Lately the Fiscal Cliff is all we’ve heard about in the news. Families and individuals have anxiously awaited the decisions that would directly impact their taxes. But for HR professionals and employers, the uncertainties surrounding payroll tax changes throughout 2013 present an even larger challenge: COMPLIANCE.
The American Taxpayer Relief Act of 2012 was passed just a few weeks ago on January 1, 2013 and contains a number of provisions that are important to business owners and/or anyone in charge of payroll.
Did you know that the legislation no longer includes an extension of the 2 percent payroll tax cut of the Social Security (FICA) employee tax and that the maximum taxable wage was increased from $110,100 in 2012 to $113,700 in 2013? And that the legislation reverses the $600 deduction in the $3,000 credit for child and dependent care that was originally set to take effect on Jan. 1, 2013?
Additionally, certain components of the legislation have been extended through 2013: the legislation extends federal emergency unemployment benefits for one year, and also reinstates and extends the Work Opportunity Tax Credit through 2013.
Are you keeping up? We know it’s difficult! There’s also fine print surrounding education assistance, tax exclusions for transit and vanpool benefits, 401(k)s, 403(b)s and similar defined contribution retirement plans, and more!
Things are always changing and staying up to date on compliance is a tedious full time job. Clients that work with a Professional Employer Organization (PEO)can expect the following certainties when it comes to payroll services:
- Professional Employer Organizations manage and deliver payroll to your employees, in addition to accounting for the necessary Federal, State and Local taxes.
- PEOs also manage Social Security, Medicare, Federal Unemployment Tax (FUTA), State Unemployment Insurance (SUI) and any other taxes that are applicable.
- PEOs help decrease a client’s liability through the co-employment model of the PEO relationship.
- By outsourcing payroll and other administrative tasks to a PEO, your business may be able to limit the number of employees within each office location, further reducing labor costs.
And, PEO clients get “big company perks.” Many PEOs have invested hundreds of thousands of dollars into their Payroll and Human Resource Information Systems (HRIS). Streamlined processes… and most importantly COMPLIANCE!
Do you want peace of mind surrounding compliance in the upcoming year?
Contact PEO Advantage today to learn more.