Sax LLP, a leading accounting, tax and advisory firm, has provided the general public with an overview of important changes in payroll tax rates. The firm posted the information to the Tax Update section of its website, on which it frequently announces updates and changes to tax policy.
Sax begins their announcement of payroll tax rate updates by acknowledging their importance to companies. An awareness and understanding of these updated tax rates is necessary, according to Sax, in order to effectively calculate 2017 company and employee payroll taxes and to fulfill all compliance requirements. The changes detailed by the accounting firm took effect on January 1.
The first payroll tax rate update Sax LLP notes is an increase in the wage base for Federal Insurance Contributions Act (FICA) taxes. The previous wage base for the tax of $118,500 has increased to $127,500. The current FICA tax rate, paid by both employers and employees, has remained constant at 6.2%.
Sax also mentions an additional Medicare tax in 2017. The additional tax, according to the accounting firm, takes effect when wages reach certain amounts and depend on the filing status on the employee’s personal income tax return. The additional tax is withheld from the employee and is not associated with a tax requirement on employer’s side. As it relates to payroll taxes, the wage base to draw from is the taxpayer’s wages including taxable benefits paid. All wages in this total, paid over $200,000, are subject to the aforementioned Medicare tax, deducted at the rate of 0.9%.
Sax goes on to provide similar analyses of a variety of changes to payroll tax rates. The accounting firm observes a credit reduction applicable to Federal Unemployment Tax (for some states), an increase in the contribution rate for New Jersey Unemployment and Disability and a rate increase for New Jersey Family Leave Insurance. Other tax changes noted by Sax are related to New Jersey payroll tax payments, New York unemployment compensation, minimum wage changes in multiple states and more.
Sax concludes their overview of payroll tax updates by expressing their commitment to continually updating their information as policy develops. For further specific information on payroll tax updates, readers are encouraged to contact Alan S. Isaacs, CPA, MBA at [email protected] and see https://www.saxllp.com/category/news-events/tax-updates/
Sax LLP is a multi-disciplinary accounting, tax and advisory firm with a focus on providing forward-thinking, actionable advice. They work primarily with closely-held companies, family-owned businesses, non-for-profit organizations and high net-worth individuals. The accounting firm has over 60 years of experience in the industry and maintains offices both New Jersey and New York. https://goo.gl/pjU5k3