Advanced Accounting payroll year end and latest information

While there are no W-2 form changes for calendar year 2011 (changes were made for 2010), there are changes to transmittal form W-3. There are also no form 1099 changes, but there is a minor change to transmittal form 1096. An update for version 7i is available with respect to these changes (as a part of rel. 4). Advanced Accounting 5.1 and 6.1 versions updated through 2007 will largely work except for form 1096 and W-3 form changes. Concerning other changes that go into effect starting in January 1, 2012, see below.

These changes (applies to all versions of Advanced Accounting including legacy versions) should be made after your last 2011 payroll is processed, and after you have fully processed and finalized your 2011 W-2's (which should be done prior to your first 2012 payroll):

Social security tax wage limit for 2012 is scheduled to increase to $110,100 (up from the 2010 and 2011 maximum of $106,800). A Circular E for 2012 has not yet been released however see 2012 Social Security Changes. The employer rate decrease from from 6.2% to 4.2% remains in effect until at least February 29, 2012 (see Payroll Tax Cut Temporarily Extended into 2012).

Procedure to change:In SY-D, retrieve each division one at a time, press ENTER, PgDn, verify the employee rate as 4.2 which should have been changed last year (see SY-D sample screen below) and change the 106,800 amount to 110,100, continue to press ENTER until you return to the main screen then press F10 or click on the save button if the amount needs to be updated. Here you also update your new SUTA rate and limit as well as any new state disability rate/limit for the new year.

The FUTA changed to 6.0% on July 1, 2011. Currently we are unaware of any changes as of Jan. 1, 2012.

Sample SY-D screen
In accordance with IRS Notice no. 1036 dated December 23, 2011, the federal standard exemption increases in 2012 to $3,800 (from the 2011 level of $3,700). The IRS has not yet released a new Circular E for 2012.

2012 change in Advanced Accounting required): PR-K, tax code US0 should be $3,800.

Sample PR-K screen for code USO
Federal withholding tax rate changes (Notice 1036, December 2011)

Change in Advanced Accounting required: PR-K, retrieve tax code USS then USM and follow Table 7. Update the from, to and tax amount columns (there are no changes in the "plus" % column). Or, follow the example screen shots below the table. Use PR-K also to update changes in state tax rates if state follows same approach as federal. If your state has made changes and you cannot locate a corresponding tax code, please contact us (or call 801-277-9240)

Notice 1036, December 23, 2011

Printable version of table below
As far as we are aware, supplemental wage percentage for federal withholding remains at 25%. Advanced Accounting 6.1 starting with rel. 14 (and all releases of Advanced Accounting 7i) contains logic to handle both federal and state flat rate percentage supplemental wage withholding. Your state may also have a flat rate for supplemental wage (for example, bonuses) payments.

More information:

Early Release Copies of 2012 Percentage Method Wage Withholding for Income Tax Withholding (Dec. 2011)

Adv 7i and 6.1 information (an editable W-2 capability was added in 2008); 941/W-2 enhancements made to 7i

Adv 5.1 W-2/payroll/other updates

Tax and other forms

We are reviewing and making changes relating to various states that may require updates; some of these changes may not be posted until later in January.

We remain 100% committed to an integrated payroll module; it is part of what a complete accounting system must have, and it is not something that should be outsourced by the software. End users however may choose to have their payroll needs outsourced in which case they can still process payroll related transactions in Advanced Accounting either through the payroll module to mirror what occurs on the outside or via a synchronizing general ledger entry.