What’s New: Payroll Tax Cut Extended Through 2012

Congress passed an extension of the 2% payroll tax cut that had been scheduled to expire at the end of February. The extension means 160 million working Americans will continue to pay social security tax on their wages at a 4.2% rate for the rest of 2012, rather than at a 6.2% rate.

Tax Tip Tuesday! New Law Extends Payroll Tax Cut

The temporary reduction in the FICA tax rate that began in January 2011 as a replacement for the “Making Work Pay Credit” has been extended through December 2012. The 2% rate cut applies to wages, salaries and self-employment income of up to $110,100.

Time Your IRA Contributions For Maximum Growth

The tax rules give you a period of 15½ months to make contributions to an IRA for any given year. For example, you could contribute to a 2010 IRA as early as January 1, 2010, and as late as April 18, 2011.