—Best Software’s Abra
Payroll™ for Windows™ Offers
the Best Solution—
As a result of IRS directive 94-48, which becomes effective for
most mid-sized corporations on January 1, 1997, businesses with
payroll tax liabilities of $50,000 or more for the calendar year
1995 must file their payroll taxes electronically. Best’s
Abra Payroll™ for Windows™ is the first PC-based
payroll software to announce plans for satisfying the
federally-mandated requirement this fall, well ahead of the
January 1 deadline.
Who exactly is affected?
Most businesses will be affected by this IRS directive.
Conservative estimates indicate that $150,000 in gross annual
payroll is all it takes to generate a $50,000 payroll tax deposit
liability and, therefore, to require electronic filing of payroll
taxes. Larger employers have been filing electronically for two
years, but the new $50,000 threshold will affect a million
businesses or more.
What if you’re not ready?
Noncompliance can be extremely costly—with penalties of 10%
calculated on the employer’s total federal payroll tax
liability. Not filing electronically carries even higher
penalties than depositing late. A late deposit, filed
electronically, only draws a 2% penalty. The bottom line is that
filing on time with a paper coupon simply will not be a wise
economic choice. You need to prepare for the change from paper to
electronic file.
A Little History: From Paper to Paperless
In 1992, the Internal Revenue Service, together with The
Financial Management Service (FMS), began the process of
eliminating the federal paper-based tax payment system. The
four-phase process targeted employers with the largest payroll
tax deposit liabilities first. On January 1, 1995, employers with
$78 million or more in payroll tax deposits in calendar year 1993
were required to eliminate paper coupons for depositing tax
payments.
The Internal Revenue Service introduced TAXLINK as a prototype
system to test various designs that could be used nationwide.
This year, the IRS unveiled TAXLINK’s successor, EFTPS, or
Electronic Federal Tax Payment System. Today’s system of
choice is EFTPS because IRS requires all TAXLINK taxpayers to
convert to this system.
EFTPS offers you two ways to pay your taxes: ACH Debit or ACH
Credit. In the debit method, you are authorizing the IRS
Financial Agent to take money directly from your bank account. In
the credit method, you must arrange to generate an ACH credit
transaction in the CCD+ TXP format.
Abra Payroll for Windows will support both methods in its system
this fall, so customers can select their method of choice.
The Abra Advantage: Your Best! Solution
As Abra customers, you can elect to begin filing electronically
early with Abra Payroll for Windows this fall. The advantage of
beginning the process early is that, if any hardware or
connection problems arise, there are no penalties for reverting
to paper coupons until January 1, 1997.
"We want to give Abra Payroll customers plenty of time to
become comfortable with the new technology," said Jim
Foster, President of the Abra Products Group. "The IRS
expects the number of electronic filings to increase nearly
twenty times in January. Having the Abra Payroll electronic
deposit solution on the market first puts our clients ahead of
the crowd, prepared for compliance and avoiding costly
penalties."
Abra Payroll for Windows will create compliant files of the
payroll tax liabilities and enable users to send the files
electronically to the employer’s participating bank, as
mandated. It will work as easily as the current ACH direct
deposit features now in Abra Payroll.
The IRS’ demand for electronic filing makes this a critical
decision-making time for payroll executives. "Abra Payroll
is the continuing solution for companies who want total control
over the payroll function today and tomorrow. We are prepared to
give our customers timely compliance as soon as they need it, and
history proves we’ll be here tomorrow with its
solutions," Foster added.
Abra Payroll is the best-in-class system for businesses
processing payroll in-house. Not only that, in-house payroll is a
better solution than third-party processing for businesses who
want the benefit of control coupled with operational savings.
Steps to Prepare for EFTPS
Howard M Haberman Associates, Inc., can
guide you through the electronic filing process with ease, but
keep in mind two basic points:
1. You must complete an EFTPS enrollment form correctly, and
allow 10-12 weeks for it to be turned around by the IRS. When you
receive your approval, you may begin using the system.
2. Prepare to convert to Abra Payroll for Windows.
As soon as you finish reading this newsletter and review your
year-end calendar, call Kathleen Shy at Howard M Haberman
Associates, Inc. to get the ball rolling: [415-666-0699 ext 3]
by Nina Wolfson, Product Marketing Manager of Payroll
Products, Best Software
For Further Information Contact:
Copyright © 1996 Howard M
Haberman Associates, Inc. All rights reserved.
Revised: February 29, 2004.