e-Newsletter, December18, 2006

Roundtable Software Newsletter #44, December 18, 2006

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In this issue...

Bank Rec for Windows Beta Testing Ends Soon!
The beta testing period for our new Windows-based Bank Reconciliation module ends on December 31st. If you have enrolled for the beta test we ask that you submit your completed test form (included with the beta test in the PDF file) by that time. End-users who submit completed forms by this date will be eligible for the special discount discussed in the email that accompanied your testing instructions.

Beta testers thus far have reported only a few isolated problems, all of which have been corrected, so barring unforeseen developments we expect to be shipping the full release version of the product in January.

Patch 28 Released
Click Here To Download This Patch
Be sure to review the instructions for loading this patch; it involves more that just the program files being updated!
There were a number of changes to Payroll for creating 2006 W-2s and for next year's tax calculations. Please be sure to download and install this patch before attempting to print W-2s.

Changes are:

  • Two new pre-tax deduction types are now to be reported on W-2s; Roth 401(k) and Roth 403(b). These used to be reported with regular 401(k) and 403(b) deductions but this year they have been split out. They now print in box 12 of the W-2 with, respectively, codes AA and BB.

    In order to have the Payroll system properly recognize and categorize these deductions, if you have them, you will have to go into Payroll program 50, System Defaults, and select the Pre-Tax Deductions option. For any deduction that is a Roth 401(k) or Roth 403(b), you will need to change the "Code on W-2" field from 1 and 2 to 6 and 7.

  • W-2s now have a separate area set aside where employee name suffixes (Jr., III, etc) are printed separate from the rest of the name. Though using this split name is optional this year, it will be required eventually. It is already a requirement for eFile reporters.

    In order to deal with this new W-2 field we have added new fields to the Employee Master for First Name, Middle Name, Surname and Suffix. These are in addition to the regular Employee Name field which will remain and be used for all other purposes in the Payroll module. In order to print W-2 forms, you MUST fill in these fields--the W-2 printing routine will not generate W-2s using the regular employee name field any longer.

    Before you start cursing us for making you retype all those names, there is good news. We have added a new option in program 26, Tax Forms, called Set Form Names. This option will attempt to automatically fill in the new Form Name fields based on your existing employee names. Assuming you've entered your employee names in one of the two recognized consistent formats:

    [Last Name], [First Name] [Middle (optional)], [Suffix (optional)]
    [First Name] [Middle Name (optional)] [Last Name] [Suffix (optional)]

    you should be able to use this option to automatically set close to 100% of the new form names fields.

    When the new option is run, it presents each proposed form name to you so that you can approve or decline the setting of the name. If you decline any, either because the program was unable to interpret the Employee Name as you wish, or because you wish to get better name information from the employee, you should write down the names that you intend to set manually. Keep in mind that any employee who doesn't get a form name will print on the W-2 with no name!

    In a test run on a 100 employee payroll we found that we were able to convert all the names, including a few that needed to be dealt with manually, in about ten minutes, so dealing with this new feature should not be an undue burden on even really large payrolls.

    For more information on converting the employee names, including what types of names will cause problems for the automatic processor, see the help article at the Employee Name Format prompt under the Set Form Names option in program 26

  • In 2007 the revised Alabama state tax withholding calculation make it impossible to calculate their taxes with any degree of accuracy with our current tax table structure. In order to calculate the Alabama taxes we therefore had to add an entire new page of calculation options in program 2, Deduction Tables. These options provide for giving the employee allowances based on their gross wages and their number of dependents. We are not aware of any other state that will make use of the new calculations, but you may have local or employee-specific deductions that may be able to make use of the new features. To learn more about the new calculations, see the section titled "How the New Allowance Page of the Deduction Table Calculates" later on in this newsletter.

  • Payroll program 58 has been changed to have a single option for transferring tax tables (rather than the Tax Transfer 1 and Tax Transfer 2 previously used). There are also no longer two tax table files for Payroll (they were ADPRTAX1.DAT and ADPRTAX2.DAT). There is now a single file containing all tax tables named ADPRTXTB.DAT. The need for two tax table files dated from before some of you were born, when 5 1/4" floppy disks could hold a file no larger than 160 Kb. If you remember these disks you can consider yourself officially over the hill (but don't feel bad, we remember them, too).

    Since the old tax table files will no longer be used, you may delete them from your RTS-Advantage SYS directory.

  • Many revised tax tables are included in the patch. States that have reported revisions of their calculations for 2007 are Alabama, California, Hawaii, Kentucky, Maine, Michigan, Minnesota, Nebraska, New Mexico, North Carolina, North Dakota, Oregon, Puerto Rico, Utah and Vermont.

    Connecticut's tables have not changed since 2006, but we have included revised tables in this release that take advantage of the new allowance screen to better calculate the tax amount. However, because Connecticut's tax calculation still requires a very unusual calculation for personal tax credits, we continue to supply only one sample table for each employee classification, for one of the larger ranges of wages amounts. Employers in Connecticut will have to create additional tables for employees with gross wages not covered by our sample tables. New tables created should be identical to the sample tables, but on the final credit screen replace the tax credit percentage with the correct tax credit percentage to apply based on the employee's gross wages (see table B in Connecticut's Circular CT publication).

    Maryland's tax rates are unchanged since 2005, but the tables have been changed in this latest release to yield more accurate tax calculations.

    In addition to the above states, t
    he federal FICA and FWT tables have been updated for 2007.

  • Along with all the Payroll changes, there is one additional item in the patch; a fix for a problem in the File Maintenance module where using the Delete option on a keyed file in Unix was causing errors.
Click Here to check versions for this patch.
Click here to download this patch and be sure to read the instructions on how to load this patch.

W2 Preparation Checklist
Click here to download a PDF of this checklist.
Before you attempt to print 2006 W-2s, be sure to follow this checklist of procedures:
  1. Download and install Patch 28.

  2. Run System Administrator program 7 to update your Payroll data and print layout files.

  3. Run System Administrator program 8, Reorganize, and program 9, Relink, to ensure that your data files are clean and error-free.

  4. If you have a company-specific print layout file for your Payroll, go to System Administrator program 11 and copy the new W-2 report format for 2006 into your print layout file. DO NOT attempt to print W-2s without doing this step--they will not print correctly if you use last year's format, even if it has been converted in System Administrator program 7.

  5. If you have Roth 401(k) or Roth 403(b) deductions, go to Payroll program 50, the Pre-Tax Deductions option, and set the deductions so that they will print properly on W-2s. For instructions on this, see the discussion in the first bullet point above for the patch.

  6. Go to Payroll program 26 and choose the Set Form Names option to populate the Employee Form Names (again, see above for a discussion of this step). Be sure to have a pad handy to write down any names that need to be converted manually.

  7. Go to Payroll program 6, Employees, and set any Form Names that were not handled in step #6.

eFile Prep Available for Pre-Orders
As discussed in the previous newsletter, there will be no DOS or Unix character-based version of the MMRS package available this year. The new version, now named Federal & State eFile Prep, is a Windows-based application, part of our new Windows-based interface.

This application is required for those who submit 250 or more W-2s or 1099-MISC forms to the federal government, and is highly recommended even for those who submit less as a convenient alternative to producing and filing stacks of paper forms.

The 2007 edition of Federal & State eFile Prep takes into account all changes instituted by the IRS and SSA for 2006 filing, of which there were quite a few. DO NOT attempt to use a previous year's version of the program as it does not conform to the 2006 submittal format and will be rejected by the IRS/SSA.

The 2007 edition of the Federal & State eFile Prep also includes a new option for submitting the non-standard state electronic return now required by the state of California.

This edition does assume that you have installed our patch #28 and will not work correctly without that patch installed.

The application will be released by the end of this year, with a suggested retail price of $595. Your dealer is accepting pre-orders now.

RTS-Advantage for Unix Now Available on CD
RTS-Advantage version 4 is now available on CD-ROM as well as 3.5" diskette. The CD-ROM distribution uses the standard Unix Rock Ridge CD format. When ordering Unix product please state your preference.

How The New Allowance Screen of the Payroll Tax Tables Work
Click here to download a PDF of this discussion.
The new allowance page has been created in order to comply with the newly revised Alabama state withholding tax instituted for tax year 2007. However, it may well have application outside of that calculation.

First of all, it is important to understand that all the calculations this screen performs are based on the employee's gross wages being within a certain range. This determination is ALWAYS based on gross--it does not matter whether the overall table is a Gross, Net or As Is table. The gross wages that are used are based on whether the overall table is annualized or not. If the table is not annualized, the gross used is that on the employee's current check; otherwise the gross is calculated as the pay period gross wages multiplied by the number of pay periods per year.

All amounts calculated on this screen are added to those calculated on the first screen of the deduction table, and this combined result is fed into the table calculation, which used to be the second screen but is now the third.

The top portion of the allowance screen calculates general allowances based on gross wages, the bottom half calculates allowances based on gross wages and the employee's declared number of dependents.

Allowances Based on Gross Wages
The top portion of the screen performs up to four calculations, one for each line provided. A given allowance calculation may calculate on any or all of the four lines -- if the employee's gross wages fall within the ranges of multiple lines, the amounts calculated will be additive. Each line calculates as follows:

  1. If the employee's gross wages (annualized or for the pay period) do not fall within the minimum and maximum gross wages range, stop.

  2. If the Per Amount field is set to 0.00, simply add the Add Amount to the total calculated for the screen. Stop.

  3. If the Per Amount is non-zero, subtract the Minimum Gross from the employee's gross wages.

  4. Divide this result by the Per Amount figure.

  5. Round the result to an integer, always rounding down.

  6. Multiply this result by the Add Amount and add that result to the total calculated on the screen.

Here's an example:

The taxing authority states that an employee making between $20,000 and $30,000 per year gets an allowance of $1500 less $25 per $500 of the amount over $20,000.

This calculation would require two lines. The first line would provide a flat allowance of $1500:

Minimum Gross: $20,000
Maximum Gross: $30,000
Add Amount: $1500
Per Amount: $0

The second line would deduct $25 per $500 of the amount over $20,000:

Minimum Gross: $20,000
Maximum Gross: $30,000
Add Amount: $-25 (notice we are adding a negative amount)
Per Amount: $500

Allowances Based on Dependents
The bottom portion of the allowance screen calculates based on the employee's number of dependents. The number of dependents can be chosen from the four possibilities of Federal Exemptions, State Exemptions, Local Exemptions or Number of Dependents from the Employee Master.

This portion of the screen may have up to four calculations, and more than one calculation may be made for a given employee. If the employee's gross wages fall with the range specified, then the calculation will be made and added to all previous calculations.

For a given line, if the employee's gross wages fall within the ranges, then the specified number of dependents will be multiplied by the Multiply By amount specified.

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