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REPORT ABUSIVE REPLY
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Message Subject
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Welcome to the Fiscal Cliff. Just received this notice from payroll dept...
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Poster Handle
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Anonymous Coward |
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Post Content
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Important changes to your tax withholding amounts effective January 1, 2013
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that was signed into law in December 2010 will expire on December 31, 2012. What this means to you:
· The temporary 2% cut in employee Social Security withholding (from 6.2% to 4.2%) effective on January 1, 2011, will expire, and the rate will change back to 6.2%.
· The Social Security wage base is increasing from $110,100 to $113,700, resulting in the maximum tax being increased from $4,624.20 to $7,049.40.
· In addition, the Patient Protection Affordable Care Act of 2010 increases the Medicare part A payroll tax by 0.9% (from 1.45% to 2.35%) for all income above $200,000.
Other possible changes effective January 1, 2013:
Tax-related provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) also are set to expire on December 31, 2012 impacting Federal Income Tax withholding. What this means:
· The 10% income tax bracket is eliminated; the lowest bracket will be 15%. The top four brackets will change as shown below. To:
25% to 28%
28% to 31%
33% to 36%
35% to 39.6%
· Optional flat rate tax on Supplemental Wages up to $1 million in a year increases from 25% to 28%.
· Mandatory flat rate on Supplemental Wages over $1 million in a year increases from 35% to 39.6%.
The information above reflects the legislation currently in effect. If the laws change, we will send an update as early as possible in January 2013.
Quoting: Anonymous Coward 25720208 OK, I know I'm not an American, but the wages they are giving as examples here are so far above what we make together as a couple, never mind alone, that I struggle to comprehend. $100,000.00 and $113,000.00 for wages... Dam, sign me up! I'd need a telescope to see those wages, based on where I am. Can someone clarify, if this truly is considered a "base" wage, because I can assure you, that is considered a VERY high wage here. No that's not base salary, it's wage base, totally different thing, it's the upper limit subject to the social security tax multiplier. [ link to www.ssa.gov] <<<Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. For earnings in 2013, this base is $113,700. The OASDI tax rate for wages paid in 2013 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $113,700 would contribute $7,049.40 to the OASDI program in 2013, and his or her employer would contribute the same amount. The OASDI tax rate for self-employment income in 2013 is 12.4 percent.>>>
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