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2 percent payroll tax holiday ending soon and likely for good

October 1, 2012

When Congress checked out last month, the House left a handful of Washington, D.C.-area lawmakers with the task of showing up and running a pro forma session.

But the extended absence of most of the 535 Senators and Representatives means that we won't see any tax action until mid-November at the earliest.


2 percent payroll tax cutAs I noted on Sept. 24, one tax break is likely to disappear entirely on Jan. 1, 2013: the 2 percentage point payroll tax cut. or, as it's often referred to, the payroll tax holiday.

I'm mentioning that post — Payroll tax cut on its last legs — again because the new conventional wisdom that the employees' payroll tax holiday is ending gets front page coverage in today's New York Times.

My thought on the payroll tax break: Exchange the flat tax rate cut with a progressive payroll tax.

Check out my payroll tax modification idea in that earlier post and let me and readers know what you think in comments here or at the original item.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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