Have You Reviewed Your Withholding Lately?

November 20th, 2012

We may not yet know whether or not the Bush tax cut will be extended; but there are other reasons to review your withholding.

Following please find an article from Charles Auerbach, CFP®, CLU, ChFC, EA of Memphis's Wealth Strategies Group, Inc.:

As 2012 turns into 2013, there are some important things to consider.

Payroll taxes are slated to increase 2 percent next year. The payroll tax cut of 2011-12 has slim chance of extending into 2013. The maximum payroll tax paid by high earners is slated to be $7049.40 next year, $2,425 above 2012 levels. That isn't just because Social Security taxes for employees are returning to the 6.2 percent level; it also reflects a 3.3 percent increase in the upper salary limit subject to the tax to $113,700.

Now is a good time to review your withholding status. Aside from the presumed end of the payroll tax holiday, there are other reasons you may want to adjust your withholding status.

1. You tend to pay a great deal of income tax each year.
2. You tend to get a big federal tax refund each year.
3. You recently married or divorced.
4. A family member recently passed away.
5. You started a business venture or became self-employed.

Source: www.forbes.com_sites_janetnovack_2012_10_16_social-security-benefits-to-rise-1-7-workers-face-up-to-2425-payroll-tax-hike(10.16.12)

Tags: Taxes

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