released a little later this year.

For any further questions please feel free to contact us.  We are always happy to help!