ROSELAND, N.J., March 13, 2013 /PRNewswire/ -- ADP®,
a leader in human resource and payroll outsourcing solutions,
highlighted today several important steps small-business owners can
take to help navigate changes stemming from the recently enacted
American Taxpayer Relief Act (ATRA). By carefully selecting
an employer-sponsored tax-qualified retirement plan, business
owners can get much-needed relief from tax increases they
experience as a result of ATRA, with the added benefit of helping
their employees prepare for retirement.
Passed late last year, ATRA created several important changes to
the tax law for both income and payroll taxes in 2013. The Act
effectively maintains the reduced income tax rates adopted in 2001
and 2003 for individuals earning up to $400,000 and joint filers earning less than
$450,000. Income above those levels
will be taxed at 39.6 percent, up from 35 percent. The expanded 15
percent bracket for joint filers, commonly referred to as marriage
penalty relief, also was extended. These tax rates were extended
permanently for wages paid after Dec. 31,
2012.
Meanwhile, employee Social Security tax rates jumped to 6.2
percent for 2013 wages, up to the taxable wage limit of
$113,700. In 2011 and 2012, the
Social Security tax rate was 4.2 percent. For more
information about ATRA and the resulting tax law changes, click
here to view a video featuring ADP Retirement Services'
Chris Augelli.
"Taxes are rising for all Americans, regardless of age or income
bracket," said Chris Augelli, vice
president of product marketing and business development for ADP
Retirement Services. "The good news is that employer-sponsored tax
qualified retirement plans can provide some relief in this new
financial environment."
In 2013, workers can invest more of their pre-tax earnings in an
employer-sponsored retirement plan. The maximum an individual
employee can contribute to a 401(k) plan is $17,500, up $500
from last year. Individuals ages 50 and older can now contribute an
additional $5,500 in "catch-up
contributions" in their 401(k) accounts. This is $500 more than was allowed last year.
Similarly, individuals participating in a SIMPLE IRA plan can
contribute an additional $500 to
their IRAs in 2013, up to a maximum of $12,000 per year. Those who are 50 and older can
make an additional $2,500 in catch-up
contributions, also a $500 increase
over last year's limit.
"One of the advantages of these plans is they allow people to
save for the future with pre-tax dollars," said Augelli. "This
lowers their current federal taxable income, which may enable them
to pay less in federal income taxes and take more income home."
ADP's retirement plans are easy-to-manage and provide the
resources, materials and online tools employees need to become
retirement ready. ADP works with companies to provide retirement
savings plans that are tailored to employers' specific needs and
align with their strategic business goals.
"ADP does not sponsor or manage its own investment funds, so we
can be objective about investment options in our plans," said
Augelli. "In this regard, our clients never have to worry about a
conflict of interest with regard to fund make-up, and we fully
disclose our compensation we earn from the investment funds we make
available. They know the information we provide to them is based
solely on what is best for their business and their employees. And
we're always here to help clients understand the latest laws,
regulations and best practices for ensuring a secure retirement,
regardless of the economic or political climate."
For more information on how ADP can help you access a new road
to retirement, call us today at 800-432-401k or visit us on the Web
at www.adp.com/401k.
ADP maintains a dedicated team of professionals who carefully
monitor all federal and state legislative and regulatory measures
affecting human resource, payroll, tax and benefits administration,
and ensure that ADP systems are updated as relevant laws evolve.
For the latest on late-breaking federal tax law changes, visit the
ADP "Eye on Washington" web page
located at www.adp.com/regulatorynews.
Please note: ADP "Eye on Washington" notices are provided as a courtesy
to ADP clients to assist in understanding the impact of certain
regulatory requirements. They should not be construed as tax or
legal advice, and interested parties are encouraged to consult with
appropriate legal and/or tax advisors.
About ADP
ADP® (NASDAQ: ADP), with more than $10
billion in revenues and approximately 600,000 clients, is
one of the world's largest providers of business outsourcing and
human capital management solutions. Leveraging over 60 years of
experience and a global footprint spanning more than 40 countries,
ADP offers a wide range of human resource,
payroll, talent management, tax and benefits
administration solutions from a single source, and helps
clients comply with regulatory and legislative changes, such as the
Patient Protection and Affordable care Act (ACA). ADP's
easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading provider of
integrated computing solutions to auto, truck, motorcycle,
marine, recreational vehicle, and heavy equipment
dealers throughout the world. For more information about ADP
or to contact a local ADP sales office, reach us at 1.800.225.5237
or visit the company's Web site at www.adp.com.
Contact:
Jim Duffy
ADP
(973) 712.2070
Jim.Duffy@adp.com
SOURCE ADP