Fiscal Cliff

[kitkat]

Tom: How do you think going over the fiscal cliff will effect child care providers and our taxes? Are we looking at a huge tax hike? Thanks!

[TomCopeland]

Fiscal cliff

Tom: How do you think going over the fiscal cliff will effect child care providers and our taxes? Are we looking at a huge tax hike? Thanks!

I hesitate to say anything about this because we just don't know exactly what will happen. I want to wait until Congress makes a decision. If Congress does nothing, then the biggest impact on providers will be a rise in the Social Security/Medicare taxes by 2%. In 2011 and 2012 this tax rates was 13.3%. Without action, it will rise to 15.3%. It was 15.3% for many years before 2011.

[suehelen]

Now that the deal is passed, am I correct in assuming that the payroll tax holiday has ended? Does this mean that our Social Security/Medicare taxes will raise 2% back up to 15.3% for 2013?

[suehelen]

http://www.nbc-2.com/story/20488211/payroll-tax-holiday-comes-to-an-end

[TomCopeland]

Social Security tax for 2013

Now that the deal is passed, am I correct in assuming that the payroll tax holiday has ended? Does this mean that our Social Security/Medicare taxes will raise 2% back up to 15.3% for 2013?

Yes. See my article on this: http://www.tomcopelandblog.com/2013/...providers.html