Form 941 News and Highlights

You have no doubt heard of the changes to the Form 941 and the filing.  I've compiled a list of the highlights you may want to pay attention to before filing this year.

• One of the biggest changes - and hopefully you are already aware of this change - the EMPLOYEE tax rate for social security withholding is 4.2%.  The "matching" EMPLOYER tax rate remains the same at 6.2%.  Medicare remains at 1.45% for both.
• Also note that wages subject to social security maxes out at $106,800.
• Advance payment of earned income credit is no longer available - as of December 31, 2010. 
• I can't resist some editorial comment on this:  While I understand there has been some abuse of the EIC, I fail to see how requiring families to wait until after the end of the year and filing their tax return will do anyone much good. Many folks are struggling to survive - to keep a roof over their heads and feed their families - without this reduction in their monthly income. Decreasing the monthly income of families will do nothing to help our continued failing economy. And worse, while the US Treasury has made an effort to stop lower income families from getting large refunds when the file the taxes because they've found the refunds get spent on unneeded luxury items rather than needed to sustain a household, this change will do nothing to assist in alleviating this concern.
• Your payroll tax payment MUST, I repeat MUST, be made via the Electronic Federal Tax Payment System (EFTPS). You can no longer take a paper coupon (Form 8109) to your bank with a check.

To enroll in EFTPS