January 4, 1993
The following tax rates and amounts are effective for 1993:
-
OASDI rate remains at 6.2% but wage base rises to $57,600 from $55,500
-
Medicare rate remains at 1.45% but wage base rises to $135,000 from $130,200
-
Maximum monthly social security benefits for workers retiring at age 65 rises by a 3% cost of living increase to $1,121 from $1,088. The maximum retirement earnings one can earn before benefits will start to be withheld is $10,560 up from $10,200 for those ages 65 through 69 and $7,680 up from $7,440 for those under age 65.
-
Personal exemptions rise to $2,350 from $2,300 and exemptions will begin to phase out at $162,700 of AGI for couples instead of $157,900 for `92. For singles, $108,4500 up from $105,250.
-
Standard deductions will increase to $6,200 for marrieds in `93, up from $6,000. For children age 14 who must file returns at least $600. Can be as high as $3,700 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, same as `92.
-
Income tax brackets for `93 income shift upward a bit, nothing major.
-
Federal unemployment Tax Rate (FUTA) remains at 6.2%.
-
IRS interest rate on refunds is 6% and on taxes owed is 7%
-
Alternative Minimum Tax rate remains at 24%
-
Back up withholding rate rises to 31% from 20%
New Jersey Reduces Interest Rate on Delinquent Taxes
The rate of interest charged on delinquent New Jersey taxes is now 11%, (formerly 11.5%) of the underpayment of tax during the first quarter of 1993.
New York State-Workmen`s Compensation
Effective January 1, 1993 the Disability Benefits Law is being amended with regard to the insurable status of the employee-spouse of the employer who is a sole-proprietor or partner. The employee-spouse will now be considered to be included in the employers disability benefits insurance policy unless a written election not to cover the spouse is on file with the insurance company (including The State Insurance Fund). New York State is sending out a form to each employer for this purpose. You can do either of two things-
-
If electing to cover the spouse-include the spouse on the payroll reports starting in January, 1993.
-
If electing to exclude the spouse, check the box on the form, write the name of the spouse and the name of the employee and have the employer sign it.
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. We also urge you to consider the use of umbrella insurance coverage to reduce your automobile and homeowner`s cost of insurance.
Quote of the Month
"The reason we think lawyers overcharge is that we have trouble seeing most of the things a lawyer does as "real" work. In this way lawyers are much like homemakers." (from the Chicago Tribune)
As always, if you have any questions about these or any other matters, do not hesitate to call me.