· Expired 2 percent Social Security tax holiday will affect all income earners
· New 39.6 percent tax bracket will affect those making more than $400,000
· Additional 0.9 percent Medicare tax will affect those making more than $200,000
There’s no getting around it – all of our paychecks will look a little smaller.
A tax holiday has expired which affects all U.S. employees, regardless of salary level. For the past two years we’ve enjoyed a temporary tax holiday that reduced the amount of taxes we paid into Social Security (also called OASDI withholding) by 2 percent. The 2013 rate increases from 4.2 percent to the standard 6.2 percent of your salary, up to the $113,700 limit on taxable wages. Your employer will continue to contribute to your Social Security at the employer rate of 6.2 percent.
The tax news that garnered the most attention recently was the “fiscal cliff” legislation passed by Congress and signed by President Obama on Jan. 2. That law required the Internal Revenue Service to re-issue new tax tables for 2013.
The tax brackets are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 36 percent, and the newest, 39.6 percent. The new 39.6 percent tax bracket is for those earning more than $400,000 for those filing as individuals and $450,000 for those filing as families per year. You may view the tax tables on IRS Notice 1036.
Another new 2013 tax is tied to health care reform. For those making more than $200,000, the IRS requires an extra 0.9 percent of Medicare tax in addition to the 1.45 percent already required to be withheld.
http://www.irs.gov/pub/irs-pdf/n1036.pdf
· New 39.6 percent tax bracket will affect those making more than $400,000
· Additional 0.9 percent Medicare tax will affect those making more than $200,000
There’s no getting around it – all of our paychecks will look a little smaller.
A tax holiday has expired which affects all U.S. employees, regardless of salary level. For the past two years we’ve enjoyed a temporary tax holiday that reduced the amount of taxes we paid into Social Security (also called OASDI withholding) by 2 percent. The 2013 rate increases from 4.2 percent to the standard 6.2 percent of your salary, up to the $113,700 limit on taxable wages. Your employer will continue to contribute to your Social Security at the employer rate of 6.2 percent.
The tax news that garnered the most attention recently was the “fiscal cliff” legislation passed by Congress and signed by President Obama on Jan. 2. That law required the Internal Revenue Service to re-issue new tax tables for 2013.
The tax brackets are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 36 percent, and the newest, 39.6 percent. The new 39.6 percent tax bracket is for those earning more than $400,000 for those filing as individuals and $450,000 for those filing as families per year. You may view the tax tables on IRS Notice 1036.
Another new 2013 tax is tied to health care reform. For those making more than $200,000, the IRS requires an extra 0.9 percent of Medicare tax in addition to the 1.45 percent already required to be withheld.
http://www.irs.gov/pub/irs-pdf/n1036.pdf
