Get Ready For Payroll Tax Teeter-Totter
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 January 1, 2012 or not. There is a chance that the extension of the law may occur early in 2012 and be retroactive to January 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 that 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 the 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 you warn you that it might.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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