Over the past month the media has been scouring the Federal Government as the two major parties attempted to create a new deal to avoid the “Fiscal Cliff”. On New Year’s Day a deal was struck which extended most of the Bush Era Tax Cuts.
As people have been receiving their paychecks during this new year of 2013, many have been disgruntled at the extra taxes taken out.
During the negotiations of the “Fiscal Cliff” the Federal Government did not extend the Temporary Social Security Tax Cut. This saved a 2 percentage point from 6.2 to 4.2 on employee only contributions to Social Security. So a person who makes $50,000 a year will now pay around $1000.00 more in Social Security taxes this year!
This 2 percentage point difference will effect virtually everyone in one way or another as it effects 99% of the people who are paid a worker’s wage.
It could be worse though, unless you are in the 2% high income earners. With the Health Care Plan and this non-extension a person making $500,000 to 1 Million dollars is expecting to pay around $15,000 more and those of you out there that make more than 1 million dollars should expect a $170,000 increase in taxes.