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Issue: # 91Janaury 7, 2013
  
fiscal cliff
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Greetings!    

 

 

We have avoided the Fiscal Cliff for now by increasing the tax rates for individuals earning less then $400,000 and couples earning less then $450,000.   Here are some other highlights:

  • Dividend taxes will  not go up
  • Medicare reimbursements will not be cut
  • Unemployement benefits will be extended.  

Does anyone really doubt there is another Fiscal Cliff ahead, but until then we need to worry about the Debt Ceiling.     

 

The biggest change and what should concern you and your employees the most is the ending of the payroll tax cut "holiday"-more information below!      Ironically we feel this has been glossed over, but your employees will notice it in their very first payroll check. 

 

If you have a question, send an email to  Bill or Vanessa today.

 

Bill Randell CLU,CHFC,     

Vanessa Costa CLU,CHFC,

 

 

 

 

 

Payroll tax cut "holiday" expires!

Employees take home pay does down first paycheck in 2013!

  

Since 1990 the total for Social Security has been 7.65% (6.2%-Social Security and 1.45%-Medicare).   history of rates.   This amount (7.65%) is matched by the employer.    In 2011, employees were given a "holiday" and the amount was dropped to 5.65% (4.2% and 1.45%).  This was extended in 2012.   Please note the employer was never given  the"holiday"and has remained at 7.65%.  

 

The current deal just signed ends the employee "holiday" and the Social Security tax for employees is back to 7.65% (6.2% and 1.45%).  Technically, it is not an increase, but the end of the "holiday".   

 

This means every employee's first $110,100, maximum amount subject to the payroll tax, just increased by 2%  and they will see the increase in their very first paycheck in 2013!   

 

In dollars and cents, an employee making $50,000 will see their take home pay go down $1,000 due to the expired payroll tax cut, although the employee's tax rate did not increase.    Business Insider article.   

 

Please note monies deferred into your 401(K) are exempt from Federal and State income, not Social Security taxes. 

 Hobby Lobby Lawsuit 
 
We are already starting to see repercussions as ObamaCare is implemented around the country.  To date over 40 lawsuits have been filed against the government over the contraception mandate, alleging it violates their right to religious freedom under the First Amendment and the Religious Freedom Restoration Act.
hobby lobby
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Most recently Hobby Lobby will continue to provide health insurance, but will be fined $1,300,000  million each day for not providing coverage for the so-called morning-after or week-after pills. The company's owners contend the pills induce abortion, which violates their religious beliefs.   They filed for an exemption, but it was denied since they are not a religious institution like many hospitals and universities who were granted this exemption.

 

This will surely end up in front of the Supreme Court.

 
Flexible Spending  Accounts & Section 125

 

Any monies that are deducted for FSA and Section 125 plans are not subject to any Social Security taxes.   These plans have become even more attractive for employees now that their social security taxes have just gone up 47% (4.2% to 6.2%).

 

We have plan documentation for FSA's and can provide at a very low cost and if you still do not have dental consider the Central Mass Dental and Vision, which deductions are Section 125 eligible.   

 

      

    

Escape Fire
The fight to rescue American healthcare
 
Saw this trailer the other day. Not giving a review, just a heads up.  
 
escape fire
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