Fiscal Cliff Averted

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  • 1 Post By RedCatWaves

Is there a thread on this already? Can someone break this down for me? i keep hearing they will be taking more money out of my checks. I'm too poor for that to happen! Say it ain't so!!
My university already made changes to our pay so my check for January is already $90 less. Supposedly some of that will be returned to us because the cliff apparently isn't as steep... $90 is a lot for us.
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$90 is alot! i dont know how much my pay will be cut, we dont get paid again until next friday. i havent heard anything about it from the boss or anything. i guess next week i will see. i cant afford a pay cut, which is what this will be, money i wont be bringing home.
I thought only those making over $450K were going to see their taxes go up.
Payroll taxes are going up by 2%


Details:
ccording to the deal:
-- The tax rate for individuals making more than $400,000 and couples making more than $450,000 will rise from the current 35% to the Clinton-era rate of 39.6%.
-- Itemized deductions would be capped for individuals making $250,000 and for married couples making $300,000.
-- Taxes on inherited estates will go up to 40% from 35%.
-- Unemployment insurance would be extended for a year for 2 million people.
-- The alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation.
-- Child care, tuition and research and development tax credits would be renewed.
-- The "Doc Fix" -- reimbursements



Payroll taxes still set to go up
Despite the last-minute fiscal cliff agreements, Americans are still likely to see their paychecks shrink somewhat due to a separate battle over payroll taxes.
The government temporarily lowered the payroll tax rate in 2011 from 6.2% to 4.2% to put more money in the pockets of Americans. That adjustment, which has cost about $120 billion each year, expired Monday.
Now, Americans earning $30,000 a year will take home $50 less per month. Those earning $113,700 will lose $189.50 a month





The payroll tax (social security tax) is going back to it's former level. It was lowered 2 years ago as a "stimulus". Unfortunately, there is a cap (at $110K) on payroll tax, so rich folks and super-rich folks, don't pay more than middle class folks earning under $110K, so that's why the tax going back to former levels is disproportionately going to hurt lower income people.
journotraveler likes this.
I make less then $30,000/year. will i be spared?

so the super rich will still be paying lesser tax this the regular folks? this is what confuses me. is anyone coming out of this a winner?
I make less then $30,000/year. will i be spared?

so the super rich will still be paying lesser tax this the regular folks? this is what confuses me. is anyone coming out of this a winner?
Originally Posted by thelio

No, you won't be spared. You must pay your full payroll tax on your entire salary. I don't know how much it will be, but you will feel it. I wish Obama had championed retaining the stimulus payroll tax reduction for another year, until our economy could get a little stronger, but he didn't.
there goes the raise I got this year...

oh well.
How the hell will we survive? I was holding on to my low paying job, because i have the best benefits in the world, my supervisor is helping with an exam so i could leave for a better paying job, i'm also helping her with a research project which can help me get a better job and go back to school, and my job with pay for me to go back next year. i'm only bringing home a little over 800$ every two weeks now, what am i to do with anything less than that? i wont even be able to afford to take the exam and get a better job. i'm a little angry right now.
(((thelio)))
Originally Posted by coilynapp
This. Hang in there, Thelio. I hope you find a way to better pay soon.

I get paid tomorrow and I just took at look at the virtual paystub. I'll be seeing about $50 less in my deposit tomorrow.

Redcatwaves is right about the payroll tax not affecting higher-earners as much. I also remember when the payroll tax capped out at around 85k. All my high-rolling corporate lawyer friends got to enjoy bigger paychecks because they capped out quickly.
3B corkscrews with scatterings of 3A & 3C.
The payroll tax (social security tax) is going back to it's former level. It was lowered 2 years ago as a "stimulus". Unfortunately, there is a cap (at $110K) on payroll tax, so rich folks and super-rich folks, don't pay more than middle class folks earning under $110K, so that's why the tax going back to former levels is disproportionately going to hurt lower income people.
Originally Posted by RedCatWaves
This is one thing most people forgot. . . that it was lowered 2 years ago and people found more in their paychecks. I was never quite sure that their hopes for an economic stimulus was reason enough to lower the social security tax when SS is in danger. Taking money away from a program in jeopardy seemed like a dumb idea to me. I also personally think the cap for paying in needs raised to about $250,000.

The bad thing about lowering something temporarily like that is everyone gets used to having the extra money. Now they all have to adapt to not having it again. Easy to give it to someone but much much harder to take it away.
3b/c
Hmm...I wonder how or if that will affect us. Hubs and I work for a charter school company and we pay into something called TRS instead of SS. It's a Texas retirement fund for educators. I wonder if the rates on that will go up or not.
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