2013 Payroll Tax Increase Means Your Paycheck Will Shrink
DALLAS (CBSDFW.COM) – Although Congress voted to keep Americans from going completely over the fiscal cliff, with income tax increases targeting only the country’s top earners, there is one tax increase almost every American household will see.
It’s one many taxpayers didn’t even know was on the horizon.
At the first of the year, a tax rate passed during the Obama administration will expire, and it will add up to less money in the paychecks of every American worker.
Social security deductions and payroll taxes are going up, while take home pay will go down.
Greg Carver, an employer tax specialist for Ernst and Young explains that every American worker received a two-percent cut in the payroll tax two years ago thanks to the Obama stimulus plan. That reduction expired this week.
“If an individual earns 50-thousand a year, you’ll see an increase of 100-dollars a month,” he says.
Yearly, an average of 12-hundred dollars extra will be deducted.
So while most workers were spared an income tax increase, they will be hit with another tax that will reduce the amount of money in their paychecks.
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