I'll be the first to admit that I do not keep up with what goes on in Washington and what tax cuts survived and which ones expired. I was curious though when I opened my husband's pay stub and saw that the social security tax dropped. Was this supposed to happen or did payroll screw up? It also looks like the federal taxes increased. Can someone give me the 411?
The "make work pay" tax credit has expired, that's why the federal is up. They've also decreased social security, I believe by 2%.
Federal tax is DEFINITELY higher. We got a notice with our first check of the year alerting us to the increase.
My husband's amount in his paycheck changed (increased) near the end of 2010. When we inquired about it, the payroll person informed us that once you pay a certain amount into Social Security for the year, you do not pay more. So if this is a pay stub from the end of the year, that is why it wasn't taken out. If this is a new pay for 2011, then I don't have your answers. I would contact his payroll person. Hope this helps. :)
For many, many years the rate for social security deduction was 6.2%, for 2011 it has dropped to 4.2% (medicare remains the same at 1.45%).
Yes, federal tax have increased, especially for those who claim single with 0 or 1 dependents.
The net effect is most people will see a slight increase in their net pay.
