e-News for Payroll Professionals

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Issue Number:  2018-8

Inside This Issue

1. Form W-4 for 2019 will be similar to 2018 version
2. Filing extensions for Forms W-2 and 1099-MISC are not automatically approved
3. Large employers can now e-file their employment tax returns
4. Educate your clients, employees and partners about estimated taxes
5. Get a sneak peek at a new e-Services user agreement
6. Report data thefts immediately; stop fraudulent tax returns
7. New forms, instructions and pubs on IRS.gov

Following feedback from the payroll and tax communities, the Treasury Department and the IRS will incorporate important changes into a new version of the Form W-4, Employee’s Withholding Allowance Certificate, for 2020. The 2019 version of the Form W-4 will be similar to the current 2018 version. A new draft version of the W-4 for 2019 will be available in the coming weeks. 

The IRS will continue working closely with the payroll and the tax community as it makes additional changes to the Form W-4 for use in 2020. The new version will help employees improve withholding accuracy, and fully reflect changes included in the Tax Cuts and Jobs Act.

For the current 2018 tax year, the IRS continues to strongly urge taxpayers to review their tax withholding situation as soon as possible to avoid having too little or too much withheld from their paychecks. Click here to perform a quick “paycheck checkup” using the IRS withholding calculator. 

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Treasury Decision 9838, Extension of Time to File Certain Information Returns (found in Internal Revenue Bulletin 2018-34), is the final ruling and clarifies that extension requests for Forms W-2 and 1099-MISC will not be automatically approved.

Requests for extensions must meet specified criteria and be requested on Form 8809, Application for Extension of Time to File Information Returns, before the January 31 deadline to file. This will deter identity theft and refund fraud. Requests for extensions of the filing deadline have no effect on the deadline to furnish forms to recipients.

The IRS will create a revised Form 8809 for the 2019 filing season that will provide checkboxes for employers to show the reasons they’re asking for an extensions.

Stay tuned to e-News for Payroll Professionals for an announcement of the revised Form 8809 expected sometime in late fall of 2018.

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Employers who meet the definition of “large employers” now have the option to e-file their employment tax returns (e.g., Forms 940, 941) without the need for a third party.

These large employers are generally required to e-file other returns, such as Form 1120. To do this, they use Form 8453 for the signature, electronically attach it to their tax return, and use their e-file software to file.

Similarly, they may now e-file their employment tax returns. Simply use Form 8453-EMP, Employment Tax Declaration for an IRS E-file Return, for the signature, and electronically attach it to the employment tax return. Then e-file it using the same software used to electronically file other tax returns.

This option is available now, so large employers may use it to e-file their third quarter employment tax returns due in October.

Find more information and the definition of a large employers in section 5 of Pub 4163, Modernized e-File (MeF) Information for Authorized IRS e-File Providers for Business Returns.

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The U.S. tax system is pay-as-you-go. Taxes must be paid as income is earned or received during the year. Help us teach the nearly 10 million taxpayers that faced an estimated tax penalty last year how they can prevent these penalties.

You can help by informing taxpayers how they can adjust paycheck withholding amounts or make estimated tax payments.

Also remember, the Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding.

Ensure your clients, employees and partners are spared tax-related “surprises” in 2019 by passing on these easily sharable YouTube videos, drop-in articles, tax tips and news releases with links to Spanish versions, online tools and lots more information:

• Avoid penalty for underpayment of taxes; IRS says check withholding, make estimated payments
• Taxpayers should find out if they need to make estimated or additional tax payments
• Here’s how and when to pay estimated taxes
• Employees with other sources of income should do a Paycheck Checkup
• Retirees: Avoid a surprise tax bill; get enough tax taken out of pension payments; IRS Withholding Calculator can help
• IRS YouTube videos: “Estimated Tax Payments”
  English | Spanish | ASL
• Drop-in articles posted to the Tax Reform Resources page 

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The IRS is updating its e-Services user agreement to improve security for everyone. e-Services is a suite of web-based tools that allow tax professionals, reporting agents, mortgage industry, payers and others to complete transactions online with the IRS.

Beginning October 14, e-Services users accessing their accounts will see a pop-up box asking them to accept the terms of an updated user agreement.

The IRS strongly encourages everyone to review this content beforehand and be ready to accept its terms when asked after Oct. 14. The user agreement is not long, and may require some payroll professionals to review how they conduct business.

Find a sneak peek at Preview Updated e-Services User Agreement; Launch Set for October 14 or visit www.irs.gov/eservices.

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Cybercriminals continue to evolve and data theft at payroll professionals’ offices is on the rise. Thieves use stolen data to create fraudulent returns that are harder to detect.

Although the IRS and its Security Summit partners are making progress against tax-related identity theft, the IRS reminds professionals to report data theft immediately and follow the necessary steps to help the IRS protect their clients. If notified timely, the IRS can stop fraudulent tax returns.

Take a moment to review all 10 installments of the Protect Your Clients; Protect Yourself: Tax Security 101 series and arm youself, and your clients, with knowledge.

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Forms:

• Form W-2, Wage and Tax Statement (Info Copy Only) 

Instructions:

• Inst W-2 and W-3, Instructions for Forms W-2 and W-3, Wage and Tax Statement and Transmittal of Wage and Tax Statements

Pubs:

• Pub 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G
• Pub 1494, Table for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS))
• Pub 1693, SSA/IRS Reporter Newsletter  ̶  Summer 2018

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