How the Payroll Tax Could Affect You
By: Rebecca Jeffrey
Updated: January 1, 2013
"We have gone over the fiscal cliff but we are not falling yet," Brandon Simmons, Founder and CEO of Rogers-based Integrity Capital Wealth Management said.
The December 31st deadline has come and gone and fortunately..
"For the average family it's not going to be a huge deal," Simmons said.
The bill the Senate passed will mostly affect couples making more than 450,000 dollars a year and singles making more than 400,000 dollars a year.
"Anybody under that tax level is not going to be effected by a rise in income taxes. However, those over 200,000 or 250,000 as a married couple is going to have some of their deductions limited," Simmons said.
One thing not covered in the Senate bill that will affect everyone is the payroll tax.
"We are all going to see some decrease from income because of additional tax withholding's."
In the midst of the recession, payroll tax dropped about 2 percent to help boost our economy.Now, it's not being renewed, causing what will feel like a pay cut.
"Everybody that has a payroll will see their payroll decrease a little bit."
With other fiscal issues looming including the debt ceiling, Simmons says the fight isn't over.
"Even if they pass this by tonight with a 'yes' vote, it's going to rise itself again in 1 to 2 months and we're going to have to deal with the same issues."
The House is expected to vote on the Senate bill around 10:30 Tuesday night. Should it pass the payroll tax will take effect within your next one or two pay checks.
If it doesn't pass, come Thursday, new Congress members will take their seats so they could be heading back to square one in the compromise.
How much could it cost you? Check out this payroll tax calculator.
The December 31st deadline has come and gone and fortunately..
"For the average family it's not going to be a huge deal," Simmons said.
The bill the Senate passed will mostly affect couples making more than 450,000 dollars a year and singles making more than 400,000 dollars a year.
"Anybody under that tax level is not going to be effected by a rise in income taxes. However, those over 200,000 or 250,000 as a married couple is going to have some of their deductions limited," Simmons said.
One thing not covered in the Senate bill that will affect everyone is the payroll tax.
"We are all going to see some decrease from income because of additional tax withholding's."
In the midst of the recession, payroll tax dropped about 2 percent to help boost our economy.Now, it's not being renewed, causing what will feel like a pay cut.
"Everybody that has a payroll will see their payroll decrease a little bit."
With other fiscal issues looming including the debt ceiling, Simmons says the fight isn't over.
"Even if they pass this by tonight with a 'yes' vote, it's going to rise itself again in 1 to 2 months and we're going to have to deal with the same issues."
The House is expected to vote on the Senate bill around 10:30 Tuesday night. Should it pass the payroll tax will take effect within your next one or two pay checks.
If it doesn't pass, come Thursday, new Congress members will take their seats so they could be heading back to square one in the compromise.
How much could it cost you? Check out this payroll tax calculator.
