Tuesday, January 8, 2013

Check Your Paycheck!

Congress allowed the 4.2% Social Security Tax Rate to expire on December 31st.  You should check your first paycheck of 2013 to make sure your employer properly withheld 6.2% (multiply Social Security Wages by .062 and the number should be within a couple dollars of the Social Security withholding.)

If they are withholding at 4.2%, they have until 2/15 to start withholding at 6.2% and until 3/31 to correct the underwitholding.  This means that, if your employer witheld at 4.2% for the beginning of the year, they will have to withold EVEN MORE during Feb and Mar to correct for it.  Check your paychecks and make sure you know what they are doing and be prepared for some small paychecks (set aside the extra money if they are witholding at 4.2% to make up for when they correct it.)

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