2013 Tax Changes


Social Security Payroll Taxes (2 percent increase)

The government reduction in Social Security payroll taxes (“tax holiday”) ended Dec. 31, 2012. The employee tax rate for Social Security will return to 6.2% from 4.2%, resulting in 2 percent less in after-tax pay beginning in the first January 2013 paycheck. This tax break was not extended in the Act passed by Congress on Jan. 1, 2013.

 

 

Estimated 2 percent increase for Social Security Payroll Taxes:

Yearly taxable
wages
Additional taxes
you will pay (by month)
Additional taxes
you will pay (by year)
$25,000 $42 $500
$50,000 $83 $1,000
$75,000 $125 $1,500
$100,000 $167 $2,000

Additional Medicare Tax On Wages Over $200,000

The current Medicare tax rate of 1.45% will continue continue for 2013, but an additional Medicare tax of .09% will be withheld on wages paid  to an employee in excess of $200,000 during the calendar year.

Federal Withholding Tax Rates

The Act maintains the current income tax rates for individuals earning up to $400,000 and families earning less than $450,000. The maximum marginal rate for employees making more than these amounts will now be 39.6% up from 35%.

 

 


Contact

Robert C. Chance

Director

P115 Andy Holt Tower

Knoxville, TN 37996

865-974-5251 Phone

865-974-3530 Fax