It is especially important for employees to know about this extension because it can help you recognize the difference in paychecks from the month of February to the beginning of March
Daly City, CA (PRWEB) January 17, 2012
The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. San Francisco tax preparation company, Gelardi Tax Service, offering tax help throughout San Francisco, explains how this extension should be handled and what the public can expect.
Employers should implement the new payroll tax rate as soon as possible, but not later than Jan. 31. For any Social Security tax over-withheld during January, employers should also make an offsetting adjustment in workers’ pay as soon as possible, but not later than March 31.
Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action.
“It is especially important for employees to know about this extension because it can help you recognize the difference in paychecks from the month of February to the beginning of March,” Lisa Gelardi of Gelardi Tax Services said. “Employees may notice a $20 to $40 difference between paychecks.”
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher income employees in an amount equal to 2 percent of the amount of wages they receive, during the two-month period, in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year.
For more information about the temporary tax extension or Gelardi Tax Services, call 415-233-7764, view the company on the web at http://www.gelarditaxservice.com or visit 332 Glenwood Ave. in Daly City.
About Gelardi Tax Services
With more than ten years of providing tax services for a variety of industries in the San Francisco area, Lisa Gelardi has the knowledge and experience to make tax preparation less intimidating. From Schedule As to Schedule Es, 1040s to 1065s and back taxes to current taxes, Gelardi handles personal taxes with accuracy and ease.
As a small-business owner, Gelardi is more cost effective and a lot easier to get in touch with than other companies. Offering tax help year round, she’ll even travel to clients in the Bay Area, so that they save time. She communicates clearly with her clients and displays a keen ability to find solutions for a variety of tax situations and industries.