Payroll Tax Cut to Boost Take-Home Pay for Most Workers

Dec 20, 2010, 15:37 ET from California Society of Enrolled Agents

SACRAMENTO, Calif., Dec. 20, 2010 /PRNewswire-USNewswire/ -- Millions of workers will see their take-home pay rise during 2011. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was signed into law on December 17, includes a 2 percent payroll tax cut for employees. This will reduce the employee Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid, and will have no effect on the employee's future Social Security benefits.

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Although this is wonderful news for workers, the IRS recognizes that employers may face challenges in implementing the changes. According to the IRS, employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but not later than Jan. 31, 2011. Many workers and employers may face difficulties in trying to understand new state and federal tax regulations, and can benefit from the services of a tax professional. The California Society of Enrolled Agents (CSEA), with 4,200 federally licensed tax professionals, is offering Californians guidance when picking a specialist to assist them with tax planning, preparation and representation for the 2010 fiscal year. "There is a lot of confusion surrounding how to best file your taxes for 2010, especially this year in light of our changing economy, and so many changing tax rules," said Kim Kastl, EA, CSEA President.  "With all the changes happening in the state Legislature and Congress, it is more critical than ever to have a qualified tax specialist on your side when preparing your tax and financial strategy."

If you have questions about use tax, sales tax deduction for vehicle purchase, education credits and deductions, alternative minimum tax relief, or tax breaks for the unemployed, your Enrolled Agent can assist you in ensuring that you do not pay too much, and help you minimize your risk of an audit. Visit www.csea.org or call free 1-800-TAXPRO-5 to find an Enrolled Agent near you.

Enrolled Agents are licensed by the Department of the Treasury to advise and represent clients specifically in matters of taxation and to help ensure that all deductions and credits are applied accurately and fairly. The California Society of Enrolled Agents represents thousands of EAs statewide, and requires adherence to a Code of Ethics & Rules of Professional Responsibility and additional tax education beyond that required by the government.

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Kim Kastl, EA

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SOURCE California Society of Enrolled Agents



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