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Welcome to the Year-End Edition of NannyPay News

Volume 3, Issue 2 (December 2006)

It is intended to provide household employers and NannyPay users with information about employment issues, tax tips, NannyPay software tips, and other items of interest in a brief, easy-to-read format.

If you have any comments or suggestions about our newsletter, please let us know by emailing us at: newsletter@essentia-soft.com. We look forward to your feedback.

Form W-2s in Household Quantities — We Sell Them

NannyPay compatible Year 2006 W-2s and W-3s are now available for purchase in "household" quantities. Although you can buy IRS approved form W-2s and W-3s in office supply stores, you probably will not find them in quantities of less than 25 and at a reasonable cost.

Essentia Software Corporation is committed to making life just a little easier and less expensive for household employers. So, as a convenience (and savings) to our customers, you can now buy blank IRS approved, and NannyPay compatible, Form W-2s and W-3s from us, and have the forms shipped directly to your home.

Our IRS approved forms package includes everything you need for up to two employees: one Form W-2 form set, which consists of two W-2 forms; one Form W-3; and two compatible mailing envelopes. Shipping and handling is included in the price of our forms. For more information, or to order, visit our Tax Forms page.

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NannyPay Tip — Closing out the Year with NannyPay Software

Here are seven important year-end NannyPay tips from Essentia Software Corporation.

  1. Closing out 2006 with NannyPay Classic Software. As this year ends you may be wondering about how to close your 2006 payroll records. When the calendar turns to 2007, NannyPay 2006 will automatically "lock" your 2006 payroll transactions; that is, NannyPay 2006 will not permit you to enter any transaction dated "2007" in your 2006 payroll file. This will ensure the integrity and accuracy of your 2006 records. Thereafter, you should only use NannyPay 2006 to run reports and print 2006 tax forms. To ensure your withholdings are correct in 2007, you should use NannyPay 2007 for wages paid in 2007 (see below).
  2. Closing out 2006 with NannyPay Staff Edition Software. NannyPay Staff Edition maintains all your payroll records in one continuous file. Therefore, it's not necessary to create a new 2007 payroll transaction file. To keep your tax tables up-to-date, we strongly recommend upgrading to NannyPay 2007 Staff Edition (see below).
  3. You must update NannyPay 2006. To assist with your year-end tasks, the latest release of NannyPay 2006 and NannyPay 2006 Staff Edition are now available for immediate download. The updates contain two updated reports for the 2006 tax season: Schedule H and Form W-2/W-3. These reports are not essential, but will conveniently summarize your payroll data for manual completion of the forms. The Schedule H report will also provide you with a more accurate calculation of your FUTA liability than does the FUTA estimate generated by NannyPay's "Employer Liability Report." The latest release of NannyPay also permits you to print a completed Schedule H, which you may file with your federal tax return. You must have Adobe's free, Acrobat® Reader (version 4.0 or higher) installed on your system for this feature to work. You may obtain the free Reader from www.adobe.com. Remember, you must have the full versions of NannyPay 2006 or NannyPay 2006 Staff Edition already installed on your system before installing these updates.
  4. Don't forget your employee's Form W-2 and your Form W-3. In 2007, the federal government requires you to prepare and give your employee(s) a 2006 Form W-2 (by January 31, 2007). By February 28, 2007, you must also file a W-3 and copies of all W-2s with the Social Security Administration. The latest release of NannyPay 2006 will permit you to print federal forms W-2 and W-3 on IRS approved, machine-readable forms, which may be purchased by visiting Essentia Software's web site at www.nannypay.com, or at most stationery stores or form suppliers. Please understand that we have only tested the forms we sell for compatibility with NannyPay.
  5. File your federal Schedule H by April 16, 2007. For most household employers, your 2006 Schedule H should be included with your personal tax return when you file it. Be sure not to forget your state filing and reporting obligations, if any.
  6. Don't uninstall NannyPay 2006 right away. If you're using the classic edition of NannyPay 2006 (not Staff Edition) and you plan to use NannyPay 2007 when it is released, we strongly recommend that you do not uninstall NannyPay 2006 until you have completed all your 2006 tax filings and reporting (by April 16th of 2007). NannyPay 2007 classic version will have a new file structure that will not permit you to open your 2006 payroll records. It is, therefore, handy to have NannyPay 2006 and NannyPay 2007 installed side-by-side until tax time is over.
  7. Make a "hard copy" of your NannyPay 2006 records. Before uninstalling NannyPay 2006 classic edition we also recommend that you preserve your 2006 records by printing copies of all the reports and your individual payroll transactions ("Print Registers" under the "File" menu). Alternatively, you can archive your 2006 records by securely backing up your payroll files along with a copy of the NannyPay 2006 full installation package (so that you can read the files in the future, if necessary).
  8. NannyPay 2007 is here! NannyPay 2007 and NannyPay 2007 Staff Edition are now available for download from our web site. If your current NannyPay subscription has not expired, you will be able to download and install NannyPay 2007 and continue to use it without restrictions for the balance of your current subscription period

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Remember to contact your tax professional if you have tax related questions. We, of course, are always available to answer NannyPay software related questions and inquiries. E-mail Technical Support with your questions.

Thanks for using NannyPay and have a happy and prosperous New Year 2007!