The Weekly Ledger

Posted January 17^th   
 
Due to the delay in the passage of the most recent income tax legislation by congress, called the “American Taxpayer Relief Act”, the IRS has announced that it won’t be ready to accept individual tax returns for the 2012 tax year until 1/30/13. This additional time, about 10 days later than originally planned, will allow the IRS time to approve the processing of the majority of forms used by most individual taxpayers, including those individuals affected by the alternative minimum tax (AMT), as well as those impacted by the “extender” provisions, such as the state and local sales tax deduction, higher education tuition and fees deduction, and the educator expense deduction.  The IRS has not officially announced the timing of their acceptance of business tax return filings yet, however they have stated that returns which include depreciation, business credits, and energy credits will be delayed.  Also, remember that with the start of the new year it’s a very good time to update your income tax withholding from wages, which can be done by completing Form W-4.  For your use in determining how much withholding to have taken out of your wages or retirement benefits, the IRS offers a useful “withholding calculator” tool, and has also created a 2013 “withholding guidance” memo, which provides a link to the 2013 withholding tables, via Notice 1036.  Please bear with us as we update our firm’s website for tax and payroll related resources and links, and certainly contact us if we can answer your questions, or if you’d like to schedule an appointment for us to prepare your and/or your company’s income tax return.

Now that the “fiscal cliff” has been averted, it’s time to consider the financial consequences of our lawmaker’s decisions, or indecisions, as they pertain to you and/or your company.  One of the main impacts that all employees will experience, beginning with their first payroll of the new year, is the change in the amount of social security (FICA) tax withholding from 4.2% to 6.2% on salary and wage earnings.  The two year payroll tax “holiday” is over, so all payroll recipients will have 2% more in tax withholding, and therefore a 2% smaller net pay check, effective immediately.  Additionally, now that it is the start of a new year, it’s time to mention a couple of other  payroll related topics.  The first is that the State of WA’s minimum wage rate has been increased to $9.19 per hour, in 2013, formerly $9.04 per hour.  Also, at the beginning of each calendar year it’s always a good idea to complete a new Form W-4, in order to update your income tax withholding for the coming year, especially if you’ve had a change in personal circumstances, such as marriage, children, additional itemized deductions, etc.  Please contact us if you have any questions, or need any help with your specific circumstances.  Happy New Year from Wittenberg CPA!