Encourage clients to make the most of their payroll tax cut

Encourage clients to make the most of their payroll tax cut

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.

More in: Taxes