Changes to your first paycheck to yourself in 2011
Posted by robkraft on January 15, 2011
I created my first paycheck of 2011 for myself today. The first paycheck is always the most difficult in a year because I need to identify the tax changes that affect it.
The first change for 2011 is that I had to reduce the amount of Social Security withheld from the employee portion of my paycheck from 6.2% of my base salary to 4.2%. This does not affect the amounts I withhold for federal withholding, medicare, or Missouri state withholding.
The second change for 2011 is to change the amount of unemployment insurance tax to withhold for the state of Missouri. My Missouri unemployment tax changes every year and I consider it to be a major nuisance for several reasons:
- It is complicated to calculate
- I never correctly guess how the state will round to the penny which results in a check for a one penny refund from the state.
- I can’t just pay it all at once for the year, I have to pay it for the first 3 to 6 months until the $7,000 gross wages limit is reached.
- It will never benefit me because I am self-employed and will never file an unemployment claim against myself.
I keep all the other factors of my paycheck the same for 2011 and as I have for every monthly paycheck for the last 3 years. By keeping my salary, withholding, and 401k deductions the same, my monthly, quarterly, and federal filings take less time to prepare because I can use the same numbers from previous filings. I highly recommend that you pay yourself the exact same amount with the same deductions on a regular basis just to reduce the time you need to spend making calculations and also because fewer calculations means fewer chances for errors.