The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Get Ready for the Payroll Tax Teeter-Totter!
Dec 19, 2011
With the wrangling over the extension of the payroll tax between the House, Senate and President, we may not know if the payroll tax cut is in place on Jan. 1, 2012, or not. There is a chance that the extension of the law may occur early in 2012 and be retroactive to Jan. 1, 2012. We hope that this does not happen, but recent history shows there is a good chance of it occurring.
The primary issue for our farmers is whether the payroll tax software they use is timely updated for these changes. Right now, the law says there will be NO payroll tax cut in 2012; therefore, most of the software companies have programmed their software for this. However, if a new law is passed either at the end of this month or early next month, the software may not get updated for your first payroll. This may cause it to be wrong and changes will need to be performed to get the right amount of pay to your employees and report the right taxes on your Form 943 at year-end or Form 941 for the first quarter.
We hope it does not get messy, but want to warn you that it might.