Payroll tax Feed

A Lyft ride sharing vehicle in Atlanta. (Photo by Daniel X. O'Neil via Flickr Creative Commons) Most U.S. workers meet their annual tax responsibilities via paycheck withholding. Here you give your boss the information needed to calculate just how much income tax should come out of each paycheck so that you're Goldilocks at tax-filing time, not owing the U.S. Treasury too much or too little. The sharing economy has thrown a wrench into this system. Lots of folks with traditional 9-to-5 jobs are hustling on the side to earn extra cash. Others have committed full-time to gig economy work. Job... Read more →


We're on the downside of 2018 and that has some folks in the tax world, and on Capitol Hill, concerned. They're worried that unless folks act soon, they're going to get an unwelcome surprise next federal tax filing season. When they fill out their new Form 1040s, they'll discover they owe. The reason is the new Tax Cuts and Jobs Act (TCJA). OK, technically it's because a lot of folks haven't adjusted their payroll withholding to account for the new lower income tax rates and other changes, like no more exemptions and revised of eliminated itemized expenses. It's not for... Read more →


Freelancing means more flexibility, such as where to work and the option to wear more comfortable attire. It also means you have some new tax responsibilities. (Photo by Lulu Hoeller via Flickr) The gig economy in the United States is growing at a phenomenal rate that shows no signs of slowing down. That's the analysis of BMO Wealth Management. A recent survey commissioned by the international wealth management company found that gigs — defined as jobs of short or uncertain duration — are the new normal. BMO's findings appear to support Upwork's annual Freelancing in America study, which was released... Read more →


June's a busy month for me. Lots of family birthdays. Father's Day. Graduations. Taxes. Yep. Taxes. In June. Specifically, June 15. The midpoint of the first month of summer is a major tax deadline. Estimated taxes: The biggie for a lot of taxpayers (including me) is the second installment of 2018's estimated taxes that's due by June 15. You have several ways to make this payment — six, actually, according to the current Weekly Tax Tip. I'll let you check out the details in that other post at your leisure, but here are some of the more popular options: Credit... Read more →


Tired of being a wage slave? Thanks to the Tax Cuts and Jobs Act (TCJA), some disgruntled salaried employees are looking into becoming independent contractors. But before you take the leap into a new way of working, you need to take tax and other matters into account. "Congress flipped traditional tax-planning upside down" with the new tax law, noted the Tax Policy Center's Steven M. Rosenthal in a TaxVox post soon after the new tax law took full effect earlier this year. "Many moderate-income workers may be able to exploit a tax break that higher-income workers cannot. And by shifting... Read more →


The hubby and I, like every other person, are getting older every day. That means we're getting closer to claiming Social Security and Medicare benefits. Two recent reports on the status of those federal programs make me glad to be closer to our collection dates. Both Social Security and Medicare, according to the programs' trustees, will run out of money to pay beneficiaries in 16 years and 8 years, respectively. At least the grayer-every-day hubby and I will get some of the full payouts. Sorry about all you youngsters! OK, I'm really not that selfish. But we are a bit... Read more →


Click image to watch the Mos Eisley cantina scene, in which these musicians provide the catchy background tune, from the 1977 Star Wars movie that launched the sci-fi film franchise. Merry May 4th. Yes, this is another goofy, made-up holiday, but one that's dear to sci-fi fans (and punsters), particularly those devoted to Star Wars. The film franchise's iconic "May the force be with you" greeting is celebrated each year on the similar sounding "May the Fourth be with you." As a long-time sci-fi fan and a college student who waited in a long line to see the 1977 debut... Read more →


Tax Day is less than a week away. But finishing up your 2017 Form 1040 is not the only tax task facing millions of Americans. Here are 10 tax matters that must be taken care of by April 17. 1. File your 2017 tax year federal tax return. Yeah, I started with the easy (so to speak), obvious one. But it is the reason for the tax season. If you don't get your return into or on the way if snail mailing by Tax Day, the late-filing penalty is 5 percent of the additional taxes owed amount for every month... Read more →


Employers were supposed to have new withholding tables in place by mid-February to reflect the Tax Cuts and Jobs Act income tax rate changes. Treasury Secretary Steven Mnuchin said once those payroll changes were in place, 90 percent of workers would see bigger paychecks thanks to the GOP tax bill. Mnuchin might want to rethink his prediction. A CNBC survey conducted March 17-20 of 800 Americans, 60 percent of whom were working, found that 52 percent of the employed haven't seen a change in their paychecks. In fact, just 32 percent of the working adults that CNBC talked to said... Read more →


Now that the Republican-sponsored massive tax bill is on its way to the Oval Office, taxpayers have two questions. The first is, "Will it help or hurt me when I get around to filing my federal tax return in 2019?" A variety of calculators offer some very broad hints as to that answer. The second is, "Will I see any benefits before the annual tax-filing time?" GOP members of Congress and the White House say yes. You should see the effect of the new tax rates, specifically more spending money, reflected in your February paychecks, promise Donald J. Trump and... Read more →


Back in mid-October, the Social Security Administration (SSA) announced that the wage base, that's the amount of each worker's earnings that are subject to the Social Security portion of payroll withholding, would increase to $128,700. This week, the SSA revised that number downward. The new amount of income from which Social Security taxes will be withheld is $128,400. The SSA says it made the adjustment after getting corrected W-2s later in October that weren't figured into the original 2018 wage base announcement. "Approximately 500,000 corrections for W-2s from 2016 resulted in changes for three items based on the national average... Read more →


Houston paramedic Jesus Contreras, shown with some of his coworkers, was brought to the United States by his mother when he was just six. He is one of the almost 800,000 young people facing potential deportation if the Trump Administration revokes an Obama-instituted immigration leniency action. Click image to see the full NBC News report, via Twitter, on Contreras and the law. The White House is expected to make a decision on President Obama's Deferred Action for Childhood Arrivals (DACA) program as soon as Tuesday, Sept. 5. UPDATE, Sept. 5: It's official. DACA is ending. In a press conference this... Read more →


All U.S. workers know, simply from looking at their pay stubs, that our tax system is pay-as-you-earn. Our taxes come out of our paychecks as withholding, both for federal income taxes, as well as to cover future Social Security and Medicare benefits. We don't have control over those taxes we pay now for federal retirement and hospital coverage when we're older. But we can — and should — adjust our income tax withholding if there are changes in our lives, such as marriage or a family addition or home purchase that can affect a tax bill, or we're getting a... Read more →


An expected increase in the Social Security wage base won't help most workers, but could be a tax break for wealthier earners. The economy is ticking along, with nominally more workers finding jobs. But many of them say they aren't getting paid what they should. That's causing some pushback from middle- and working-class voters who supported Donald J. Trump. "Trump ran as a working-class hero, so let's look at the results," Joseph Geevarghese, executive director of Good Jobs Nation, told the Washington Post. "We're seven months into his administration, and wages are flat." While the Administration and economists point to... Read more →


Donald J. Trump's got a lot of campaign promise policy issue irons in the fire. This week, he pulled one out a bit by deciding to let undocumented residents known as DREAMers stay in the United States. The decision was announced as part of a fact sheet released by Homeland Security late June 15. That document's next-to-last line notes: "The June 15, 2012 memorandum that created the Deferred Action for Childhood Arrivals (DACA) program will remain in effect." A group of DREAMers, the undocumented youths who hope to remain in the United States, make their point during a 2016 presidential... Read more →


Donald Trump is batting .500 for cabinet members who screwed up nanny tax reporting. This morning, the Senate narrowly confirmed Rep. Mick Mulvaney (R-South Carolina) to head the White House Office of Management and Budget. The vote was 51-49. At least Vice President Mike Pence didn't have to up to Capitol Hill to break a tie this time. Click image to watch the C-SPAN video of Mick Mulvaney's confirmation hearing before the Senate Homeland Security and Governmental Affairs Committee. His testimony apparently convinced just enough Senators to approve him on Feb. 16 for the White House budget post. Did Mulvaney's... Read more →


Rep. Mick Mulvaney is going to have to answer some nanny tax questions if he hopes to become President-elect Donald Trump's budget director. Rep. Mick Mulvaney speaks to some of his South Carolina constituents on last September's Constitution Day. (Photo by Erik B. Corcoran via Twitter) The South Carolina Republican was elected to Congress in 2010 as part of the midterm Tea Party wave. Since then, the man whom some have called a debt warrior has been a major player in the conservative Freedom Caucus and has focused on ways to cut federal spending. He probably should have focused on... Read more →


This presidential election year, the candidates' tax focus is, as usual, on how to lower income tax rates for at least some Americans. But, notes the Tax Policy Center (TPC), most U.S. workers hand over more in payroll taxes than income taxes. Payroll tax parts: Payroll taxes are the amounts designated for Federal Insurance Contribution Act, or FICA, funded programs. You know them as Social Security and Medicare. The total FICA rate is 15.3 percent. Workers and their bosses each pay half. The bulk of the tax, 12.4 percent, goes toward the Social Security component. Taxes at a 6.2 percent... Read more →


A little more than a month ago, inquiring tax eyes were focused on Panama. Specifically, folks were curious about a law firm in that Central American nation that allegedly helps the wealthy stash cash in global accounts that are out of reach of their nations' tax collectors. ICIJ has produced a video, The Panama Papers: Victims of Offshore, that shows what the organization says are the unseen victims behind the email chains, invoices and documents that make up the Panama Papers and the shadowy offshore industry. A couple of U.S. states, Nevada and Wyoming, were named as international tax haven... Read more →


Hey, May. You're supposed to be all about the flowers from last month's April showers. You can stop the rain and more any time now. Bluebonnets and more in a Central Texas field along the Willow City Loop. Photo by Kay Bell; art direction by the hubby. Yep, that old climatological adage is not quite accurate. May also brings plenty of showers. And hail. And tornadoes. That trend seems to be on track this year. Just two days into the month, and severe weather has moved from Central and flooded East Texas, where Houston was declared a major disaster area,... Read more →