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YEAR 2010
PAYROLL TAX HIGHLIGHTS
Below, we have
summarized the major changes, as of this date, which will affect your payroll
tax calculations effective January
1, 2010.
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Federal
Individual Income Tax
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New Jersey Individual Tax
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Rates remained the same for 2010. Some of the tax bracket amounts have
changed only slightly after inflation adjustments, and standard deductions
have remained unchanged for 2010.
There is no phase-out of personal exemptions for 2010. The personal exemption for 2010
remains at $3,650. (See
schedule 1 for tax brackets, rates and standard deductions).
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New Jersey individual tax rates for 2010
will revert to the rates for tax year 2008. The tax rates start at 1.4% with a graduating
tax schedule rising to a maximum tax rate of 8.970% (See schedule 2 for tax
brackets and rates).
Pennsylvania Individual Tax
The Pennsylvania
individual income tax withholding rate remains at 3.07% for 2010.
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Social
Security Tax
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Philadelphia Wage Tax
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Social security tax is broken into two sections, Social
Security and Medicare. The
following is each section's rate and base for 2010:
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The withholding rate for Philadelphia
City Wage Tax was reduced, effective July 1, 2009, to 3.9296% (.039296) for residents and
3.4997% (.034997) for non-residents.
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Social Security
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Medicare
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Rate
Base
Maximum
Employer
Portion
Maximum
Employee
Portion
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6.2%
$106,800
$6,621.60
$6,621.60
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1.45%
Unlimited
Unlimited
Unlimited
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Federal
Unemployment Tax
Federal Unemployment Tax remains at 6.2% with a maximum
state credit of 5.4% for a net tax of .8% (.008) on the first $7,000 of
wages per employee.
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Pennsylvania
The maximum taxable wages for Pennsylvania Unemployment
remains at $8,000 per employee.
The surcharge on employer contributions remains at 5.8% (.058). The employer additional contribution
increases to 0.65% (.0065).
Additionally, the percentage of employee wages required to be withheld as unemployment compensation tax increases
to 0.08% (.0008). This 0.08%
tax does not have a wage limit.
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New Jersey
The maximum taxable wages for New Jersey Unemployment
and Disability will increase to $29,700 per employee. The withholding rate will increase
to 1.045% (.01045). The
employee percentage is divided as follows:
0.3825%
Unemployment
0.0425%
Workforce Development
0.5000%
Disability
0.1200%
Family Leave Insurance
1.0450%
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IMPORTANT REMINDERS
401(k)
Limits
The maximum employee contributions will remain at
$16,500 for 2010. Please note
that this contribution is limited to the lesser of $16,500 or the
percentage of wages specified in your 401(k) Plan document. The maximum employee contributions
for employees age 50 or older is $22,000 for 2010. The contribution is limited to the
lesser of $22,000 or the percentage of wages specified in your 401(k) Plan
document.
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Minimum
Hourly Wage
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Amount
Effective Date
Federal
$7.25
July 24, 2009
New Jersey
$7.25
July 24, 2009
Pennsylvania
$7.25
July 24, 2009
PA
Small
Employers*
$7.25
July 24, 2009
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*Employers with equivalent of 10 or fewer full-time
employees calculated on a 40-hour work week.
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Quickbooks
Please note that if you have payroll with Quickbooks and
you keep current with all the payroll updates, Quickbooks makes the changes
automatically.
Who
to contact
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If you have any questions please contact:
Fred Schutz
Tax Manager
856-722-5300 ext 201
email: fred.schutz@hfco.com
Phil
Duncker
Tax Manager
856-722-5300 ext 401
email: phillip.duncker@hfco.com
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The information contained herein is general in
nature and is based on authorities that are subject to change. It is not intended, and should not be
construed, as legal, accounting or tax advice or opinion provided by Haefele, Flanagan & Co., PC to the reader. This material may not be
applicable to, or suitable for, the specific circumstances or needs, and may
require consideration of non-tax and other tax factors. Contact Haefele,
Flanagan & Co., PC prior to taking any action based upon this
information. Haefele, Flanagan & Co., PC assumes no obligation
to inform the reader of any changes in tax laws or other factors that could
affect the information obtained herein.
FEDERAL PERSONAL
INCOME TAX RATES FOR 2010
Taxable Income Tax
Bracket
But Not
Over
Over
Single
Individuals
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$
-0- -
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$
8,375
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10% of the taxable income
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8,375 -
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34,000 -
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$837.50 plus 15% of the excess over $8,375
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34,000 -
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82,400 -
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$4,681.25 plus 25% of the excess over $34,000
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82,400 -
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171,850 -
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$16,781.25 plus 28% of the excess over $82,400
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171,850 -
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373,650 -
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$41,827.25 plus 33% of the excess over $171,850
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373,650 -
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Over
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$108,421.25 plus 35% of the excess over $373,650
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Standard Deduction $5,700
There is no phase-out of
personal exemptions for 2010
Married
Filing Jointly and Surviving Spouses
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$
-0- -
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$ 16,750
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10% of the taxable income
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16,750 -
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68,000
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$1,675 plus 15% of the excess over $16,750
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68,000 -
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137,300
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$9,362.50 plus 25% of the excess over $68,000
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137,300 -
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209,250
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$26,687.50 plus 28% of the excess over $137,300
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209,250 -
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373,650
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$46,833.50 plus 33% of the excess over $209,250
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373,650 -
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Over
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$101,085.50 plus 35% of the excess over $373,650
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Standard Deduction $11,400
There is no phase-out of
personal exemptions for 2010
Married
Filing Separately
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$
-0- -
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$
8,375
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10% of the taxable income
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8,375 -
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34,000
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$837.50 plus 15% of the excess over $8,375
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34,000 -
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68,650
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$4,681.25 plus 25% of the excess over $34,000
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68,650 -
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104,625
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$13,343.75 plus 28% of the excess over $68,650
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104,625 -
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186,825
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$23,416.75 plus 33% of the excess over $104,625
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186,825 -
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Over
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$50,542.75 plus 35% of the excess over $186,825
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Standard Deduction $5,700
There is no phase-out of
personal exemptions for 2010
Head of Household
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$ -0-
-
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$ 11,950
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10% of the taxable income
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11,950 -
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45,550
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$1,195 plus 15% of the excess over $11,950
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45,550 -
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117,650
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$6,235 plus 25% of the excess over $45,550
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117,650 -
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190,550
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$24,260 plus 28% of the excess over $117,650
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190,550 -
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373,650
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$44,672 plus 33% of the excess over $190,550
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373,650 -
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Over
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$105,095 plus 35% of the excess over $373,650
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Standard Deduction $8,400
There is no phase-out of
personal exemptions for 2010
*See Circular E for withholding amounts that
should be made through payroll.
NEW JERSEY INCOME TAX RATES FOR 2010
Please
note that these rates are New Jersey Income Tax Rates, not Withholding Tax Rates. The New Jersey Withholding Tax Tables
for 2010 can be found at
http://www.state.nj.us/treasury/taxation/pdf/whtables2010.pdf.
FOR MARRIED PEOPLE FILING JOINTLY, HEADS OF HOUSEHOLDS
AND SURVIVING SPOUSES
Taxable Income Tax Rate
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Not over $20,000
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1.4%
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$20,001 - $50,000
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$280 plus 1.750%
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of excess over $20,000
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$50,001 - $70,000
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$805 plus 2.450%
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of excess over $50,000
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$70,001 - $80,000
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$1,295.50 plus 3.500%
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of excess over $70,000
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$80,001 - $150,000
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$1,645 plus 5.525%
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of excess over $80,000
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$150,001 - $500,000
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$5,512.50 plus 6.370%
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of excess over $150,000
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Over $500,000
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8.97% of excess over $500,000
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FOR TAXPAYERS WHOSE FILING STATUS IS
SINGLE OR MARRIED PEOPLE FILING SEPARATE RETURNS
AND ESTATES AND TRUSTS THE RATES ARE:
Taxable Income Tax Rate
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Not over $20,000
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1.4%
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$20,001 - $35,000
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$280 plus 1.750%
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of excess over $20,000
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$35,001 - $40,000
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$542.50 plus 3.500%
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of excess over $35,000
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$40,001 - $75,000
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$717.50 plus 5.525%
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of excess over $40,000
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$75,001 - $500,000
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$2,651.25 plus 6.370%
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of excess over $75,000
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Over $500,000
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8.97% of excess over $500,000
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