Fiscal Cliff Compromise Means Less Money In Your Paycheck

Members of the House of Representatives leave after voting for legislation to avoid the 'fiscal cliff' during a rare New Year's Day session January 1, 2013 in Washington, DC. Voting 257-167, the House passed a bill that the Senate passed the night before, clearing the way for President Barack Obama to sign the legislation to avoid the 'fiscal cliff.' (Credit: Chip Somodevilla/Getty Images)

Members of the House of Representatives leave after voting for legislation to avoid the ‘fiscal cliff’ during a rare New Year’s Day session January 1, 2013 in Washington, DC. Voting 257-167, the House passed a bill that the Senate passed the night before, clearing the way for President Barack Obama to sign the legislation to avoid the ‘fiscal cliff.’ (Credit: Chip Somodevilla/Getty Images)

By Lynne Adkins

PHILADELPHIA (CBS) – Looking at your first paycheck of the year you’ll notice a change.

Most Americans avoided major changes after the fiscal cliff compromise was reached, but you’ll still see less take-home pay in 2013. That’s because a temporary measure to reduce social security tax withholding by two has been allowed to expire.

James Newhard, a Certified Public Accountant in Paoli, says it was put into place to help spur spending when the economy went south.

“It was like reducing the amount you were putting into your own 401(k). You’re getting your money but it’s gonna be that much less that’s going to be there for you at the back end,” he said.

So you’ll again pay the full 6.2-percent tax and those making over $400,000 a year will pay more in taxes and see the highest bracket go to nearly 40-percent.

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