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What a Payroll Tax Cut Could Mean For You
It seems that the House and the Senate are gridlocked when it comes to whether or not the government should extend the payroll tax cut holiday . Democrats had originally proposed extending the payroll tax cut to employers, which might have helped some business owners. For now, it seems that they’ve scratched that plan . But, Republicans are set to unveil their plan later this week. It’s unclear what they will propose. Which means employers may be wondering if the debate in Congress can ultimately affect their bottom line. The more employees you hire, after all, the more taxes you need to shell out. The current payroll tax holiday, set to expire at the end of the year unless Congress passes an extension, has given employees a bit of a break. Instead of paying 6.2% out of their income for Social Security, they’ve only been paying 4.2%. This comes out to an average savings of $1,000 a year . If the original proposal by the Democrats had been passed it’s possible that it could have benefited some small businesses by providing them with some much-needed relief. If you have 20 or 50 employees, as Entrepreneur points out, you could have ended up saving $20,000 or $50,000. House Speaker John Boehner is said to be attempting to get his tax cut plan passed , but the Republican is facing challenges within his own party. Reports are that some Republicans would block his plan. Rep. Boehner’s plan has also not been publicly released, meaning it’s unclear whether or not the payroll tax-cut plan would expand to employers. Related Resources: House Republicans divided over payroll tax cut (Reuters) Payroll Taxes (FindLaw) Small Business Owners: Time to Prep for 2012 (FindLaw’s Free Enterprise)