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Payroll

Rates and Limits

 

Qualified Transportation Expenses

IRS Section 132(f) limitations on excludable income for transportation fringe benefits that may be excluded from employee's income, federal employment taxes, FIT, FICA and FUTA are:

  • $240.00 for van pools/car pooling /mass transit/bus passes
  • $240.00 for parking

FICA Limits

The 2012 social security wage base increases to $110,100. The social security tax rate for employees will be 4.2% until February 29, 2012 or until the federal government acts to extend or change the rate. The employer portion remains the same at 6.2% and the maximum social security tax employees pay is $4,624.20 and the employers pay is $6,826.20.

Personal Income Tax

 

The 2012 standard deduction will be:

  • $5,950 for single taxpayers
  • $11,900 for married taxpayers filing jointly
  • $8,700 for heads of households
The supplemental wage taxation percentage is 25%.


Standard Mileage Rates

The IRS issued documentation giving the optional mileage rates for use in computing the deductible costs of operating an automobile for business and other purposes.

  • Business Mileage Rate – 55.5 cents per mile
  • Medical Care or Moving Expenses – 23.5 cents per mile
  • Deduction for Charitable Use of an Automobile – 14 cents per mile

Medicare

There is no limit to the wages subject to the Medicare tax.  All covered wages are subject to a 1.45% tax.

 

Adoption

The adoption expense exclusion from employee income in employer-provided qualified adoption program in 2012 is $12,650, down from $13,170 in 2011.

 

Internal Revenue Code Annual Limits on 401(k) Plan Compensation and Contributions

  • The limit on combined pre-tax and Roth after-tax contributions in 2012 increases to $17,000 up from $16,500 in 2011.
  • The limit on catch-up contributions for individual age 50 or older remains at $5,500.00.
  • The limit on total employee plus employer contributions, i.e. “annual additions,” increases to $50,000 (excluding catch-up contributions) up from $49,000 in 2011.
  • The limit on compensation used for calculating employer match and employer contributions increases to $250,000 (or $375,000 if first participated in the plan prior to 1/1/96).