Anticipated 2013 Tax Changes – Will You Be Prepared?

There are several Federal tax provisions to expire on December 31, 2012; following are a few that may be of interest to you.

The employee Social Security tax rate was reduced from 6.2% to 4.2% for 2010 and 2011. This reduction will expire on December 31, 2012, if there is no Congressional action to extend it. Beginning in 2013, the Social Security tax rate will revert back to 6.2%. The employer Social Security contribution has remained at 6.2%.

The employee Medicare tax rate has been 1.45%; however, beginning in 2013, an additional 0.9% will be added to the tax on income in excess of $200,000. The employer Medicare contribution will remain at 1.45%.

The Federal tax cuts that have been in place since 2001 and were extended for 2012 are set to expire again on December 31, 2012. Without action from Congress, the Federal tax rates could increase for 2013.

General questions regarding these tax changes can be directed to the Payroll Office, at tyrer@oakland.edu, or x3034. To determine how possible 2013 tax changes may affect your financial situation, please contact your personal tax advisor.

Additional last minute tax changes will be posted to the Payroll News page of the Payroll Website.