Fiscal Cliff Compromise Means Less Money In Your Paycheck
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.