After President Barack Obama signed the tax rate changes into law, IRS released the new updated income-tax withholding tables for 2013 on Jan 3. The revised withholding tables show the new rates in effect for 2013 and supersede the tables published on Dec 31, 2012.

Click here to see 2013 Percentage Method Tables for Income Tax Withholding. We have released the new 2013 ezPaycheck Payroll Software for the tax changes.

What's New

2013 withholding tables.  This notice includes the 2013 Percentage Method Tables for Income Tax Withholding. Employers should implement the 2013 withholding tables as soon as possible, but not later than February 15, 2013. Use the 2012 withholding tables until you implement the 2013 withholding tables.

Social security tax. 
For 2013, the employee tax rate for social security increases to 6.2%. The social security wage base limit increases to $113,700.

Employers should implement the 6.2% employee social security tax rate as soon as possible, but not later than February 15, 2013. After implementing the new 6.2% rate, employers should make an adjustment in a subsequent pay period to correct any underwithholding of social security tax as soon as possible, but not later than March 31, 2013.

Medicare Tax
The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2012. There is no wage base limit for Medicare tax.

Additional Medicare Tax Withholding
In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.

Percentage Method Tables for Income Tax Withholding
You can view 2013 Federal Tax Table here

http://www.halfpricesoft.com/federal_income_tax_2013.asp

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Relateted Link

FAQs about 2013 ezPaycheck Software Updates

http://www.halfpricesoft.com/business-blog/post/2013/01/04/FAQs-about-Year-2013-Payroll-Software-Updates.aspx

The IRS announced that several new changes would be in effect for tax year 2012. These changes were made due to inflation and will have an impact on nearly every taxpayer in the country.

·                      The tax rate for social security is 6.2% each for the employee and employer. (It was 4.2% for employee in Year 2011)

·                      The social security wage base limit is $110,100. (It was $106,800.00 in Year 2011)

·                      Personal and dependent exemptions: $3800 (It was $3,700 in Year 2011)

·                      An increase in tax-bracket thresholds

Federal Tax Table

http://www.halfpricesoft.com/federal_income_tax_2012.asp

State income tax is imposed at a fixed or graduated rate on the taxable income of individuals, corporations, and certain estates and trusts. The rates vary by state.

Followings are the US states with no income tax.

Related Links

The nation's only statewide tax vote on the November ballot asks Colorado voters whether they want to temporarily raise taxes to generate $3 billion for classrooms and colleges — a proposal that has stirred fierce opposition because of the stagnant economy.

The vote could serve as a test of voters' mood on tax increases and their frustration after endless rounds of education cuts in Colorado.

The measure would raise individual and corporate tax rates from 4.63 percent to 5 percent and Colorado's sales and use tax rate from 2.9 percent to 3 percent. The rates would be in effect from 2012 through 2016, with an estimated $2.9 billion in new revenue during that time going to K-12 schools and public colleges.

Learn more at: http://www.msnbc.msn.com/id/45095450/ns/us_news-life/

View current CO State Income Tax Table at:

http://www.halfpricesoft.com/2011/taxrate-colorado-2011.asp

Do you know nearly half of tax filers do not pay federal tax? According to the nonpartisan Tax Policy Center in Washington, D.C., 46% of tax filers will owe no federal income tax this year.

Most of them are the lowest-income Americans. However those making $75,000-$100,000 a year are the fastest-growing share of people who don't pay federal income taxes. Tax Cuts and tax breaks are the main reasons for the change.

2011 Federal Income Tax Tables
http://www.halfpricesoft.com/federal_income_tax_2011.asp

Read more at: http://www.usatoday.com/money/economy/story/2011-10-06/income-tax-nonpayment/50676912/1

FICA stands for the Federal Insurance Contributions Act.  FICA taxes are comprised of two separate taxes, social security and Medicare taxes, that are paid on wages earned for services performed.  Employers withhold and pay their employees’ share of the FICA taxes and also pay the employer share.

For Year 2011, the maximum taxable earnings amount for Social Security is $106,800. The Social Security tax (OASDI) rate for wages paid in 2011 is 4.2 percent for employees and 6.2 percent for employers.

The Medicare Taxes Rate is 1.45% for both employers and employees.

Federal Income Tax Table

http://www.halfpricesoft.com/federal_income_tax_2011.asp

The Social Security tax is a payroll tax that was started by the United States Government in the 1930s. This tax is imposed upon working people and their employers.

For 2011, the maximum taxable earnings amount for Social Security is $106,800. The Social Security tax (OASDI) rate for wages paid in 2011 is 4.2 percent for employees and 6.2 percent for employers. 

For example, an individual with wages equal to or more than $106,800 would contribute $4,485.60 to Social Security in 2011.  The employer would contribute $6,621.60.

Related Link:

Federal Income tax Table

http://www.halfpricesoft.com/federal_income_tax_2011.asp

The Social Security Administration has released the proposed figures for the increase in the wage base for taxation for 2012 and projected some figures for the years up to 2015.

The Social Security wage base, now at $106,800, is projected to increase to $110,700 in 2012, according to the annual report of the Social Security Board of Trustees. Also – in 2012, the temporary 2% reduction in the Social Security withholding tax will expire.

This will increase the social security tax paid by high wage earners from $4,485.60 (in Year 2011) to $6,863 (in Year 2012).

Future wage bases have been projected for the years up to 2015 as well:  for 2013, the base is projected at $113,100; for 2014, $117,600; and for 2015, $122,700.

Related link:

Current federal income tax table:

http://www.halfpricesoft.com/federal_income_tax_2011.asp

I would like to recommend this article. It explains why rich people can avoid the taxes without high-priced lawyers under our current tax system.

How I Paid Only 1% of My Income in Federal Income Tax

http://www.huffingtonpost.com/eric-schoenberg/how-i-paid-1-of-my-income_b_852948.html

While the Republicans talk about the "shared sacrifices" necessary to close our government's budget deficit, their plan imposes pain mostly on the sick, the elderly, and the poor. Asking the rich to sacrifice by paying higher tax rates surely pales in comparison. I believe that having wealthy investors pay taxes at the same rate as middle-class workers would be an important step towards making sure that we all contribute to putting our fiscal house in order.

I agree.