The Top 10 Tax Changes Affecting Employers for 2012
During 2011, many significant legislative changes to tax laws were enacted that affect all Americans. In the February 2012 issue of Insights and Innovations, CompuPay’s monthly publication highlighting topics that impact the business community, we have identified the top 10 tax changes that will have an effect on U.S. businesses in 2012:
- Social Security Wage Base – Set at $110,100 for 2012
- Temporary Payroll Tax Cut Continuation Act of 2011 – The Social Security tax reduction for employees has been extended through February 29, 2012.
- Income Tax Withholding Tables Updated – The IRS has posted updated income tax withholding tables; many states have updated their tax tables as well.
- Tax Rate for Vehicle Use – The standard mileage rate is set at 55.5¢ for 2012. The fair market value limit amounts for cars and trucks is increased to $15,900 and $16,700, respectively.
- Commuter Tax Benefits – The maximum amount of tax-free transit and vanpool benefits was reduced to $125 per month for 2012; the qualified parking benefit was increased to $240 per month.
- Elective Deferral Plan Limits – Increased to $17,000 for 2012. SIMPLE plan remains at $11,500.
- IRS Form W-2 – Employers filing over 250 Forms W-2 are required to report the cost of employer-sponsored health care on the forms for 2012.
- Work Opportunity Tax Credits (WOTC) – Most WOTC programs expired at the end of 2011; new programs for hiring veterans are in effect for 2012.
- Small Business Health Care Tax Credit – Small businesses that supply health coverage to their employees may be able to apply this credit if they meet specific criteria.
- FUTA Credit Reductions – Employers in 20 states and the U.S. Virgin Islands are now paying higher FUTA taxes because their state borrowed money two or more years ago to fund their state unemployment program and did not pay it in full by November of 2011.
For a detailed explanation of all ten tax changes, please visit the Insights & Innovations page of the CompuPay website.
The material contained on this page is for informational purposes only and is current as of the date of publication. CompuPay is not a legal, tax or financial adviser and makes no claims as such. For tax, financial or legal advice, please seek a professional.