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What Are Your Payroll Tax Obligations in 2011?
Published on Jan 5, 2011
Read our article, 'What Are Your Payroll Tax Obligations in 2011?' at 'Time to Start Up,' the small business blog by BizFilings.
How do you handle your payroll tax obligations in 2011? The New Year brings a reduced payroll tax for 2011 and extends the current income tax brackets through 2012.
So what does this mean for employers?
According to the experts at Business Owner's Toolkit, employers should take action to begin using the new withholding tables and minimizing the Social Security tax withheld as soon as possible in 2011, but no later than Jan. 31, 2011. Additionally, employers have until March 31, 2011, to make adjustments if Social Security is over-withheld during the month of January.
"The employer's tax rate remains at 6.2 percent; also, the Medicare (Hospital Insurance) tax remains at 1.45 percent for both the employer and employee. Thus, the total 'Social Security' tax burden this year is 13.3 percent, rather than the 15.3 percent in previous years. This reduced Social Security withholding will have no effect on employee's future Social Security benefits," cites www.toolkit.com.
Pending further action from Congress with respect to payroll taxes, the employee portion of the tax will revert to 6.2 percent in 2012.
Consult the IRS percentage method tables for income tax withholding to learn more.