ADP® Assists Businesses in Addressing Impact of 2013 Tax Law Changes
ROSELAND, N.J., March 13, 2013
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
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
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
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
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 ofhuman resource, payroll,talent management,
taxandbenefits administration solutionsfrom 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 toauto, truck,
motorcycle, marine, recreational vehicle, and heavy equipment
dealersthroughout 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
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