Experts weigh in on Executive Order that would allow you to defer paying some taxes
The memorandum would require you to pay the money back in 2021
TOLEDO, Ohio (WTVG) - President Donald Trump issued an Executive Order in august that would put more money in your pocket. But it’s money that will have to be paid back.
So what are the experts saying about it? The memorandum would allow people who gross less than $104,000 a year to defer certain social security tax withholding from their paycheck. However, the key word is defer.
“The employee can elect to not have the 6.2% taken out of thier paycheck form now until the end of the year. While it puts money in your pocket now, it is going to hit you twice as hard next year.That money has to be re-paid starting the first of January and must be paid off by April 30th,” John Monaghan, CPA and partner with the VZN Group, said.
Experts point out this is much different that the stimulus checks sent out this year to millions of Americans. It’s not mandatory for employers to offer the option, and many companies have already said they won’t. Both experts we spoke with say they’re recommending against it for employers and employees.
Charlie Heid is a tax partner with GJM Public Accounting Firm.
“There are too many land mines there are no answers to. One of the biggest issues facing employers is if an employee leaves how do you get that money back? You don’t have payroll to collect it from. A business would have to pay it and then try to track down the former employee to get that money back,” Said Heid.
So however tempting it may seem, the experts we spoke with say the bottom line is that it’s better to just keep having the Social Security tax withheld from your paycheck. Both experts also say that as of right now they do not have any business clients that have opted to offer the program to employees.
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