Now that you’ve stopped cursing Congress and their dawdling over the fiscal cliff, we bring you this bit of sobering news.
Taxes are still going up.
It’s true that the deal finally hammered out by Congress and passed by the House late Tuesday night does keep the tax cuts put in place during the Bush Administration. In fact, it makes those cuts permanent.
That’s the good news. The bad news is that taxes on the whole are still going up. That means that starting this week, you will see less money in the take-home portion of your paycheck.
Why is that? Social Security. The fiscal cliff deal did not keep the temporary reductions in Social Security taxes from expiring. Those rates were lowered by 2 percentage points for most taxpayers in 2012. The increase will cost most workers with an annual income of $50,000 abuot $1,000 a year.
You can get all the details on what is in the fiscal cliff deal here, and an explanation on Social Security taxes here.
OK, you can start cussing Congress again.
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