Payroll Tax reduction is temporary and silly

The extension of the social security FICA tax cut to February 2012 adds to the complexity and additional work of taxpayers.

A two-month only extension of the cut would mean that the IRS would need to revise 2012 Forms 941, Employer’s Quarterly Federal Tax Return, to take into account the 2% difference in employee Social Security withholding tax rates in the first two months of 2012 as compared to March 2012. The return would then need to be revised again in the second quarter of 2012 to eliminate the 4.2% rate. Employers would need to separately track employee Social Security wages for the first two months of the year and adjust their payroll systems to account for the 2% increase in the withholding rate beginning with wages earned on March 1.

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About Jeffrey Brooks

Jeffrey Brooks, CPA, CFP, MBA since 1976 has specialized in helping clients save significant taxes, help businesses increase their cash flow, revenues and profits while increasing their control and satisfaction. Jeff and his accounting firm sincerely cares about the happiness of his clients.

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