2013 Social Security Update

The maximum taxable wage base for Social Security for 2013 will rise to $113,700 from $110,100. Monthly Social Security benefits will increase 1.7 percent, increasing the average monthly benefit to $1,261 from $1,240. For retirees under full retirement age, the retirement earnings test exempt amount will rise to $15,120 from $14,640. For every $2 of earnings above this limit, $1 of benefits will be withheld.

Payroll Tax Cut Extended Through 2012

After much negotiation, Congress has extended the two-percent payroll tax cut for employees through the end of 2012.  The Temporary Payroll Tax Cut Continuation Act of 2011 (2011 Tax Cut Act) had temporarily extended the tax cut through the end of February.  However, the Middle Class Tax Relief and Job Creation Act of 2012 (2012 Job Act) now extends the employee payroll tax holiday through the end of 2012 and repeals the 2011 Tax Cut Act recapture provision.

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Social Security Statement Now Available Online

From the SSA: Last year the Social Security Administration (SSA) suspended the mailing of the annual benefit estimate statements due to federal budget considerations. Recently, the agency resumed sending the statement, but only to people who are 60 and older and who are not yet on benefits; people younger than 60 will not have a statement mailed to them. However, an online service is now set up that allows people age 18 and older to register and create a personal My Social Security account, where you can get benefit estimates, view your yearly earnings history and also get general information about Social Security. Visit http://www.ssa.gov/ and click on "Get Your Social Security Statement Online."

2012 Philadelphia Wage Tax Rate

The Philadelphia Revenue Department announced the following wage/earnings tax rates for the first half of 2012.  Specifically, the tax rate for January 1, 2012 through July 31, 2012 is:

Residents............3.928%

Nonresidents.......3.4985%

U.S. Supreme Court's Decision on Health Care Law

On June 28, 2012, the United States Supreme Court issued its long-awaited decision on the consitutionality of the Patient Protection and Affordable Care Act (PPACA) and its companion law, the Health Care and Education Reconciliation Act (HCERA). In a nutshell, the nation's highest court upheld the law - except for certain Medicaid provisions. The 5 to 4 decision preserves many far-reaching tax provisions and health insurance reforms. In coming months, lawmakers and legal scholars will examine all of the nuances of the Court's highly complex decision. More immediately, individuals and businesses are concerned about what steps they need to take next.

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2012 Social Security Update

The maximum taxable wage base for Social Security for 2012 will rise to $110,100 from $106,800.  As such, the maximum tax will increase by $204.60 to $6,826.20.  Monthly Social Security benefits will increase 3.6 percent, increasing the average monthly benefit to $1,229 from $1,186.  For retirees under full retirement age, the retirement earnings test exempt amount will rise to $14,640 from $14,160.  For every $2 of earnings above this limit, $1 of benefits will be withheld.