Payroll Taxes

IRS Provides Guidance on Withholding in 2013

Withholding To Reflect Expiration of 2001 and 2003 Tax Cuts;
Guidance Will Be Modified Due to the American Tax Relief Act of 2012

The American Tax Relief Act of 2012 was signed into law late on January 2, 2013.  However,  the published tax tables do not reflect the changes.  We expect the IRS to issue updated tables, but until that time, we must withhold at the published rate.  The Act did not extend the 2% reduction to the Social Security tax that reduced the employee portion of the payroll tax from 6.2% to 4.2% for the last 2 years. As a result, as of January 1, 2013 the tax is back to 6.2%, a 2% tax hike for all workers earning under $113,700.  If you are interested in the full text of the bill, it can be found at:  http://www.govtrack.us/congress/bills/112/hr8/text. 

Employees are not required to take any additional action, such as filling out a new W-4 withholding form.  As always, however, the IRS urges workers to review their withholding every year and, if necessary, fill out a new W-4.   For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.

If you would like to update your withholding, please complete the federal form HERE and return to Michelle Kaufman. 

The Kansas form is available HERE and Missouri is available HERE.