Filing Your Taxes After A Divorce

Putting the pieces back together after a major life-change like a divorce can be a major challenge. For some people, the aftermath of such a devastating lifestyle change can really set you back, especially if you were the spouse who wasn’t responsible for filing the family taxes at the end of the year.

Should you continue to file as “Head of Household” this year as you did during previous years? How many deductions should you claim now? Have you notified the HR staff at the company you work for? If you have children, who gets to claim them this coming tax season, as well as following years?

Your divorce decree should have most of the answers to your questions, but this might be a great time to hire a Professional Tax Specialist.

If this is the first year since you’ve officially finalized your divorce, you should consider hiring an expert to have at your side during this difficult time. This isn’t the time to simply file a 1040EZ and wait for any refund check to show up at your mailbox. During a time of distress, you should consider hiring a professional tax specialist to help you with your needs while freeing you up to concentrate on other aspects while you continue to balance your work, family and social life.

Padgett Payroll Services can help you with through the difficult time and, if you’re a business owner, they can provide extra help in these additional areas as well:

  • Contract payroll outsourcing
  • Employee payroll
  • Direct deposit
  • Workers’ compensation
  • Payroll tax filing
  • Payroll withholding
  • Online payroll entry
  • IRS form 941 filing

For more than 40 years, Padgett Payroll Services® has been a partner for business owners in all kinds of industries. Our Payroll Specialists serve their clients from more than 400 offices all over the United States and Canada. Let Padgett handle your company’s bookkeeping, tax preparation, financial planning, payroll and financial reporting needs. Call us today at 877-244-5842.

New Payroll Tax Cuts Could Give Economic Boost

It’s long been thought by some government officials that low-income households would spend a tax rebate check quicker than high-income families. While that widely-thought theory makes sense because of the fact that those who are “cash-strapped” would have more of a need for the money than those who are better off financially, an interesting new study shows just the opposite.

The study by the Federal Reserve Bank of New York is based on 200 workers and indicates that high-income workers were more likely to spend the extra cash than their lower-paid counterparts. If these results turn out to be correct, they suggest that payroll tax cuts may do a better job stimulating demand than economists had originally assumed.

The reason for the study is because the Fed is suggesting that an upcoming tax break could significantly boost consumer spending. Apparently of those workers polled in the study, 36 percent.

The Obama Administration proposed the payroll tax cut in an effort to cut taxes by as much as $2,200 per worker and by an average of about $1,000 for a middle-income household. It was meant to be a temporary one-year stimulus, but it appears as though it will also be extended for an extra year.

It appears that a major reason why the results were a bit surprising was due to reasons of scarcity and uncertainty of future earnings for workers. Those people who were worried that the tax cut was only going to last a year were apparently less likely to spend the extra income when it was believed to be only a one-year break.

For more than 40 years, Padgett Payroll Services® has been a partner for business owners in all kinds of industries. Our Payroll Specialists serve their clients from more than 400 offices all over the United States and Canada. Let Padgett handle your company’s bookkeeping, tax preparation, financial planning, payroll and financial reporting needs. Call us today at 877-244-5842.

Pay Raises Make a Slight Comeback

Employee pay stagnated somewhat during the Great Recession, but now pay raises are no longer coming so far apart, according to one non-profit human resources organization.

Employee Pay Increases 2013WorldatWork, an association of HR professionals that compiles employee compensation data, reported that the average worker waited about 12 ½ months get their latest pay raise. Just two years ago, in 2010, the time between pay raises was averaging more than 13 ½ months. Most employers who adjust their salary structures regularly do so at intervals of one to two years, whereas during the recession the average was closer to 2 ½ years. A sizeable minority of employers even waited as long as 3 years between adjustments to their base pay scales.

The average pay raise this year will be about 3 percent, according to WorldAtWork. For comparison, the overall rate of inflation in the United States in November was 1.8 percent. However, unfolding developments in Washington regarding tax policies make appear that an employee who gets a 3 percent raise wouldn’t actually keep most of that money in his or her pocket. The political deal struck on New Year’s Day puts an end to the 2 percent payroll tax holiday, meaning that if nothing is done to lower Social Security taxes again, an employee with an average-sized raise is going to see a big chunk of it withheld by the federal government.

WorldatWork pointed out that some employers will reward star performers with raises about double that of the average worker, however. Employees who receive promotions can expect raises in the 9-10 percent range.

In general, employers are taking a cautious approach because of the slowness of the economic recovery and the widespread belief that it might be torpedoed by Congress’ failure to reach sound compromises on taxes and government spending.  There is also speculation that raises around the 3 percent level are going to become the “new normal,” rather than rebounding to averages as high as 4.5 percent that held sway for the two decades up until 2009.

In 2009, the average employee raise sunk to a 39-year low of just 2.2 percent. That year, one-third of employers surveyed expected to keep their salary levels steady, whereas this year only 5 percent are keeping their compensation frozen.

As far as timing for those getting raises, WorldatWork says that more companies are moving to a system in which all wage and salary bumps are given at the same time, usually in January or sometime during the first quarter of the year.

An essential part of any company’s compensation program is getting employees paid accurately and on time. Of course, as a small business owner, you have plenty of other things to think about, especially in these changing and uncertain times. That’s where Padgett Payroll Services comes in. We take the stress of payroll processing off of the shoulders of thousands of small business owners all over North America, and at affordable rates. Visit the Padgett website or call us at 877-244-5842 today to get started!