Here are the small business payroll tax and other business tax changes in effect for 2012 that you need to know about.
The IRS standard mileage rate has changed for 2012. Here are the rates:
- 55.5 cents per mile for business miles driven
- 23 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations.
These rates are in effect for the entire year for businesses taking the standard mileage deduction.
The tax rate for Social Security remains the same but the maximum deduction has been increased for 2012, to $110,100. The Social Security portion of your self-employment tax stops when your income reaches this amount; the Medicare tax continues for all income.
If you have self-employment income, then you can take a deduction for health insurance expenses incurred for yourself, your spouse, and your dependents. There are restrictions on who can claim this deduction and types of insurance that qualify for the deduction. Also read about how to claim the deduction.