Bohemia, NY (PRWEB) January 14, 2013
On January 14, 2013, a representative of Diapoules and Feinstein CPAs P.C. responds to an article in Financial Planning which discusses the much-anticipated 2013 income tax deal and provides information for dealing with the IRS.
Early morning of New Year’s Day, the House passed the Senate’s budget bill, voting to extend income tax cuts. According to the article, the expiration of the 2001 and 2003 Bush tax cuts is reflected in the new withholding tables for 2013. The new deal imposes larger increases for the bracket of top earning single taxpayers earning over $400,000 a year, and married couples earning over $450,000 a year, reports Financial Planning. This group will see a rise in tax rates of 39.6%, up from 35%. The deal also restores limits on the amount of income that can be protected from federal taxation. The tax rates for capital gains and dividends will remain low for the majority of taxpayers, according to the article.
However, the tax rate for Social Security is reverting to the 2010 rate of 6.2% - an increase of two percentage points from last year. This applies to all earned income up to $113,700. According to the article, the IRS advised that employers should implement the new Social Security tax rate by February 15.
According to the article, since employers will deal with the withholding charges, workers will not need to fill out new W-4 forms or take additional actions. However, the article notes that the IRS “is urging workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. 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.”
The Long Island CPA Firm Diapoules and Feinstein CPAs P.C. comments on the new 2013 tax deal. According to Jim Diapoules, "While the extension of 2012 tax rates for taxable income spares taxpayers in all but the top bracket from any increase in Federal Income Tax, any working taxpayer is going to see a tax increase as the 2% reduction in the Social Security withholding rate ended. This effect will be immediate as it will be felt on everyone’s first paycheck in 2013 and on a percentage basis this will have a greater effect on everyone whose wages or self-employed earnings are less than the 2013 Social Security maximum of $113,700. Revisiting your W-4 is a good idea especially since there were significant tax law changes contained not only in “The American Taxpayer Relief Act of 2012” but also in the “Patient Protection and Affordable Care Act. ”
Diapoules and Feinstein CPAs P.C. have been providing accounting, auditing and tax services to Greater New York City area since 1989. D&F provides our clients with great personal attention and years of professional experience in order to see them succeed and help them to feel confident.