Washington, DC – Paychecks are getting smaller. While many Americans are breathing a sigh of relief that their income tax did not increase, there is nonetheless a tax increase that will impact all paychecks.
The Social Security payroll tax rate was reduced for 2011 and 2012, with the employee contribution cut from 6.2 percent to 4.2 percent. The intent was to put more money in people’s pockets, thus stimulate spending. The rate will now increase to the former level, resulting in smaller paychecks for American workers.
“If a person was fortunate enough to have received a pay raise, it’s likely that this Social Security tax increase will wipe out most of it,” said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling (NFCC). “Americans, particularly those already living on the financial edge, need to act fast to adjust their budgets accordingly.”
To help consumers find extra money to offset the tax hike, the NFCC suggests exploring the following areas:
For help finding hidden money in your budget, reach out to a trained and certified counselor. Call American Financial Solutions at 1-888-864-8659 today.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help more than three million consumers through close to 750 community-based offices nationwide. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09and our blog: http://financialeducation.nfcc.org/.