Expired payroll tax cut pinching paychecks
Person earning $50,000 per year will pay $1,000 more in payroll tax
Robert Gee was feeling the pinch a little bit more this week as he filled up his tank. It's not just because the price at the pump is up, but that his paycheck is also down.
"They took out $35 extra out of my check," he said.
Renee Centeno was missing those dollars, too.
"Taxes are higher. Life is expensive," he said.
It's the payroll tax that help fund Social Security that's higher. Two years ago, the government gave most of us a tax break to stimulate the economy.
Now, break is over.
"The first couple of paychecks will feel a little bit hard, but it's basically going back to where you were two years ago," said Kent Copeland, financial adviser with Ameriprise.
In numbers, most of us will now take home two percent less than last year.
So, if you make $41,000 per year and get paid every other week, that bi-weekly paycheck will have $32 less in it.
"If you're sort of close to the edge financially, then even $10 or $20 can make a big difference," Copeland said. "I think for the average person, they're not going to feel it tremendously."
As for Gee, he'll be watching his spending a little more closely.
"I'll have to budget down on my groceries and my gas," he said.
That's because the amount his paychecks will be short each month will be about the price of a tank of gas.
For a list of stories that Marilyn Moritz has done, click here.
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