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On Friday, December 17th, 2010, the president signed into federal law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act. This legislation includes some tax changes that affect all employers.
Important tax change to note:
The new law reduces the Social Security payroll tax for individuals (not the employer share) from 6.2% to 4.2% in 2011.
If your business uses an outside company to process your payroll, your payroll company should make the necessary changes. If you process your own payroll, you will need to adjust the employee share of social security payroll tax (also known as OASDI) to 4.2% (formerly 6.2%) effective with payments made after December 31, 2010.
Other measures included in the new tax law:
- Extension for 2010 and 2011 of 15-year depreciation for restaurant new construction/improvements
- Extension through 2012 of the Bush tax cuts (individual rates, dividends and capital gains) for all taxpayers
- Reinstatement of the estate tax for 2011 and 2012 at a 35% rate with a $5 million exemption
- Allow businesses to fully expense capital investments in 2011
- Extend the Alternative Minimum Tax (AMT) “patch” for 2010 and 2011 to prevent millions from paying the AMT
- Extend through 2011 funding for emergency unemployment benefits
- Extension for 2010 and 2011 of the enhanced charitable deduction for contributions of food inventory
- Extension through 2011 of energy tax incentives including those for ethanol
- Extension through 2011 of the Work Opportunity Tax Credit
More information from the National Restaurant Association
Questions? Contact the WRA Hotline Team at 800-589-3211 or email your question. |
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Tax Changes
