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The reduction of Social Security taxes has been extended. The two-percentage-point cut in the 6.2 percent Social Security payroll tax, which is deducted from workers' paychecks, will run through the end of 2012. For a family earning $50,000 a year, the cut saves them $1,000 annually.
The Social Security rate for employers remains at 6.2%.
The Social Security rate for self-employed individuals has also been extended and is 13.3% for all of 2102. The taxable income base for the Social Security is $110,100 in 2012. All earnings are subject to the Medicare rate of 1.45% for individuals, 2.9% for the self-employed.
It is very uncertain if these reductions will continue after 2012.
The new law also extends unemployment benefits for some long-term unemployed workers.
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Repairs, Maintenance, or Improvements- Which Treatment is Correct? |
New regulations were released at the end of 2011, by the IRS and the Treasury department regarding the treatment of repairs, maintenance and capital improvements. The regulations include comprehensive policies on the capitalization of amounts paid to obtain, construct or improve tangible property. The regulations are effective immediately for the majority of business taxpayers and supply the principles that businesses must now consider when establishing whether expenditures are allowed to be deducted as maintenance or must be capitalized and then depreciated over time.
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For 2012, some limitations have changed. The majority of limitations for pension and IRA contributions have been improved to some extent. For example:
- The Social Security taxable wage base has been increased to $110,100 for 2012 up from $106,800.
- The maximum employee elective deferrals to Section 401K and Section 403b plans has increased from $16,500 in 2011 to $17,000 for 2012. The limit for Section 457 plan salary reductions also increased to $17,000.
- The maximum IRA contributions remains at $5,000 for 2012. If you are 50 or older you can contribute an extra $1,000 under the special catch-up provision.
- The highest elective deferral for a SIMPLE or 401 K SIMPLE plan has stayed the same at $11,500 in 2012.
- The maximum amount of annual contributions that can be made to a participant's account under a defined contribution plan in accordance with IRC 415 (c) had increased to the lesser of $50,000 or 100% of compensation, up from $49,000
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Offshore Voluntary Disclosure Program (OVDP) |
The offshore voluntary disclosure program (OVDP) has been renewed by the IRS. It grants people concealing foreign accounts to come forward and "volunteer" to report income not previously reported. The IRS has reported that more than $4.4 billion has been collected to this point as a result of the two earlier international voluntary disclosure programs. The most recent program is comparable to the 2011 program, but with a few important variations. There is no set deadline for people to apply, unlike the 2011 program. On the other hand, the conditions of the program may possibly change at any time in the future. For instance, the IRS may modify the penalties imposed under the program for all or distinct groups of taxpayers or choose to conclude the program completely whenever they see fit. Read More |
W-2 Reporting for Group Health Plans |
The IRS released new directions on the requirement that employers provide information to workers on the cost of employer-provided group health plan coverage. For employers that issued more than 250 W-2 in 2011 it is mandatory that they initiate reporting the cost of coverage under employer-sponsored group health plans starting with the 2012 Forms W-2 that will be issued to employees in January 2013. Small employers are not required to comply with the new reporting requirements until further notice. Affected employers should start taking the necessary steps at this time to make sure that sufficient processes and procedures are in place to track and record health coverage costs in 2012 to prepare for the new reporting requirement. Read More |
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We would like to express our gratitude to all of our clients for their continuous support. Our Syosset office is now complete and we invite you to come by and view our new space. We thank you for all of your referrals and appreciate the recommendations which allow our business the opportunity to grow. We are always looking for feedback and welcome your comments about our firm and our performance. We would love to hear from you.
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Tax Organizers
Individual tax organizers have been placed into our portal system. We ask all clients to put all of their 2011 tax information including copies of W-2's, 1099's, 1098's, K-1's, etc. on the portal, send them to us as a secure email attachment, fax them to (516) 921-4070 or mail us copies of these forms. This will allow us to start work on your individual returns |
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Don't Forget About Your Life Insurance Checkup!
As a proactive service we would like you to consider allowing us to review your life insurance policy. Many individuals buy life insurance and then continue paying premiums but do not consider the policy's original purpose or the current value of the policy. MayerMeinberg believes that reviewing your policy can ensure that you have the appropriate coverage as your family needs or estate planning needs change.
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Clients In The News
Our very own Stuart Mayer assists world-renowned jewelry designer, Alexis Bittar, in the transaction with private equity firm TSG, allowing for brand expansion both domestically and internationally.
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Time to Refinance.
Now is a perfect time to refinance your mortgage, with rates at historically low levels. These lower rates can save you thousands each year, supplying you with more cash in hand each month that can use to pay off debt or add to your savings plan. You can even refinance from a 30 year loan to a 15 year loan. This will decrease the number of years it will take to pay off the loan and reduce the total amount of interest paid over the lifetime of the loan.
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Check Out Our New Website
and Social Media Pages!
Since our merger we have revised our website as well as our social media pages. We update each site regularly and invite you to come and see the changes that we have made. Social media is a great outlet for getting quick answers and staying update with current accounting information. We encourage you to like, follow, and join our social media efforts through asking questions, sharing an experience, and introducing us to your friends. We appreciate your business and value your involvement, let us know what you think, we'd love to hear from you.
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