Payroll tax Feed

In addition to the many dollar amounts that the Internal Revenue Service adjusts annually for inflation, a key figure that affects our taxes is the Social Security Administration's official contribution and benefit base. For us working stiffs, this is the amount of our income that is subject to Social Security taxation. This is part of the payroll tax, also known as FICA (short for Federal Insurance Contributions Act), that comes out of salaried workers' checks and goes toward the federal retirement benefits program. The tax rate is 6.2 percent for employees with employer contributions matching that rate. The Social Security... Read more →

Just like Sen. Ted Cruz, I'm on my spouse's company health care policy. That and a Texas address are the only thing the Tea Party darling and I share. Because Ted and Heidi Nelson Cruz and the hubby and I have workplace-provided medical insurance, we get a chance in the coming weeks to decide exactly what type of coverage and other related workplace benefits we want for the coming year. Yep, it's annual workplace open enrollment season. Like many employer-provided plans, our options are part of a cafeteria plan, so named because they allow employees to select benefits from a... Read more →

Remember back in the spring when the Internal Revenue Service admitted that losing operating funds because of sequestration will hamper the agency's audit efforts? It's happening again. About a month after sequestration kicked in on March 1, then Acting IRS Commissioner Steve Miller told a House appropriations subcommittee that budget cuts will mean, among other things, fewer audits. Last week when the IRS had to determine which jobs were essential, it decided that return examination, which is what the agency calls audits, wasn't. Tax audits, as I noted last week at my other tax blog, are among the IRS activities... Read more →

While Capitol Hill lawmakers are screwing around considering ways to deal with the country's impending financial deadlines, Congress' independent budget analysts announced some good fiscal news. The U.S. Treasury picked up $284 billion in August. That added revenue, according to the Congressional Budget Office (CBO), means Uncle Sam's budget deficit at the end of last month was $411 billion smaller than at the comparable period last year. That sizable reduction, making the budget deficit around $753 billion for the first 11 months of the 2013 fiscal year, is noteworthy. At this point in 2012, the budget deficit was $1.164 trillion.... Read more →

Remember the infamous 47 percent of people who didn't pay taxes? Sure you do. Those were the folks cited in a 2009 estimate by the Tax Policy Center (TPC) who inadvertently sabotaged Republican presidential candidate Mitt Romney's quest for the White House when he was caught on video tape characterizing them as government dependent takers instead of economic growth makers. That group is now 4 percent smaller, according to the latest analysis by TPC, a joint venture of the Urban Institute and Brookings Institution. The 43 percent of Americans whom TPC analysts project won't owe federal income taxes in 2013... Read more →

When I started working, a handful of companies still offered their workers a pension plan. I'm talking a real pension plan, one where the business alone set aside some money that you could collect each month after you retired. Back then, financial planners regularly referred to pensions as one leg of the three-legged retirement planning stool: pension payments, personal savings and Social Security benefits. Those three retirement components account for this week's By the Numbers figure. But retirement planning has gotten much more complicated in recent years. Two wobbly legs: We continue to hear about Social Security's financial troubles. Whether... Read more →

Welcome to June, the month that brings us June bugs, June brides and the official arrival of almost everyone's favorite season, summer. And while it's tempting to focus on vacations to pristine beaches and mountain cabins, lazy days with no classes and a general slower outlook on life, you still need to pay some attention to your taxes. So here are a few June Tax Moves to make in the coming days. Not to run my meteorology fixation into the ground, but we all need to be aware of the overlap of the tornado season -- what's Mother Nature's problem... Read more →

When things aren't going well, most of us have plenty of ways to explain what's going wrong. Now we can add another excuse reason for some of our problems. Taxes. A Harris Interactive poll conducted for the American Institute of CPAs found that stress, brought on by less money due to higher taxes, is taking a toll on our waistlines, friendships and sleep. "Mounting money pressures are making Americans cranky, tired and unhealthy," said Ernie Almonte, chair of the AICPA's National CPA Financial Literacy Commission. "This can lead to a double whammy, with ensuing physical and emotional stress potentially leading... Read more →

The stock market is soaring. Unemployment is down. More houses are being built. And today Uncle Sam reported that we're spending more at stores. The economy's back, baby! Not so fast. Yes, Department of Commerce data show that retail sales in February were stronger than anticipated. Total sales last month were up 1.1 percent over the January numbers and were 4.6 percent higher than in February 2012. Those numbers were substantially better than projections of a 0.5 percent monthly increase and a 0.2 percent annual improvement. But there's a definite divide in recent spending patterns. "The things you'd expect the... Read more →

It's been almost two months since employers began withholding Social Security taxes from workers at the rate of 6.2 percent of wages. Workers in 2011 and 2012 had a little more money to spend thanks to the payroll tax holiday. But this two-percentage-point cut in the Social Security tax withheld from workers' paychecks expired on Dec. 31, 2012. That, says a recent survey, is why we're seeing less consumer spending in early 2013. Tax Policy Center analysts estimate that the full 2013 payroll tax will mean an average loss of about $740 to every worker. And a just-released poll commissioned... Read more →

The end of 2012 and the beginning of 2013 all came together in a blur, thanks in large part to Congressional procrastination that led to a mad rush to pass fiscal cliff legislation. So it's no surprise that what is and isn't in the eventual fiscal cliff tax bill dominated 2013's debut discussion last week at my other tax blog. The first Bankrate Taxes Blog post of 2013 arrived with an unwanted welcome: Happy higher new year payroll tax. The 6.2 percent payroll tax amount was not part of fiscal cliff talks and quietly returned on Jan. 1. That means... Read more →

It's baaaaack and for some folks it is as scary as the ghosts in Poltergeist. It is the full 6.2 percent payroll tax once again being collected from employees. In 2011 and 2012, the amount of tax taken out of workers' paychecks to go toward Social Security was 4.2 percent. The so-called payroll tax holiday was created to give workers more spending money incrementally throughout the year in the hope that they would pump the cash back into the stumbling economy. Although we've technically been out of recession for a while, things still aren't all that rosy. So there was... Read more →

Keeping track of all the fiscal cliff machinations these last few days has left me feeling like a special agent (a very sleepy special agent!) who just completed a crazy mission and who's facing debriefing today. I'm trying to keep my eyes open long enough to take in follow-up information and share what I know. Please bear with me. As I mentioned earlier, the 157-page H.R. 8, otherwise known as the American Taxpayer Relief Act (ATRA) of 2012, is full of tax provisions that will affect every filer, some retroactively and others beginning in 2013. I've covered the bill's major... Read more →

Assume crash positions, people. We are going over the fiscal cliff. The Senate is still working on a proposal to deal with the expiring/expired tax provisions that are part of the fiscal cliff. The House, however, has called it a day. Regardless of what the Senate might do later today, the House will vote on it tomorrow at the earliest. So technically, we're all part of the Wyle E. Coyote cartoon family, dropping helplessly into a financial canyon. Cliff jump courtesy Realistically speaking, it won't matter that much if the final tax deal is done at 11:59 p.m. tonight... Read more →

As you're getting your 2013 tax filing material together (you are doing that now, aren't you?) take a good look at your final W-2 of 2012. It's the last time you'll see that small of a FICA withholding amount. Since January 2011, the amount of FICA, sometimes indicated as Social Security tax on pay stubs, taken out of workers' paychecks has been 4.2 percent. That will change on Jan. 1, 2013. Next year the 6.2 percent withholding rate returns. The tax cut holiday always was meant to be temporary, a short-term stimulus measure to keep folks spending during the recession.... Read more →

Those numbers geeks at the Tax Policy Center are at it again. They've come up with a fiscal cliff tax calculator (based on the version created back in the 2010 lame duck session when the Bush-era tax cuts were first set to expire) that gives us an idea of what our taxes might be depending on what happens with Congress and the president between now and the end of the year. Since there are so many options floating around Capitol Hill on how to deal with this impending fiscal fall, TPC has given us several options to mull over. We... Read more →

When Congress checked out last month, the House left a handful of Washington, D.C.-area lawmakers with the task of showing up and running a pro forma session. But the extended absence of most of the 535 Senators and Representatives means that we won't see any tax action until mid-November at the earliest. As I noted on Sept. 24, one tax break is likely to disappear entirely on Jan. 1, 2013: the 2 percentage point payroll tax cut. or, as it's often referred to, the payroll tax holiday. I'm mentioning that post -- Payroll tax cut on its last legs --... Read more →

Federal agencies, unlike private companies, are exempt from paying federal income taxes. But like the private sector, U.S. government agencies still must make employment tax deposits and meet related tax reporting requirements. That's not happening in all cases. In fact, it's not happening to the tune of $14 million in unpaid federal agency taxes. Those millions in tax money that Uncle Sam basically owes himself comes from 70 federal agencies that were responsible for 126 tax accounts that were delinquent at the end of 2011, according to the Treasury Inspector General for Tax Administration (TIGTA). It gets worse. TIGTA, in... Read more →

Before Representatives and Senators slipped out of Washington, D.C., for their extended election year recess frenetic campaigning district work period, we got one hint about what not to expect in January. House Minority Leader Nancy Pelosi (D.-Calif.) said that the payroll tax holiday should be allowed to expire at the end of this year. What? A member of the Democratic leadership saying it's time to drop a tax cut that was one of President Obama's most widely recognized legislative victories? You do remember in late December 2011 how he stood down the Republicans who led the fight against the 2... Read more →

When Congress was debating whether to extend the 2 percent payroll tax cut, one of the key arguments for keeping the rate at 4.2 percent through 2012 was that the extra money would help the country's economic recovery. That, of course, presumed that we'd all take the extra money -- estimated to be about $1,000 a year for a family earning the annual median income of slightly more than $50,000 -- and pump it back into the economy. So how's that working out? So-so, based on data collected by Liberty Street Economics, the blog by economists working at the Federal... Read more →