Ask the COMMUNITY expert Taxes NEWS
WHAT TRUMP’S PAYROLL TAX CUT WILL MEAN FOR YOU IS IT REALLY A CUT?
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ince negotiations for another stimulus bill are going nowhere, President Trump issued a series of executive orders to help financially distressed Americans. One of the executive orders (actually an executive “memorandum”) suspends the collection of Social Security payroll taxes from September 1 until the end of the year for workers making less than $4,000 for any bi-weekly pay period (that’s $2,000 per week, or $104,000 per year). There are plenty of lawmakers on both sides of the aisle who don’t favor a payroll tax cut (or deferral). It’s not enough and doesn’t benefit people who need help the most, they say. ADP, the largest payroll processor and many employers have also said they won’t comply with the order. Nevertheless, the president has wanted a payroll tax cut for months – and now he finally
has one (sort of). As a result, if you make less than $104,000 per year, your paychecks could be a little bigger for the rest of 2020 (assuming you’re fortunate enough to have a job). But think twice before spending the extra money, because here is the kicker: YOU WILL HAVE TO REPAY THE TAXES WHEN YOU FILE YOUR TAX RETURN NEXT YEAR!!!!!!!! Under the president’s executive order, your share of Social Security taxes (6.2%) won’t be taken out of your paycheck if your pre-tax biweekly salary is $4,000 or less. So, for example, someone making $10 per hour and working 40 hours per week will get about $25 more per week, or around $100 per month. From September through December, that will add up to about $446. A full-time worker making $15 per hour would get approximately $37 more per week, $149 more
Ryan Dodson has a Masters in Accounting from North Carolina State University. He worked in public accounting with Deloitte and Arthur Andersen. He and his wife Tiffany own and operate Liberty Tax Service. 405 East Dixie Drive•Asheboro, NC 27203 (336) 629-4700 14 | asheboromagazine.com
