The extra money taken from paychecks is not a "cut" or tax increase, but rather an end to a tax "holiday" Americans experienced in 2011-2012.JACKSON, MS (Mississippi News Now) -
It's payday, and more than 160 million people will receive a check a little lighter than what they're used to after the payroll tax "holiday" came to an end at the beginning of this year.
Two percent can make a bigger difference than people realize. The tax rate was decreased from 6.2% to 4.2% percent for the past two years. The extra money taken from paychecks is not a "cut" or tax increase, but rather an end to a tax "holiday" Americans experienced in 2011-2012.
A basic breakdown of what the average worker will see depends on the yearly income. For example, someone who brings in $35K yearly will see a deduction of $26.92 per paycheck.
How much more you'll pay in 2013
| Annual Income |
Biweekly Check |
| $35,000 |
$26.92 |
| $50,000 |
$38.46 |
| $100,000 |
$76.92 |
| $113,700 & up |
$87.46 |
Financial experts say there are ways to balance the decrease in your paycheck. Start with the IRS and consider adjusting your holding allowances. Use the IRS withholding calculator to see how a little more cash each check, rather than the lump sum in a tax refund once a year, can help your family.
Also, double check your monthly fees. Where can you save? For those programs that pull cash directly from your bank account, like Netflix, a gym membership, or magazine subscriptions, make sure you're utilizing the services; if not, discontinue that monthly fee.
Look at your credit cards and see which APR rates are higher than others. Call your credit card company to renegotiate your APR rate. If the company isn't willing to lower the percentage rate, limit your use of that particular card.
In a nut shell, you're paycheck is smaller. No matter how you look at the $40 or $50 - a tank of gas, dinner out with your family, or a few extra dollars for savings - it's now necessary to regroup, consider your monthly expenses and see where the money will come from. What are the things you're giving up to balance the difference in your pay? Head to the WLBT or Fox40 Facebook page and tell us how you're dealing with the change.
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