expiration of the payroll tax holiday

[Deleted]

Huh. Well, not great timing for us but we'll figure something out. If I recall correctly the tax holiday gave me around $40 more per month so at least that's not a huge chunk of our budget. DH is due a raise soon so hopefully his check won't be affected much at all.

[aspentosh]

We'll lose quite a bit each month. It'll hurt.

[shaynaatl]

We will feel it- our monthly savings will decrease. Not sure if will cut back on spending though to offset that.

[stingsharkruns]

I just did payroll. My check is $21 less - (so $42/mth).. DH gets paid tomorrow. We shall see...

[njohnson1972]

The max salary for 2012 was $110,100 at 4.2%, which was $4,624.20.
The max salary for 2013 is $113,700 at 6.2%, which will be $7,049.40.

So anyone making the max income levels will have an increase of $2,425.20.

If you and your spouse make over $113,700 each, you are looking at in increase in tax of $4,850.40 for Social Security.

[thatgirl2478]

DH gets a step increase of 3% this year ... but with the increase in Health, Dental, Life, etc AND the 2% back to the gov it'll be a decrease of around $10...

[whitepicketfence]

We'll definitely feel it. I'm just hoping that DH's merit increase will be at least 5% this year to somewhat offset this. Unfortunately, any increase he gets won't go into effect until March/April so we'll still have a few lean months.

[savannah11]

Jan 2, 2013 10:50:20 GMT -5 njohnson1972 said:

The max salary for 2012 was $110,100 at 4.2%, which was $4,624.20.
The max salary for 2013 is $113,700 at 6.2%, which will be $7,049.40.

So anyone making the max income levels will have an increase of $2,425.20.

If you and your spouse make over $113,700 each, you are looking at in increase in tax of $4,850.40 for Social Security.

Well that's going to hurt.

[bowlica]

Jan 1, 2013 13:04:38 GMT -5 @forcuatro said:

Jan 1, 2013 12:36:40 GMT -5 farmvillelover said:

I haven't even calculated our impact anyone have a calc link? I'm sick n lazy on iPad to search

I used paycheckcity.com and they have it updated already.


DH started a new job yesterday so we won't have anything really to compare it to other than the net salary estimations that I did during salary negotiations. We will lose almost $200/month which would have been a nice addition to our savings and planning goals.

When I went to paycheckcity.com the calculation for SS was 5.5% of my gross income so I'm not too sure that it is updated to reflect the 6.2% unless I'm doing something wrong

[njohnson1972]

Jan 2, 2013 11:05:14 GMT -5 bowlica said:

Jan 1, 2013 13:04:38 GMT -5 @forcuatro said:

I used paycheckcity.com and they have it updated already.


DH started a new job yesterday so we won't have anything really to compare it to other than the net salary estimations that I did during salary negotiations. We will lose almost $200/month which would have been a nice addition to our savings and planning goals.

When I went to paycheckcity.com the calculation for SS was 5.5% of my gross income so I'm not too sure that it is updated to reflect the 6.2% unless I'm doing something wrong

Was that SS and Medicare tax combined? Medicare tax is 1.45%.

[bowlica]

no it's not combined Med is coming in at 1.29% of my gross income

[thatgirl2478]

Medicare Tax has always been 1.45%

It was SS that was temporarily reduced from 6.2% to 4.2%

The total FICA (Medicare & SS) tax has historically been 7.65%. For the past 2 years it was 5.65%.

Remember that only Health/Dental insurance premiums are excluded from FICA. 401k is not excluded from FICA even though it is for Fed Tax.

[simpsongal]

Is the payroll tax on income up to $113K per job, or is it factored on total household income? The former right? Per job ?

So if a husband and wife each make $100K, they're each paying payroll tax on their full salaries - whereas a working husband w/ SAH wife who makes $200K would only pay up to $113K. Is that right?

[karinothing]

Jan 1, 2013 13:21:44 GMT -5 rubytue said:

Jan 1, 2013 11:39:25 GMT -5 ssmjlm said:

It will affect us. My only hope is that DH's raise mid year helps. As a fed we only received a .5% increase to help offset the increase in health premiums since they won't freeze those. I'm not even sure when the half a percent goes into affect.

Nope. They took it away.

The pay freeze on members of Congress, which Obama had lifted this week, will be re-imposed.
www.washingtonpost.com/blogs/wonkblog/wp/2013/01/01/wonkbook-everything-you-need-to-know-about-the-fiscal-cliff-deal/

Wait, isn't this just saying that Congress pay free is re-imposed not all federal workers? Or am I missing something?

[njohnson1972]

Jan 2, 2013 11:21:47 GMT -5 bowlica said:

no it's not combined Med is coming in at 1.29% of my gross income

Ok, my guess is that it is 4.2% plus the 1.29% = 5.49%. So last year's SS rate?

Medicare taxes are net of medical expenses and FSA/HSA/day care accounts. So that explains why it is less than 1.45% of your Gross Income.

[biscoffcookies]

Jan 1, 2013 13:42:13 GMT -5 ssmjlm said:

Jan 1, 2013 13:21:44 GMT -5 rubytue said:

Nope. They took it away.

The pay freeze on members of Congress, which Obama had lifted this week, will be re-imposed.
www.washingtonpost.com/blogs/wonkblog/wp/2013/01/01/wonkbook-everything-you-need-to-know-about-the-fiscal-cliff-deal/

I should have figured as much. So really, let's hope DH's raises stay at a minimum of 5%.

Did they take away the .5% COL raise for ALL federal workers, or just Congress? What I read earlier today led me to believe it was the latter.

[LoveTrains]

Jan 2, 2013 11:33:32 GMT -5 simpsongal said:

Is the payroll tax on income up to $113K per job, or is it factored on total household income? The former right? Per job ?

So if a husband and wife each make $100K, they're each paying payroll tax on their full salaries - whereas a working husband w/ SAH wife who makes $200K would only pay up to $113K. Is that right?

Yes, it is PER worker/earner in the household. So yes, two employees making $100K each and married would pay more than a household with a SAH parent and one partner making $200K/year.

[thatgirl2478]

Jan 2, 2013 11:44:38 GMT -5 biscoffcookies said:

Jan 1, 2013 13:42:13 GMT -5 ssmjlm said:

I should have figured as much. So really, let's hope DH's raises stay at a minimum of 5%.

Did they take away the .5% COL raise for ALL federal workers, or just Congress? What I read earlier today led me to believe it was the latter.

From what I understand it's ALL federal workers.

[karinothing]

Jan 2, 2013 11:49:34 GMT -5 thatgirl2478 said:

Jan 2, 2013 11:44:38 GMT -5 biscoffcookies said:

Did they take away the .5% COL raise for ALL federal workers, or just Congress? What I read earlier today led me to believe it was the latter.

From what I understand it's ALL federal workers.

www.federalnewsradio.com/722/3178188/Sequester-delayed-for-two-months-pay-freeze-extension-still-possible-

It looks like the Senate hasn't passed the federal worker pay freeze yet. Sheesh, let us have our half a percentage jerks.

[barefootcontessa]

Our cash flow is going to be tight for a while because we are carrying two mortgages. This will hurt.

I resent paying FICA because the likelihood I will ever see any of this money is not great. When SS was founded, there were 20 workers for every retiree. Now there are three workers per retiree, while the fasting growing demographic, relatively speaking, are individuals 100+.

[thatgirl2478]

Jan 2, 2013 12:05:12 GMT -5 @crackhabit said:

This is a bummer.
I wish it were extended.
It's not going to affect us in a way that we'll notice a difference in our quality of life or have trouble getting bills paid, but it kinda blows to get a smaller paycheck. Even though that's what it was "supposed" to be.

I agree completely. It's only going to be approximately a $10 reduction / pay check, but it still SUCKS since DH is getting a step increase this year (his last for 2 more years - boo).

[bowlica]

Jan 2, 2013 11:26:21 GMT -5 thatgirl2478 said:

Medicare Tax has always been 1.45%

It was SS that was temporarily reduced from 6.2% to 4.2%

The total FICA (Medicare & SS) tax has historically been 7.65%. For the past 2 years it was 5.65%.

Remember that only Health/Dental insurance premiums are excluded from FICA. 401k is not excluded from FICA even though it is for Fed Tax.

That was my problem. I was excluding 401k froom FICA and not excluding health ins prem/HSA when doing the calculation. Thanks!

[kateross]

It will hurt. For DH and I, it's about $2,600+ combined.

We were originally going to up our savings by 2%+.

This means we'll have to cut corners some other way, aka social life.

[daydreamer]

Yes. We'll notice it by way of decreased fun money. I prepared myself for the decrease in take home pay by telling myself that I'd increase my retirement savings by 2% if it was extended.

I wonder how many Americans will be surprised by their first paychecks of the year? The fiscal cliff news has all but ignored the end of the F.I.C.A. reduction.

[Deleted]

I agree most people aren't talking about this. I forgot about it until 2 days ago and I think I am pretty well informed.

The 2- paycheck marriage penalty here infuriates me.

[Deleted]

Jan 2, 2013 13:35:27 GMT -5 daydreamer said:

Yes. We'll notice it by way of decreased fun money. I prepared myself for the decrease in take home pay by telling myself that I'd increase my retirement savings by 2% if it was extended.

I wonder how many Americans will be surprised by their first paychecks of the year? The fiscal cliff news has all but ignored the end of the F.I.C.A. reduction.

Yeah, I wonder too. If not for this board, I would have missed it on page 4 of the article I read this morning. I'm curious if our payroll department will make some kind of announcement. Otherwise I'm guessing they'll be getting a lot of calls next week!

It would have been nice to have more notice, for sure. Finding this out for sure today and having lower pay on Friday kind of blows

Time to rework the budget (again) I guess!

[LoveTrains]

Jan 2, 2013 13:39:11 GMT -5 @buckybells said:

It would have been nice to have more notice, for sure. Finding this out for sure today and having lower pay on Friday kind of blows

They put through an extension at the end of december in 2011 for calendar year 2012 only. So everyone has known for a year that this was ending on 12/31/12.

How is that not enough notice?

[kadams767]

Jan 2, 2013 13:38:14 GMT -5 @iheartcosmos said:

I agree most people aren't talking about this. I forgot about it until 2 days ago and I think I am pretty well informed.

The 2- paycheck marriage penalty here infuriates me.

I don't understand how this is a marriage penalty? It is an individual payroll tax - everyone pays the same percentage regardless of marital status.

[cookies]

I guess I'll just have to lower my charitable contributions.

J/K.

Our budget is pretty tight right now so this does hurt a bit. I'm due for a raise in March... after that it might sting less.

[Deleted]

Jan 2, 2013 13:58:38 GMT -5 LoveTrains said:

Jan 2, 2013 13:39:11 GMT -5 @buckybells said:

It would have been nice to have more notice, for sure. Finding this out for sure today and having lower pay on Friday kind of blows

They put through an extension at the end of december in 2011 for calendar year 2012 only. So everyone has known for a year that this was ending on 12/31/12.

How is that not enough notice?

Did everyone know that? I didn't. And I think I'm more informed about this kind of thing than your average Joe. I also thought there was talk of extending it? If not why are we even talking about it now like it's news?