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Congress Votes to Extend Payroll Tax Cut
February 17, 2012 | 
Author Congress passed a bill to extend the social security payroll tax cut through the end of the year. At the end of last year the cut, which was in place in all of 2011, was temporarily extended through the end of February to buy time for the Congress which couldn’t agree on how to pay for a full year extension. This bill extends the cuts in the Social Security withholding tax by 2% to 4.2% from 6.2% through the rest of the year.
Other provisions in the bill include an extension of long-term jobless benefits and a provision to stop deep cuts in Medicare reimbursements to doctors. The tax cut and additional spending in the bill are not fully offset by additional revenue or other spending cuts. Part of the costs are offset by reduction in the retirement benefits of newly hired federal employees, but the bill is still expected to add $89 billion to the federal deficit over the next decade. There is also considerable concern about the effect of the cut on the long-term fiscal viability of the Social Security program.
Posted in Individual taxes, New Legislation, Payroll, Taxation | 
Tags: Payroll, tax law changes, Taxation | 
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Proposed American Jobs Act of 2011
The Obama administration submitted the President’s promised “American Jobs Act of 2011” to Congress on September 12. Here are some of the key business “stimulus” provisions.
- It would extend the 100% bonus depreciation deduction, scheduled to expire this year, to the end of 2012.
- It would cut the employer portion of the Social Security tax to 3.1% from the present 6.2% on the first $5 million of payroll.
- It provides a credit for the full amount of employer social security taxes on the amount of wages and salaries that exceed the total amount of wages and salaries paid in the corresponding period of the prior year. This is supposed to provide an incentive for additional hiring and pay increases and it applies to the last quarter of 2011 and all of 2012.
- It proposes an increase in the credit for hiring disabled vets who have been unemployed for six months or more from $4,800 to $9,600. It also creates two new credits for hiring veterans.
- It would create a tax credit of $4,000 for hiring workers unemployed for six months or more.
- It has an individual provision that would reduce the Social Security tax on individuals to 3.1% in 2012, extending and increasing the social security tax reduction in place in 2011.
Hiring an employee is big investment that is driven by demand for a business’ goods and services, not by tax gimmicks. The problem with this bill is that it is unlikely to accomplish the purpose of stimulating job growth. While these provisions would result in reduce labor costs, it is doubtful that it is enough to induce a company to hire someone they would not have already hired without the tax incentives. This bill could be an exercise in futility and a source of further economic uncertainty.
Firms 2011 Peer Review Completed
The Billups Company CPA’s recently and successfully completed a peer review of their quality control system with a rating of pass. Certified Public Accounting firms that perform auditing and accounting engagements are required to obtain an independent peer review of their quality control system. The goal is to determine whether it is designed and implemented in a way that assures that the firm’s accounting and auditing work meets the rigorous standards of the profession.
Billup’s review was completed in May and was accepted by the Peer Review Committee of the Oregon Society of Certified Public Accountants in a meeting in late July. Firms can receive a rating of “pass”, “pass with deficiencies”, or” fail”. The Billup’s Company’s rating on the review was “pass”. A copy of the report can be read below.
2010 Tax Relief Act-Individual Tax Extenders
Posted in Individual taxes, New Legislation, Taxation | Tags: income taxes, individual income taxes, New Legislation, tax law changes, tax planning, Taxation | 1 Comment »
Estate Tax Changes-Portability Rule
Estate and Gift Tax Changes for 2011
White House Signals Compromise on Bush Tax Cut Extension
IRS Delays Mandatory Health Benefit Reporting for 2011
Obama'S Deficit Commission Considers Elimination of Mortgage Interest Deduction
Posted in Individual taxes, New Legislation, tax credits, Taxation | Tags: individual income taxes, New Legislation, tax law changes, Taxation | No Comments »