What does a drop from 6.2% to 4.2% in the tax that pays for Social Security mean to your paychecks?
It’s really pretty simple. Take your gross pay, reduce it by the amount you divert to flexible spending plans for medical and/or child care costs (since that money isn’t hit by the payroll tax) and multiply the result by 0.02. That will tell you how much your paycheck will go up starting in January.
Don’t trust yourself (or don’t want to spend the time) to do the math yourself? Then just use our new calculator: What the 2011 Tax Cut Is Worth to You.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The table below will give you quick look at what the payroll tax change -- part of the deal to extend the Bush-era tax cuts -- is worth at various salary levels. Once annual pay passes $106,800, the value of the tax cut stops rising. That’s because the part of the payroll tax that pays for Social Security applies only to the first $106,800 of income.
-
UPS Stock Plunges as Amazon Plans 50% Volume CutUPS stock is lower after announcing that Amazon, its largest customer, will slash its volume by more than 50% by late 2026. Here's what you need to know.
-
Why Microsoft Stock Is Sinking After EarningsMicrosoft is the worst Dow Jones stock Thursday as the tech giant's soft outlook offsets an earnings beat. Here's what you need to know.
-
Five States With the Largest EITC ChecksEITC Households in these states received a larger Earned Income Tax Credit (EITC) last year.
-
Downsize in Retirement With 2025 Tax Benefits: Three Key StrategiesRetirement Taxes Downsizing retirees may benefit from tax savings, lower utility bills, and freed-up income. But could a new presidency impact your home sale?
-
Gov. Hochul Vows to Deliver $1 Billion in Tax Relief to New YorkersState Tax The proposed tax cuts would benefit New York middle-class families.
-
Maryland Property Tax Assessment: What It Means for YouState Tax Amid a growing deficit, Maryland property values are rising. Here’s more of what to know.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
New Law Delivers Tax Breaks to Natural Disaster Victims, But Is It Enough?Tax Relief The legislation provides critical tax relief to thousands of natural disaster victims across the country.
