Browsing articles in "Tax"

Small Business Bookkeeping: Social Security Wage Base Increases

Nov 2, 2011   //   by Gina Lynd   //   Small Business Bookkeeping, Tax, The Shoe Box Blog  //  No Comments

Legislative Updates

Social Security Wage Base Increases for 2012

On October 19, 2011, the Social Security Administration announced that the 2012 Social Security contribution and benefit base will be $110,100. This is $3,300 more than the base of $106,800 which has been in effect the last three years. The Social Security Old-Age, Survivors, and Disability Insurance (OASDI) program sets an annual maximum limit (called the contribution and benefit base) on the amount of earnings subject to the Social Security OASDI tax. Employers must deduct Social Security taxes from their employees’ pay and contribute to Social Security taxes themselves on total OASDI-covered wages paid to each employee, up to the annual OASDI contribution limit. The OASDI limit typically changes each year with changes in the national average wage index.

In contrast to the OASDI limit, there is no limit to the wages subject to the Medicare tax. In 2012, all covered wages will remain subject to the 1.45% Medicare tax. Employees and employers must pay the Medicare tax based on total Medicare-covered wages.

The 2011 OASDI tax rate is 6.2% for employers and, as a result of the Tax Relief Act of 2010, 4.2% for employees. The 2012 OASDI tax rate for employees is scheduled to be 6.2%. However, there are various proposals currently under consideration in Congress which, if adopted, would reduce the OASDI rate for 2012 below 6.2%, for both employers and employees. If Congress takes no action, the 2012 OASDI rate will be 6.2% for employees and employers. Should the 2012 OASDI rate be 6.2% for employees and employers, the maximum Social Security tax each employee will pay and each employer will pay per employee is $6,826.20.


This content is subject to change and is provided solely as a courtesy and should not be construed as tax or legal advice.   ADP 2012

Small Business Bookkeeping: Legislative Change Regarding Late Filing Penalties

Oct 10, 2011   //   by Gina Lynd   //   Small Business Bookkeeping, Tax, The Shoe Box Blog  //  No Comments

Legislative Change Regarding Late Filing Penalties
Senate Bill 1 Special Session
Article 14 (Effective Oct. 1, 2011)

Beginning with reports originally due on or after Oct. 1, 2011, certain taxpayers will be assessed a $50 penalty when a report is filed late under a new law passed by the 2011 Texas Legislature. The penalty will be assessed regardless of whether the taxpayer subsequently files the report or whether any taxes or fees were due from the taxpayer for the period covered by the late-filed report. The $50 penalty is due in addition to any other penalties assessed for the reporting period.

As always, a report must be filed for each reporting period even if no tax is due.

Taxes or fees affected by this provision are:

  • 9-1-1 prepaid wireless emergency service fee;
  • fireworks tax;
  • franchise tax;
  • hotel occupancy tax;
  • maquiladora export tax;
  • mixed beverage gross receipts tax;
  • motor fuels tax;
  • motor vehicle gross rental receipts tax;
  • motor vehicle seller financed sales tax;
  • sales and use tax (including direct pay); and
  • the off-road, heavy-duty diesel equipment surcharge.

For details about these changes, please visit Publication 98-918 – Late Filing Penalties (PDF) on our website, Window on State Government.


Texas Tax Deadline

Oct 6, 2011   //   by Gina Lynd   //   Small Business Bookkeeping, Tax, The Shoe Box Blog  //  No Comments


Due to the Bastrop fires, personal tax return deadline has been extended until 10/31/11.


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"Gina was very helpful getting our personal taxes in line. She was able to look through what I had collected over several years and help me decide what to do. She also had good ideas about how to keep better records to make life easier in the future."

- Chris Rowe, Austin, TX

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