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Coming Soon: Higher Taxes in Your First 2013 Paycheck

Fiscal cliff deal means spike in Social Security payroll taxes in next paycheck… (but it would have been much higher without the deal).

New Yorkers will see a spike in taxes taken out of their first paychecks of 2013 — a provision of the fiscal cliff deal that allows for a raise in Social Security payroll taxes. But the spike would have been much higher had it not been for the fiscal cliff deal, The New York Post reports.

The higher tax provision – 6.2 percent, up two points from the previous 4.2 percent – is a part of an effort to pay for the larger-than-life national debt and also to stimulate economic growth.

For families that make $50,000 or less, that means an extra tax payment of $579 a year, while families earning between $500,000 and $1 million will see an average rise of nearly $15,000 in their tax bills, according to the Tax Policy Center.

Other increases include:

  • The expiration of Bush-era tax cuts, including the disappearance of the $1,000-per-child credit and higher investment and estate taxes.
  • A 3.8 percent surtax on certain investment income for individuals earning more than $200,000 per year ($250,000 for couples) as part of Obama’s 2010 health-care law.
  • The tax rate on inherited estates will go up from 35 to 40 percent, though the first $5 million are exempt for individuals and $10 million for families.
Vincent January 09, 2013 at 12:06 PM
I thought our president said taxes would not go up for anyone making under $250K per year? I guess I was mistaken as usual. http://www.washingtonpost.com/business/fiscal-cliff/most-will-face-a-rare-tax-increase-with-or-without-fiscal-cliff-resolution/2012/12/31/31d4bf0a-5259-11e2-8b49-64675006147f_story.html
David P. Redmond January 09, 2013 at 01:33 PM
Our thug mafia federal government needs their cut of your modest paycheck, ultimately taken at the barrel of a gun. It's so easy to get by on Long Island on a median US income with what you're allowed to take home of course... while the Federal Reserve continues to devalue the USD fiat currency. The 13th amendment recognizes the freedom from involuntary servitude, but courts have ruled the federal income tax does not violate this, even when the average citizen will be in debt most of their lives just to get by. OK... good night and good luck.

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