Smaller Paychecks After Fiscal Deal

Even though income tax rates did not go up for most people, payroll taxes did. The two-year-old payroll tax holiday is over.Instead of a 4.2% deduction for social security, it is now 6.2%.If you’re making $30,000 a year, you’ll pay about $50 more a month in taxes.If you’re earning $50,000 a year, you’ll contribute about $83 more a month.If you make $113,700 a year, you’ll pay an extra $189.50 a month in taxes.KEY News spoke with a Santa Barbara accountant who says most of her clients are under the impression the tax increase applies to people making more than $400,000 a year. The tax increase on the wealthy applies to income tax. Payroll taxes went up 2% for most Americans.