Is your paycheck smaller than it was in 2012? - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Is your paycheck smaller than it was in 2012?

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Notice anything about your first paycheck of the year?
Even though Congress and the President agreed not to raise taxes on Americans
making less than $400,000 a year, the agreement did not extend one tax cut that had been in place for the last two years.
If you earn a paycheck, you're paying 2% more for Social Security.
About $1000 on an income of $50,000. It's now 6.2% instead of 4.2, and many say that will make a big difference in how they manage their money.
A.J. Persinger is really good at diagnosing problems under the hood, and it didn't take him long to notice something a little off in his paycheck this week.
"When I woke up on the first of January I knew my taxes were going up," Persinger told WBTV. "And when I got my check and looked at my statement it was real instant, I could tell by comparing mine from this year to last year."
From the garage to the front counter, blue collar to white, if you get a paycheck, you're paying more.
"The withholding rate used to be 6.2% and they reduced it to 4.2% to stimulate the economy and that provision expired and it was not extended," said Gary Morgan, a Certified Public Accountant in Salisbury. "Every person that gets a W2, if they make $1, their taxes went up."
Today Morgan was in a webinar learning about the new changes to the tax law this year. He says the increased Social Security tax can't be avoided.
"There's no deduction that can offset it or anything like that," Morgan added.
It is only 2%, which doesn't sound like a lot, but it adds up to hundreds or thousands during the year, depending on your income, and for some that will mean
cutting back.
"Normally I only get one vacation a year, this year I'm going to seriously doubt whether I can go out of the state or stay close to home," added Persinger.

The money will go to pay Social Security benefits in the future, but in the present it's a tough pill for some.
Bottom line, if you make $50,000 a year and you get paid every Friday, you will see about $20 less in your check this week.
The Tax Policy Center, a nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement negotiated between President Barack Obama and Senate Republicans.

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