Smaller paychecks in 2013?

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Justus
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Smaller paychecks in 2013?

Postby Justus » Fri Jan 11, 2013 6:00 pm

With the end of the FICA tax holiday and also the regular increases in the costs of health insurance premiums and so on, my paycheck's feeling a lot lighter. I've got to redo my budget and I'm assuming a lot of other families are doing the same thing. Anyone else looking at their budgets this time of year?

nelson
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Re: Smaller paychecks in 2013?

Postby nelson » Fri Jan 11, 2013 9:24 pm

Yeah, this will cut into my fun money. So long stimulus, it was fun while it lasted.

Bichon Frise
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Re: Smaller paychecks in 2013?

Postby Bichon Frise » Fri Jan 11, 2013 9:32 pm

Since Congress and the President threw the SS program under the bus, I for one am happy to see the end of this "holiday." I'll probably save $2274 less this year.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

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DoingHomework
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Re: Smaller paychecks in 2013?

Postby DoingHomework » Sat Jan 12, 2013 1:03 pm

Bichon Frise wrote:Since Congress and the President threw the SS program under the bus, I for one am happy to see the end of this "holiday." I'll probably save $2274 less this year.


I am glad as well that both republicans and democrats supported the $120 billion tax increase this year. I would not go so far as equating it with the problems of SS or say they previously threw SS under the bus. We have a unified federal budget. SS obligations are the responsibility of Congress to provide for regardless of the health of the trust funds. That's why they are called entitlements. It would be nice to have a separate fund to pay out the benefits and to force Congress to appropriate or tax as needed to maintain the health of that fund. But the reality is that no such fund exists so whether or not it got fed properly over the last two years is mostly academic.

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Re: Smaller paychecks in 2013?

Postby brad » Sat Jan 12, 2013 1:30 pm

The new government in Québec decided to raise the income tax rate for people like me, so my combined federal and provincial marginal tax rate in 2013 is 54.75%. Of course my actual tax rate will be lower than that since not all my income is taxed at my marginal rate, but it does make things a bit tighter this year.

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Re: Smaller paychecks in 2013?

Postby DoingHomework » Sat Jan 12, 2013 3:30 pm

brad wrote:The new government in Québec decided to raise the income tax rate for people like me, so my combined federal and provincial marginal tax rate in 2013 is 54.75%. Of course my actual tax rate will be lower than that since not all my income is taxed at my marginal rate, but it does make things a bit tighter this year.


Is that because you speak English or did they do that to French Canadians as well? Maybe you're just being punished for being among the 1%

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Re: Smaller paychecks in 2013?

Postby brad » Sun Jan 13, 2013 6:41 am

DoingHomework wrote:Is that because you speak English or did they do that to French Canadians as well? Maybe you're just being punished for being among the 1%


Haha, I guess it's because I'm among the 1%, at least figuratively speaking (I don't really know or care what percentage I'm in; all I know is that my salary is above the threshold for the highest tax bracket). I don't mind, really, as I'm happy to support the social programs here and there's no other province in Canada where I'd rather live.

N2Deep
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Re: Smaller paychecks in 2013?

Postby N2Deep » Sun Jan 13, 2013 10:46 am

Justus wrote:With the end of the FICA tax holiday and also the regular increases in the costs of health insurance premiums and so on, my paycheck's feeling a lot lighter. I've got to redo my budget and I'm assuming a lot of other families are doing the same thing. Anyone else looking at their budgets this time of year?


I noticed this with my first paycheck. It was a LOT lighter. I may have to rethink some of my goals for 2013 because Im not sure I'll even be able to come close. If the first check was any indication... Im gonna be a couple grand lighter this year. :@
I can not dwell over that to which I have no control...

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Re: Smaller paychecks in 2013?

Postby N2Deep » Sun Jan 13, 2013 10:48 am

brad wrote:The new government in Québec decided to raise the income tax rate for people like me, so my combined federal and provincial marginal tax rate in 2013 is 54.75%. Of course my actual tax rate will be lower than that since not all my income is taxed at my marginal rate, but it does make things a bit tighter this year.


Did I read this right... you're loosing over half your pay to the govt? sum :swear:
I can not dwell over that to which I have no control...

brad
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Re: Smaller paychecks in 2013?

Postby brad » Sun Jan 13, 2013 11:12 am

N2Deep wrote:Did I read this right... you're loosing over half your pay to the govt? sum :swear:


No, I'm not losing over half my pay: the 54.75% applies only to the portion of my income that is over the threshold. The really rich people are the ones who are most affected by this because a big chunk of their income would fall over the threshold. I'm nowhere in that league.

The main thing that affects me is that interest income and bonuses are taxed at my marginal rate, so that means I lose more than half the interest I earned in my savings accounts and cuts my interest rate effectively in half. That's not much fun. It also makes me a little less likely to pursue freelance projects or something that would earn me a bonus at work, because I'd get to keep less than half the money.

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Re: Smaller paychecks in 2013?

Postby DoingHomework » Sun Jan 13, 2013 1:09 pm

N2Deep wrote:
Justus wrote:With the end of the FICA tax holiday and also the regular increases in the costs of health insurance premiums and so on, my paycheck's feeling a lot lighter. I've got to redo my budget and I'm assuming a lot of other families are doing the same thing. Anyone else looking at their budgets this time of year?


I noticed this with my first paycheck. It was a LOT lighter. I may have to rethink some of my goals for 2013 because Im not sure I'll even be able to come close. If the first check was any indication... Im gonna be a couple grand lighter this year. :@


Your paycheck will be 2% less because of this change. If you make $100000 a year it will be $2000 less.

N2Deep
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Re: Smaller paychecks in 2013?

Postby N2Deep » Sun Jan 13, 2013 1:51 pm

brad wrote:
N2Deep wrote:Did I read this right... you're loosing over half your pay to the govt? sum :swear:


No, I'm not losing over half my pay: the 54.75% applies only to the portion of my income that is over the threshold. The really rich people are the ones who are most affected by this because a big chunk of their income would fall over the threshold. I'm nowhere in that league.

The main thing that affects me is that interest income and bonuses are taxed at my marginal rate, so that means I lose more than half the interest I earned in my savings accounts and cuts my interest rate effectively in half. That's not much fun. It also makes me a little less likely to pursue freelance projects or something that would earn me a bonus at work, because I'd get to keep less than half the money.


Damn that... I don't need to move north. They are way too greedy up there.
I can not dwell over that to which I have no control...

N2Deep
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Re: Smaller paychecks in 2013?

Postby N2Deep » Sun Jan 13, 2013 1:54 pm

DoingHomework wrote:
N2Deep wrote:
Justus wrote:With the end of the FICA tax holiday and also the regular increases in the costs of health insurance premiums and so on, my paycheck's feeling a lot lighter. I've got to redo my budget and I'm assuming a lot of other families are doing the same thing. Anyone else looking at their budgets this time of year?


I noticed this with my first paycheck. It was a LOT lighter. I may have to rethink some of my goals for 2013 because Im not sure I'll even be able to come close. If the first check was any indication... Im gonna be a couple grand lighter this year. :@


Your paycheck will be 2% less because of this change. If you make $100000 a year it will be $2000 less.


While that looks good on paper I can assure you it's going to be more than that. The last check I had two holiday pays on. The check was like the second one didn't even exist. After taxes I get $160 something from one day of holiday pay. The increased taxes ate it up.
I can not dwell over that to which I have no control...

k11
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Re: Smaller paychecks in 2013?

Postby k11 » Sun Jan 13, 2013 2:05 pm

Yes, it is greater than 2% take home cut.

2% increase is on Gross and you still pay higher taxes.

DoingHomework
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Re: Smaller paychecks in 2013?

Postby DoingHomework » Sun Jan 13, 2013 3:55 pm

k11 wrote:Yes, it is greater than 2% take home cut.

2% increase is on Gross and you still pay higher taxes.


No. The change is SS is exactly 2% and was always calculated on gross pay. You personally K11 might see a slightly higher change since, based on your previous posts, you might make over the threshhold for the new tax to fund the Affordable Care Act. In that case though you should be stopped out on part of the SS taxes so that apart should be lower.

I think you guys might be confusing a change in withholding rules on income taxes. You can always change you withholdings to more exemptions.


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