Diana both New Jersey and Pennsylvania are Employee only States, so this news is very relative to those of us that live in these States. Thanks for pointing this out! Sent from my Verizon Wireless BlackBerry
-----Original Message----- From: Diana Bonn <[email protected]> Sender: [email protected] Date: Mon, 06 Sep 2010 08:55:31 To: <[email protected]> Reply-To: [email protected] Subject: NailTech:: another boring tax lesson/HIRE ACT Just ran across this. I don't know how many EMPLOYEE based salon owners we have on the list, or maybe this concerns a family member but...HIRE Act was signed in March of 2010. The Administration wants business to hire new employees and they are giving employers a tax holiday. Just for your information, when you are an employee you get a pay check. If you look at your paycheck you will see a deduction or withholding on your paycheck stub of social security and medicare, 6.2% of your income for social security and 1.45% of your income for medicare. (for example: $500.00 income x 1.62% S.S. = $31.00. $500.00 income x 1.45 medicare = $7.25). This $38.25 (31.00+7.25) comes out of YOUR income, This is what YOU pay. Your employer will send $38.25 to the IRS in your name, and this is what you get when you retire. Think of it as a savings account. Then what many don't know and usually is not listed on your paycheck stub is the employer ALSO sends and ADDITIONAL 6.2%(example 31.00) for your social security and 1.45% (7.25)for medicare. The employer sends ($38.25) to the IRS in your name and this is what you get when you retire. Think of it as a savings account. So with your contributions($38.25) and with your employers contributions(38.25) over the years, it adds up and this is what your social security/medicare is when you retire. You probably get a statement every year. (what is scary are those that are independent contractors and don't pay their taxes because they don't have an employer don't realize that then there will be ZERO social security for you because you didn't pay in the first place) So now since I've explained how it works, now for the HIRE Act. If you hire a NEW employee starting for the period of February 3, 2010 thru December 2010, the employer DOES NOT have to pay the social security part of the withholding, 6.2%(31.00) The employer must still pay the 1.45% medicare part. The employee withholding is still the same. The 6.2% is a tax holiday for the EMPLOYER to help stimulate the economy. The new employee must have been unemployed for 60 days prior to the hiring, and if they did work, 40 hours maximum in the whole 60 days. There is no age limit, seasonal work or students. This does not affect current employees, only new employees. Cannot be used to replace an employee (kind of odd the way the explain it, the x employee must have been terminated or quit voluntarily?????) The employee must sign a form to agree to it. The employer does not have to agree to have a tax holiday. The links below, one for the IRS have FAQ, and also found a couple of websites that explains it a little better. I think that the reason the employee has to sign to agree to this, is because if you remember the employer pays your social security ($31.00)and you get it when you retire. If the employee agrees to this, you will not get this money back, it is gone. But if you are out of a job does this small amount really add up over a 10 month period to make a difference? Know this is boring to some, but when I owned the salon, I did all my own payroll, and this would be major news to me if I just read this and had hire new employees!! diana from indiana http://www.irs.gov/businesses/small/article/0,,id=220745,00.html http://www.mcguirewoods.com/news-resources/news/5016.asp http://www.littler.com/PressPublications/Lists/ASAPs/DispASAPs.aspx?id=1474 -- You received this message because you are subscribed to the Google Groups "NailTech" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/nailtech?hl=en. -- You received this message because you are subscribed to the Google Groups "NailTech" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/nailtech?hl=en.
