Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
Employers: Withhold less tax after June 30
For the week of
June 18, 2001
On June 7, 2001, President Bush signed the largest tax cut legislation in two decades.
One major provision of The Economic Growth and Tax Relief Reconciliation
Act of 2001 cuts income tax rates over a period of six years.
Prior to the new law, tax rates were 15%, 28%, 31%, 36%, and 39.6%. The 2001 Act created a new 10% tax bracket
retroactive to January 1, 2001. In addition, on July 1, 2001, all tax rates above the 15% rate drop 1% to 27%,
30%, 35%, and 38.6% respectively.
As a result, employers will need to adjust the amount they withhold from employees' paychecks after June 30, 2001.
The IRS just released new wage withholding tables (Publication 15-T) to reflect the rate reductions effective July
1, 2001. If you use computer software to prepare your payroll checks, contact your software company for updated
withholding tables.
In addition, IRS Publication 15-T contains a notice that you should make available to your employees. The notice
advises employees to provide you with a new Form W-4 if they don't want to have their withholding reduced.
If you have questions about this or other details of the new law, give our
office a call.
Click here to view previous
tax tips.
"Tax Tips" are published weekly to
provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders,
and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list
to receive other tax-cutting information from time to time, please contact our office. We're here to help.
