Accountant's Corner
(revised January 2008)
 

• 2008 Social Security Tax Limits

• 2008 Retirement Contribution Increases

• Identity Theft - Social Security Numbers

• IRS Offers Online Id Numbers 

• Tip Allocation

• 2008 Business Mileage Rate

• Michigan Unemployment Agency Phone Numbers

IRS Announces 2008 Social Security Tax Limits

The wage limit for Social Security taxes in 2008 has been set at $102,000.00.  The maximum tax to be withheld from employees is $6,324.00.  The rate remains 6.2%.  The Medicare rate is 1.45% and is unlimited.

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2008 Retirement Contribution Limits

Maximum contributions remain the same as 2007.  The limits for those under age 50 and the catch up amount for those 50 and over are as follows:

• SIMPLE IRA’s are $10,500 plus an additional $2,500 catch up if 50 or older.

• 401(k)’s are $15,500 plus an additional $5,000 catch up if 50 or older.
   

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Identity Theft - Social Security Numbers

Beginning January 1, 2006, it is no longer permissible to include more than 4 digits of an employee's social security number on any 'external' documents.  This includes check documents, pay stubs, employee badges, time cards, etc.  Accordingly, we have removed the option of including an employee's social security number on their pay stub.  This doesn't mean that 'internal' documents may not include the number - such as payroll journals, employee time journals, etc.

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IRS Offers Online Id Numbers

The IRS now lets businesses obtain employer identification numbers directly from its website.  New business owners can go to www.irs.gov via the internet.  Enter 'EIN' as the keyword (upper right hand corner) to begin the process.  No registration is required and the number is issued immediately.  The EIN online processing eliminates the need to call or send paperwork to the IRS, and prevents processing and mail delays. While the internet may be the preferable way to apply, businesses may still obtain a number by telephone at (800) 829-4933.
 

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Tip Allocation

All employers that have an establishment where tipping is a customary practice should consider whether to file form 8027.  The tip allocation form is to be completed by employers with more than 10 people, who commonly worked more than 80 hours in a day during the preceding year.  This means that all employees, not just the tipped employees, are counted in the ten and 80 requirement.  The instructions for form 8027 includes a worksheet for determining whether the 80 hour limit has been reached.  The Michigan Restaurant Association has classes for it's members on tips and tip allocation.

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2008 Business Mileage Rate:
The IRS business mileage rate has been set at 50.5 cents per mile.

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Michigan Unemployment Agency Phone Numbers
 

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