Encourage clients to make the most of their payroll tax cut
For 2011 only, new tax law imposes a historic reduction in Social Security (FICA) taxes, cutting by two percentage points the employee’s portion of the 6.2% tax. Savings per worker will vary with income, but could be as much as $2,136 for those earning $106,800 or more, the maximum amount subject to Social Security tax. According to government estimates, this reduction will affect approximately 150 million workers and will provide as much as $120 billion in economic stimulus.
Encourage your clients to make the most of these temporary savings by funding investment accounts, retirement plans, or college savings accounts such as a 529. This simple suggestion may prompt a deeper discussion on personal investing needs.