Two percent doesn’t sound like much, does it? But, that small amount may not be so small when it’s taken out of your paycheck this year. Congress did not extend the 2% tax cuts for 2012, so now your take home pay may be less than you thought.
Apparently, if the tax cut had been extended, it would have hurt consumer spending and confidence. Well, let’s see. I suppose less money to take home will not cause the same thing? Especially for the lower income brackets.
Richard Rubin of Bloomberg Newsweek states:
Smaller businesses that use off-the-shelf software or prepare pay stubs by hand would also face difficulty complying with late changes.“It’s a complication in the employer’s life and I think the smaller employers are the ones who are going to feel the confusion more directly,” said Abe Schneier, a senior technical manager at the American Institute of Certified Public Accountants in Washington.
People who work for themselves and pay both the employer and employee sides of the tax will have trouble ensuring they make the correct quarterly estimated tax payments, he said.
Schneier said he thought that large payroll providers would face complications, though would largely be able to manage the changes.
Small businesses need to consider that it is the beginning of the year and tax time is now. Because of the late changes, it is important to get started on your payroll taxes early, especially if you do them yourself. Some payroll software may not have the up-to-date information you will need.