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:
Brenda Bredahl Um...quickly we forgot that we got a 2 percent increase in pay from the social security in 2010 for federal economic stimulus ... Now that tax holiday is over that's all
Christina Andersen if they tax us then they should tax welfare checks too.
Mike Bergman Tax welfare. Because people on welfare who have kids can get tax credits for having kids with never paying taxes. I believe you can this a evil rich person loop hole
Arwen Hall It's an ignorant suggestion to say "welfare checks" should be taxed! that's asking for more government, not less. Just because a welfare recipient does not pay income taxes does not mean they don't pay any taxes. Recipients of "welfare checks" do pay such levies as sales tax, gasoline tax, phone and utility taxes. Many politically well-connected corporations are also parasitically draining their share of fiscal blood from your paycheck before you ever see it. It’s called corporate welfare. The government spends more on corporate welfare subsidies than social welfare programs.
Casey Rouse I'll pay over $1,000 more into a dysfunctional ss system this year because of the hijacking of our social security by politicians. It should be our own account that the ignorant politicians can't touch. Add the 12% tax increase from mayor Dickert and the worst councilmen in the world, and you have a perfect storm against job growth in Racine.