Bonnie Thompson
Beginning January 1, 2021, the following changes go into effect for the withholding of payroll taxes and reimbursement of auto mileage.
SOCIAL SECURITY
The wage base for withholding social security tax has increased to $142,800. The social security tax rate will be 6.2% for both employers and employees for a maximum expense of $8,853.60 For Medicare, the rate is still 1.45% each for employers and employees with no limit this year. Continuing in 2021, employees earning in excess of $200,000 will be subject to a mandatory additional 0.9% medicare tax withholding regardless of their individual tax filing status. This withholding does not require the employer match.
STATE DISABILITY INSURANCE (SDI)
The taxable wage limit has increased to $128,298. The tax rate will increase to 1.2%. Maximum to withhold is $1,539.58
FEDERAL AND STATE UNEMPLOYMENT INSURANCE
Both the Federal and State of California taxable wage bases remain the same for 2021 at $7,000. You will receive notification of your state tax rate. The FUTA tax rate is .06 all year.
STANDARD AUTO MILEAGE RATE
The standard auto mileage rate for reimbursement of deductible costs of operating an auto for business will be 56 cents per mile.
If you have any questions or concerns regarding the above, please contact your WFY advisor or contact us here.
Wright Ford Young & Co. is headquartered in Irvine, CA and is the largest single office CPA firm in Orange County. WFY is a full service corporate accounting firm offering audit, tax, estate and trust, and business consulting services to closely held company and family business owners. More information about our Firm can be found at www.cpa-wfy.com