Snyder and Associates

 

Tax Byte

Greetings from Snyder & Company!

One of our 2012 initiatives is to jump into the 21st technology stream and provide our clients and friends with useful information in short segments. We are all inundated with such a high volume of information, but our goal is to sift it down to meaningful elements (we affectionately call "TaxBytes") that are quick & easy to read.

We all know that change is the only constant; this is especially true in the business world. Future S&C TaxBytes will focus on a various subjects, including taxes, asccounting, and general business, but before we get too far into 2012, we wanted to share a few items relative to the 2012 tax year:

  • In 2011 workers received a 2% pay increase from Uncle Sam when the employees' share of the FICA portion of the social security tax was reduced from 6.2% to 4.2%, but it was only for 2011. Through a last minute tax bill in December, the government kept that reduced rate through February 2012. General opinion is that it will be extended again through the end of 2012, but stay tuned. If it's not, starting in March all workers will take a 2% paycut.
  • The maximum amount of salary taxed for FICA jump 3%, from $106,800 in 2011 to $110,100 for 2012.
  • Social security recipients who are under full retirement age can earn up to $14,640 in 2012 before they have to pay back any social security benefits. Those reaching full retirement age in 2012 can earn up to $38,800.
  • For all employers offering health insurance to their employees: starting in 2012 this tax free benefit has to be quantified and reported on the employee's W-2's. You may want to modify your payroll process now to capture that information as you go through the year to save time later when the 2012 W-2's are due out.
  • The standard mileage reimbursement rate increases to 55 1/2 cents per mile for 2012.
    Health Saving Account caps increase for 2012 to $6,250 for family plans, and $3,100 for singles. If you were born before 1958 you can put an extra $1,000.

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