12-12-2012, 10:41 PM
Educate yourselves. My employer has been providing us with significant education on the topic. Here are a few items I received today:
A series of lower personal income tax rates are scheduled to expire at the end of 2012. At this time, it is uncertain if Congress will extend, modify or allow the existing tax rates to expire. Your paycheck may be affected by the changes if taxes do increase. While Congress deliberates, there are a few key implications to understand and think about to prepare for any changes:
Social Security payroll tax
If the payroll tax cut is not extended, the Social Security payroll tax-withholding rate will increase by 2%, which will apply to wages up to $113,700.
Example:
Wages earned: $50,000 per year
Additional annual Social Security Tax: $1,000 more (.02 x $50,000)
Biweekly paycheck impact: $38.46 less
Use this tax calculator to help you estimate how the changes may affect you.
Medicare payroll tax
Under the Affordable Care Act, an employee's share of the Medicare payroll tax would increase by .90% on wages earned above $200,000 (single filers) and $250,000 (joint filers).
Example:
Single filer wages earned: $225,000 per year
Additional annual Medicare Payroll Tax: $225 more (.009 x $25,000)
Use this tax calculator to help you estimate how the changes may affect you (select Healthcare under types of taxes).
Personal income tax rates/brackets
If lower personal income tax rates expire at the end of 2012, you may need to review and reset your withholding elections for 2013 to ensure you donât owe more than you prefer at tax time, or receive too big of a refund. The following steps can help you evaluate your personal situation:
Review possible personal income tax rate/bracket changes
Use the irs.gov withholding calculator to determine which withholding level is best for your personal situation
A series of lower personal income tax rates are scheduled to expire at the end of 2012. At this time, it is uncertain if Congress will extend, modify or allow the existing tax rates to expire. Your paycheck may be affected by the changes if taxes do increase. While Congress deliberates, there are a few key implications to understand and think about to prepare for any changes:
Social Security payroll tax
If the payroll tax cut is not extended, the Social Security payroll tax-withholding rate will increase by 2%, which will apply to wages up to $113,700.
Example:
Wages earned: $50,000 per year
Additional annual Social Security Tax: $1,000 more (.02 x $50,000)
Biweekly paycheck impact: $38.46 less
Use this tax calculator to help you estimate how the changes may affect you.
Medicare payroll tax
Under the Affordable Care Act, an employee's share of the Medicare payroll tax would increase by .90% on wages earned above $200,000 (single filers) and $250,000 (joint filers).
Example:
Single filer wages earned: $225,000 per year
Additional annual Medicare Payroll Tax: $225 more (.009 x $25,000)
Use this tax calculator to help you estimate how the changes may affect you (select Healthcare under types of taxes).
Personal income tax rates/brackets
If lower personal income tax rates expire at the end of 2012, you may need to review and reset your withholding elections for 2013 to ensure you donât owe more than you prefer at tax time, or receive too big of a refund. The following steps can help you evaluate your personal situation:
Review possible personal income tax rate/bracket changes
Use the irs.gov withholding calculator to determine which withholding level is best for your personal situation
