Paycheck A Little Smaller? Here's Why...
You may have been spared from paying more in income taxes, but there still could have been a hit to your paycheck after the Fiscal Cliff Tax Deal was reached earlier this month. Here's all you need to know...
If you take a close look at your first 2013 paystub you will probably notice that Uncle Sam took a bigger chunk of your pay for Social Security.
Taxpayers got a temporary holiday from paying the full 6.2 percent beginning in 2011, but that is over thanks to the fiscal cliff tax deal reached earlier this month.
That legislation stopped the income tax hikes for most Americans, but the Social Security payroll tax holiday was allowed to expire. AOL explains it like this:
Social security is financed by a 12.4 percent tax on wages, with employers paying half and workers paying the other half. During the temporary holiday, the employee contribution was reduced to 4.2 percent in 2011 and 2012, saving a typical family about $1,000 a year.
To see this in a different way, check out this bar graph showing how much more in taxes people will have to pay by income.
Closer to home, we asked on Facebook how much lighter your paycheck was and how you felt about it. Here’s what people had to say:
Jill Blawat I seemed to have suffered more then 2%. it was horrible when I saw my check stub today.
Steve Bruskiewicz Had a pay increase and the entire increase was eaten up by the Federal, State and Health Insurance withholdings. Could have been worse but still falling behind.....
Nate Napattak Obama has no intention of cutting his spending. He's not done taxing either. Wait another two months for the next fiscal cliff.
Randy Shapaker this country is going down the tubes!
Sue Ihm Bahneman They can not work together.