July 2016 Tax News
Will you be ready for the new overtime pay rules?
In May, the Department of Labor updated the rules for paying overtime. Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That is double the annual exempt amount of $23,660 from previous rules.
In addition, the total annual pay for an exempt highly compensated employee is $134,004 (up from 100,000 previously). These amounts will be updated automatically every three years beginning in 2020.
The changes take effect December 1, 2016, which means you need to begin reviewing your payroll now, as penalties and fines can be assessed for noncompliance. One important step is to begin tracking hours for your salaried employees. You will also want to review your payroll practices so you can determine the best options for your business as you get ready to implement the new rules.
Form 5500 Filing Reminder and Changes to Note
August 1, 2016, is the deadline for filing retirement or employee benefit returns (5500 series) for plans on a calendar year. (The usual due date of July 31, 2016, is a Sunday.)
You will also want to note two IRS updates regarding Form 5500. First, the compliance questions are optional. Form 5500 includes new compliance questions for 2015 tax years (returns with a due date of August 1, 2016, for calendar year filers). Because the questions were not approved by the Office of Management and Budget, the instructions for Form 5500 say plan sponsors should skip them when completing the form.
In addition, some Form 5500-EZ filers will need to file electronically. If you are required to file at least 250 returns of any type with the IRS, including information returns , you may need to electronically file Form 5500-EZ for calendar year 2015. Examples include Form W-2 and Form
Contact us today if you have any questions about the new overtime pay rules or questions about filing form 5500. We are here to help.