Your Payroll Tax Will Probably Rise
Lawmakers in Washington narrowly avoid a tumble over the fiscal cliff. That means income taxes won’t go up for many Americans.
Part of the deal, however, means that a Social Security payroll tax holiday was allowed to expire. Tulsa financial adviser Jake Dollarhide, CEO of Longbow Asset Management, says that means your January 15th paycheck will look a little different.
“Say someone’s making $41,000 a year, national average salary,” he said, if you didn’t get a raise at the end of the year, “you’ll see $32 less on your bi-weekly paycheck than you did in your last paycheck in December.”
He says other effects, like changes in income tax credits and exemptions, will have more of an impact this time next year.
At the moment, he thinks many people don’t realize that this hit to their incomes is coming.