Make the most of 2011 and gear up for 2012

Posted by on Nov 18, 2011 in Payroll Notes | Comments Off on Make the most of 2011 and gear up for 2012

As the year ends and a new year rapidly approaches, it’s important to remain informed about the changes that affect your business and your employees.

It’s a good idea to get an updated list of your employees’ addresses if you mail out W-2 forms.  If you cannot locate a terminated employee’s current address, you must retain their W-2 on file for three years.

Employees can contribute up to $16,500.00 to 401(k) and 403(b) retirement plans for 2011.  Employees over the age of fifty can also contribute to a catch up contribution, which is $5,500.00.  Be sure to make your employees aware of these limits so that they can make the most of this benefit.

The year 2012 brings many changes.  Just a few are the increased limits for 401(k) and 403(b) retirement plans will increase to $17,000.00 and changes to limits with Medical Savings Accounts.

Due to inflation, the IRS has announced that starting in 2012, the amount of each personal exemption will increase to $3,800. We would encourage you to have your employees review these updates and complete a new W-4 if needed.

Please check out the  IRS website for more information regarding these important changes.