Tax News Tax Savings: The President Signed the Payroll Tax Holiday Into Law Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published Feb 24, 2012 - [Updated Jul 24, 2019] 1 min read There’s great news for working taxpayers this week. On February 22, the President signed the payroll tax holiday into law extending the 2 percentage point payroll tax cut through the end of 2012. payroll tax holiday The law maintains the lower payroll tax rate which reduced the social security tax taken out of your paycheck from 6.2% to 4.2% on income up to $110,100. In addition, if you are self-employed, you will continue to pay the reduced social security tax rate of 10.4% instead of 12.4%. The law also extends federal unemployment benefits and prevents doctors who accept medicare from taking a 27.4 percent reimbursement cut. The payroll tax holiday extension also increases the amount new federal hires and those with less than five years as a government employee have to contribute to their pension plans in order to fund the payroll tax holiday extension and unemployment benefits. What Does This Mean for You? The extended payroll tax holiday prevents a tax hike that would impact 160 million working Americans and keeps an extra $1,000 per year in your pocket if you earn $50,000 per year($50,000 x 2%). For 2012, your maximum savings will be up to $2,202($110,100 x 2%). If you are married and each of you earn at least $110,100, that is a savings of $4,404! That’s more money for you and your family. How will that savings help you this year? Previous Post IRS Updates “Where’s My Refund?” Next Post The Vices of March: Sin Taxes Meet March Madness Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. 2 responses to “Tax Savings: The President Signed the Payroll Tax Holiday Into Law” I do not understand why I must pay income tax on social security when it was my money to began with and I loaned it to the government, now when they pay it back they want more. Reply wow; if the FANTASTIC earnings we had LAST year continue THIS year, that’ll be $200 more we are ALLOWED to KEEP!! Gas Bills, HERE WE COME!!! Reply Leave a ReplyCancel reply Browse Related Articles Tax Refunds Payroll Tax Changes Affect the Way Americans Spend and … Tax News Payroll Tax Cut Bill Extension is Now Approved! Tax News First Coronavirus Relief Update: Executive Orders Signe… Tax News The House Passes the Payroll Tax Bill Tax News IRS Announces Extension Deadline for Businesses Impacte… Tax News Spending Bill Passes: What’s Next for the Payrol… Tax Deductions and Credits Making Work Pay Credit – What Is It and Can I Use… Tax Tips What is the Making Work Pay Credit? Tax News Payroll Tax Cut Bill Rejected by the House Tax Planning Payroll Tax Defined ( What It Is & How Much Is It)
I do not understand why I must pay income tax on social security when it was my money to began with and I loaned it to the government, now when they pay it back they want more. Reply
wow; if the FANTASTIC earnings we had LAST year continue THIS year, that’ll be $200 more we are ALLOWED to KEEP!! Gas Bills, HERE WE COME!!! Reply