Important 2013 Payroll and Tax Changes for Small Business

On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012. Here are some highlights of how this Act could affect your small business:

●    Previous income tax rates for individuals earning over $400,000 and households earning over $450,000 has expired and will now increase from 35 percent to 39.6 percent. The IRS has released new tax tables reflecting these rate changes, found HERE.

●    The Act does not extend the “payroll tax holiday,” so the employee Social Security tax rate will go from 4.2 percent back to 6.2 percent up to the 2013 taxable wage limit of $113,700. As a result, a worker earning $50,000 per year will now see $1,000 less in their net take-home pay as compared to 2012.

To read more about these changes, click HERE.