We talked about this in previous editions of this video blog. But many people have overlooked this topic. I have talked with both employers and employees over the last couple of weeks who failed to consider this change.
On January 1, 2013, the 2% temporary reduction in the payroll tax that was in effect in 2011 and 2012 expired. The social security tax reverted back to 6.2%. This was never intended to be a permanent change. But rather a short-term method to put additional money in employees pockets to stimulate spending.
If you are an employer, you should verify that your payroll software was updated for this change.
If you are an employee, you should check your paystub to confirm this was changed by your employer.
If you are self-employed, this will need to be taken into account when figuring your 2013 estimated tax payments.
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