ADP Assists Businesses in Addressing Impact of 2013 Tax Law Changes

Wed Mar 13, 2013 1:11pm EDT

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ROSELAND, N.J.,  March 13, 2013  /PRNewswire/ -- ADP, a leader in human resource
and payroll outsourcing solutions, highlighted today several important steps
small-business owners can take to help navigate changes stemming from the
recently enacted American Taxpayer Relief Act (ATRA).  By carefully selecting an
employer-sponsored tax-qualified retirement plan, business owners can get
much-needed relief from tax increases they experience as a result of ATRA, with
the added benefit of helping their employees prepare for retirement.  

Passed late last year, ATRA created several important changes to the tax law for
both income and payroll taxes in 2013. The Act effectively maintains the reduced
income tax rates adopted in 2001 and 2003 for individuals earning up to 
$400,000  and joint filers earning less than  $450,000. Income above those
levels will be taxed at 39.6 percent, up from 35 percent. The expanded 15
percent bracket for joint filers, commonly referred to as marriage penalty
relief, also was extended. These tax rates were extended permanently for wages
paid after  Dec. 31, 2012.

Meanwhile, employee Social Security tax rates jumped to 6.2 percent for 2013
wages, up to the taxable wage limit of  $113,700.  In 2011 and 2012, the Social
Security tax rate was 4.2 percent.  For more information about ATRA and the
resulting tax law changes, click  here  to view a video featuring ADP Retirement
Services'  Chris Augelli.

"Taxes are rising for all Americans, regardless of age or income bracket," said 
Chris Augelli, vice president of product marketing and business development for
ADP Retirement Services. "The good news is that employer-sponsored tax qualified
retirement plans can provide some relief in this new financial environment."

In 2013, workers can invest more of their pre-tax earnings in an
employer-sponsored retirement plan. The maximum an individual employee can
contribute to a 401(k) plan is  $17,500, up  $500  from last year. Individuals
ages 50 and older can now contribute an additional  $5,500  in "catch-up
contributions" in their 401(k) accounts. This is  $500  more than was allowed
last year.  

Similarly, individuals participating in a SIMPLE IRA plan can contribute an
additional  $500  to their IRAs in 2013, up to a maximum of  $12,000  per year.
Those who are 50 and older can make an additional  $2,500  in catch-up
contributions, also a  $500  increase over last year's limit.

"One of the advantages of these plans is they allow people to save for the
future with pre-tax dollars," said Augelli. "This lowers their current federal
taxable income, which may enable them to pay less in federal income taxes and
take more income home."

ADP's retirement plans are easy-to-manage and provide the resources, materials
and online tools employees need to become retirement ready. ADP works with
companies to provide retirement savings plans that are tailored to employers'
specific needs and align with their strategic business goals.  

"ADP does not sponsor or manage its own investment funds, so we can be objective
about investment options in our plans," said Augelli. "In this regard, our
clients never have to worry about a conflict of interest with regard to fund
make-up, and we fully disclose our compensation we earn from the investment
funds we make available. They know the information we provide to them is based
solely on what is best for their business and their employees. And we're always
here to help clients understand the latest laws, regulations and best practices
for ensuring a secure retirement, regardless of the economic or political

For more information on how ADP can help you access a new road to retirement,
call us today at 800-432-401k or visit us on the Web at

ADP maintains a dedicated team of professionals who carefully monitor all
federal and state legislative and regulatory measures affecting human resource,
payroll, tax and benefits administration, and ensure that ADP systems are
updated as relevant laws evolve. For the latest on late-breaking federal tax law
changes, visit the ADP "Eye on  Washington" web page located at

Please note: ADP "Eye on  Washington" notices are provided as a courtesy to ADP
clients to assist in understanding the impact of certain regulatory
requirements. They should not be construed as tax or legal advice, and
interested parties are encouraged to consult with appropriate legal and/or tax

About ADP  

ADP (NASDAQ: ADP), with more than  $10 billion  in revenues and approximately
600,000 clients, is one of the world's largest providers of business outsourcing
and  human capital management  solutions. Leveraging over 60 years of experience
and a global footprint spanning more than 40 countries, ADP offers a wide range
of human resource,  payroll, talent management,  tax and benefits administration
solutions from a single source, and helps clients comply with regulatory and
legislative changes, such as the  Patient Protection and Affordable care Act
(ACA).  ADP's easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading provider of integrated
computing solutions to auto, truck, motorcycle, marine, recreational vehicle,
and heavy equipment dealers throughout the world. For more information about ADP
or to contact a local ADP sales office, reach us at 1.800.225.5237 or visit the
company's Web site at

Jim Duffy   
(973) 712.2070


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