Kelli Strube communicated the following in a memo to some of our clients this morning. McIlvain and Associates can be your trusted resource to answer questions and to help to ensure your compliance as these decisions are being made in Washington.
“Regarding payroll processing, a few changes are now in effect based on Congress’s decisions of late. If we handle your payroll processing, we will make sure the software is updated and the new payroll calculation is correct. Most importantly, you may need to go over the new legislation with your employees– they will now have 6.2% social security withholding vs. 2012’s rate of 4.2% (up to a wage limit of $113,700). In addition, employees making over $200,000 will have an additional medicare tax of .9% withheld (total medicare withholding rate of 2.35%).
Individuals making $400,000 ($450,000 if file jointly) will have higher federal tax withholdings, as the new law raised the tax rate from 35% to 39.6% on these employee’s wages.
Under the legislation, you have until February 15th to implement these payroll changes.
If you handle your own payroll processing, let us know if you need our assistance with any implementations.”
Kelli Strube, CPA & Partner – McIlvain & Associates