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.18093988
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.
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