Wednesday, February 22, 2012

Good News/Bad News on the Payroll Tax Holiday

Not that anything surprises me lately........

Via Cousin Bill

Well, Congress extended the payroll tax holiday—that’s the good news!

The bad news is that you’re gonna get whacked in 2013.

“Without significant tax code changes,” say the folks at PolicyMic, “in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.”

Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.

That hike will cost the majority of filers an additional $435.

For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.

Roll those changes up and a family filing as married with two children making $50,000, will see their taxes increase by basically $2,700.

So it turns out you’re in big trouble. And here Congress thought they were doing you a favor. (Info on the payroll tax holiday and its recent history here.)

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