Payroll tax holiday

[tafromkc]

Will the SS payroll tax be reduced to 4.2% for both employees and employers?

[Kung Fu Panda]

I believe it is only employees from what I see. It replaces the tax stimulus $400 check that was sent out in 2009

[Deleted]

So is anyone else planning on diverting the money to retirement savings? I am. With a pension (which costs 5%) and a Roth plus only earning $60,000, there is no way I ever max out my 403b. I think it is the smartest way to "spend" the money although I thought about investing it in a taxable account, too.

[cronewitch]

It is only on the employee so the software needs changed or we need to do 941 forms manually. I do anyhow since I merge different payrolls but it is always a pain when they mess with taxes.

[ihearyou2]

Yep only employee there was questions about what would generate greater stimulus many thought that the employer was the better approach but there you go. This one wasn't popular on both sides of the fence. The conservatives wanted to help the employers and the liberals wanted to help the poor and since they don't make so much they won't get the maximum deduction like the people that make six figures.

[Plain Old Petunia]

Which software do you use? We use Creative Solutions, and it typically handles payroll tax changes extremely well. Here's to hoping that this is another one of those times!

[trimatty471]

I think I would divert the money to my retirement accounts.

[Wisconsin Beth]

"So is anyone else planning on diverting the money to retirement savings?"

DH and I are discussing it.

His thought is to change his deductions to M4 and then dumping the money into his IRA.

My thoughts are 1. bump up our 401/457 contributions by 2% or 2. set up a "retirement" taxable account or 3. into IRAs/college funds. We do 20% to the 401/427 already and around 90%+ of our retirement money is there so we should probably be starting to look at other options... We have no long-term taxable account and no college funds started either. I'm ok with dumping it into his IRA for now. My IRA is in a CD until August so whatever we do to his, we'll probably shift mine to mimic his (within my risk tolerance) when the CD expires.

We briefly considered using it to speed up our debt payoff (car should be done in June 2012; HELOC should be done around June 2013 while the house and vac land both have years to go.)

[joynerk]

Put it in gold or silver! Something tangible!!

[❤ mollymouser ❤]

OOOhhh! Buy jewelry! I'll drink to THAT! (grin)

[joynerk]

MM - finally convinced dh that jewelry and precious stones are *almost* as good as bullion and coins ;D Christmas should have lots of tinsel!!

[tafromkc]

I'd prefer to put it into steel and lead. But maybe I'm being pessimistic about things in general.

[❤ mollymouser ❤]

Dec 21, 2010 17:00:56 GMT -5 @joynerk said:

MM - finally convinced dh that jewelry and precious stones are *almost* as good as bullion and coins ;D Christmas should have lots of tinsel!!

YAY! ;D

[cronewitch]

Which software do you use? We use Creative Solutions, and it typically handles payroll tax changes extremely well. Here's to hoping that this is another one of those times!

We use Forefront now called Spectrum.

[suzwantstobefree]

Well, I would have liked to see this tax savings for both the employees and the employers, but I will take what I can get. I am going to put the savings into my 401K and that will mean over $2100 more to retirement savings this year. I doubt that is what Obama wants me to do with it, but I want to have a lot of money when I am ready to retire!