SHERMAN, TX - The first paychecks of the new year arrived for many Texomans Friday, and a few of you may be wondering why your paycheck is a little lighter than usual.
When Congress reached its decision on the fiscal cliff, new legislation went into effect immediately. Part of that legislation did not extend the so-called Payroll tax holiday enacted during the recession.
Because the payroll tax holiday was not extended, and was never intended to be permanent, 2% more of your paycheck is now going toward Social Security. For a total of 6.2%.
It is part of the Federal Insurance Contributions Act tax, or FICA. FICA goes towards two different funds; part is for social security, the other portion goes to medicare.
This new legislation returns the Social Security tax to what it used to be in 2008.
We talked to a CPA Friday about what it means to the average tax payer, who makes about $30,000 a year, and gets paid weekly.
"If its in the example you gave of $600 dollars over the course of the year... 10 bucks.. Ya know that's a couple gallons of milk. Every week. That it'll cost you," said CPA, Mel Wittmaack.
