Employees taking home less in paychecks

Published On: Jan 10 2013 11:13:46 PM CST   Updated On: Jan 11 2013 07:44:17 AM CST
LA CROSSE, Wis. -

Most people who are opening their first paychecks of the new year are getting quite a shock. Their taxes have taken a jump.   

That's because Congress allowed the so-called "payroll tax holiday" to expire. In 2011, Congress passed a 2% cut on employees' Social Security taxes to help stimulate the economy, dropping them from 6.2% to 4.2%.

This year, Congress decided not to extend the cut.

Most people will definitely feel it in their wallets. "Let's say you're an average family, you have 2 working people in the family making $35,000 each so that's $70,000. That's $1,400 of extra social security tax so when you figure it over a years time, that's quite a bit of money," said La Crosse CPA Steve Franke.

Also, if you're getting ready to file your income taxes, be warned there could be some delays because of the last-minute deal with the fiscal cliff.

Tax software is one to two weeks behind schedule, and you won't be able to e-file with the IRS until at least the end of January, possibly later.