Keep up with payroll changes
Tax Tip of the Week
January 26, 2015
Keep up with payroll changes
For payroll preparation, January is a time of looking back and looking forward. Here are a few items to put on the to-do list as you wrap up 2014 and get ready for 2015.
Looking back
- As you finalize year-end 2014 payroll reports, be sure to include taxable fringe benefits on employee wage statements (Forms W-2).
- Use the correct federal unemployment tax. Your state might be one that still owes the federal government for unemployment trust fund loans. In that case, your credit will be reduced and your annual federal unemployment tax will be higher. You can add this increase to your fourth quarter deposit.
Looking forward
- The basic overall rate for payroll taxes remains at 7.65% for 2015, and the additional Medicare tax rate is still 0.9%.
- However, the amount of an employee's income on which you must withhold social security tax has increased for 2015. Beginning January 1, the "social security wage base" is $118,500. That means you're required to withhold — and match — the 6.2% payroll tax on wages up to $118,500 this year.
- Remember, the Medicare portion of payroll tax has no maximum limit. You'll withhold and match 1.45% of all wages you pay.
- As before, the 0.9% additional Medicare tax applies once an employee's wages reach $200,000. This tax is paid solely by your employee; you're not required to make a matching deposit.
Please call if you have questions about your payroll tax returns, deposits, or withholding responsibilities. We're here to help ease your filing burden.
"Business Tips" are published monthly to provide useful business information. Return to this site every month for helpful suggestions on how to make your business more profitable. If you would like more information on anything in "Business Tips," or if you'd like to be on our mailing list to receive other business, tax, or financial information from time to time, please contact our office.
The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2015
January 26, 2015
Keep up with payroll changes
For payroll preparation, January is a time of looking back and looking forward. Here are a few items to put on the to-do list as you wrap up 2014 and get ready for 2015.
Looking back
- As you finalize year-end 2014 payroll reports, be sure to include taxable fringe benefits on employee wage statements (Forms W-2).
- Use the correct federal unemployment tax. Your state might be one that still owes the federal government for unemployment trust fund loans. In that case, your credit will be reduced and your annual federal unemployment tax will be higher. You can add this increase to your fourth quarter deposit.
Looking forward
- The basic overall rate for payroll taxes remains at 7.65% for 2015, and the additional Medicare tax rate is still 0.9%.
- However, the amount of an employee's income on which you must withhold social security tax has increased for 2015. Beginning January 1, the "social security wage base" is $118,500. That means you're required to withhold — and match — the 6.2% payroll tax on wages up to $118,500 this year.
- Remember, the Medicare portion of payroll tax has no maximum limit. You'll withhold and match 1.45% of all wages you pay.
- As before, the 0.9% additional Medicare tax applies once an employee's wages reach $200,000. This tax is paid solely by your employee; you're not required to make a matching deposit.
Please call if you have questions about your payroll tax returns, deposits, or withholding responsibilities. We're here to help ease your filing burden.
"Business Tips" are published monthly to provide useful business information. Return to this site every month for helpful suggestions on how to make your business more profitable. If you would like more information on anything in "Business Tips," or if you'd like to be on our mailing list to receive other business, tax, or financial information from time to time, please contact our office.
The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
