January 2, 1992 The following tax rates and amounts are effective for 1992: OASDI rate remains at 6.2% but wage base rises to $55,500 from $53,400 Medicare rate remains at 1.45% but wage base rises to $130,200 from $125,000 Maximum monthly social security benefits for workers retiring at age 65 rises to $1,088 from $1,022. The maximum retirement earnings one can earn before benefits will start to be withheld is $10,200 up from $9,720 for those ages 65 through 69 and $7,440 up from $7,080 for those under age 65. Personal exemptions rise to $2,300 from $2,150 and exemptions will begin to phase out at $157,850 of AGI for couples instead of $150,000 for `91. For singles, $105,250 up from $100,000. Standard deductions will increase to $6,000 for marrieds in `92. For children age 14 who must file returns at least $600. Can be as high as $3,600 if they have earned income. Also higher: the amount of investment income they can have before such income is taxed as if their parents received it, will be $1,200, $100 more than `91. Income tax brackets for `92 income shift upward a bit, nothing major. Federal unemployment Tax Rate (FUTA) remains at 6.2%. Form W-2 The 1991 Form W-2 has been revised extensively. If preparing the form yourself. Deadline for filing Forms 1099 is not extended by Leap Year. Forms 1099 are due February 28, not February 29, the last day of February (this is a leap year)! New York State-Individual The maximum tax rate is scheduled to drop to 7.5% on April 1, 1992 for a 1992 effective annual maximum tax rate of 7.59375% which is a drop from 7.875%. New York State-New Withholding Requirements Effective January 1, 1992 all employers are required to remit withholding taxes to the New York State Department of Taxation and Finance within five (5) business days of meeting or exceeding $700 in New York State, New York City and/or Yonkers tax required to be withheld from one or more payrolls. If you withheld more than $15,000 for the year 1990 you must file within three (3) business days. Additionally, a new quarterly filing will be necessary similar to the Federal Form 941 which is going to result in increased time on our part. Connecticut Since the most recent attempt at tax repeal failed, the Connecticut personal income tax remains at 4.5% of adjusted gross income for 1992. The sales tax remains at 6%, down from 8%. The most interesting part of the new tax package is the proposed sales tax on Tax Preparation Services. We will be taking the position that the meeting with a Connecticut resident in our offices and work done in our offices does not subject the work to the Connecticut Sales Tax. Insurance Coverage We urge you to take the time to have an annual review of your medical insurance coverage in view of recent increases with a view also to raising your deductible or switching companies. As always, if you have any questions about these or any other matters, do not hesitate to call me.