Why Your Paycheck Just Got Smaller - NewsChannel5.com | Nashville News, Weather & Sports

Why Your Paycheck Just Got Smaller

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by Chris Cannon

MANCHESTER, Tenn. - Crystal Dye noticed something was different with her first paycheck in 2013, it was much smaller than the last paycheck of 2012.

"I noticed it was extremely short," Dye said.

She works at Title Cash on Hillsboro Boulevard in Manchester. She did not know changes were coming to her income in the new year.

"I have three children, I am a single mother, I work hard," Dye said.

Still, she will have less money to spend because the social security tax holiday expired on December 31st.

Congress did pass a fix to the so-called fiscal cliff that avoided a rise in income taxes for a majority of Americans, but lawmakers did not vote to extend the two percent social security tax cut. That rate rose from 4.2% to 6.2%

For someone making $30,000, they will now take home $50 less a month. A household with an income of $50,000 will now make $83 less a month. And someone earning $100,000 will see $166 a month less in their paycheck.

Dye will have about 40 fewer dollars a month to work with. It might not seem like a lot to many people, but the mother said it adds up.

"Cutting the Direct TV off, that was my $40 bill. That's my $40 a month bill, just so my kids could watch TV while I cook dinner." she said. "$40 is a tank of gas in my car, $40 gets to work and back in a week."

Dye put the blame for the tax increase squarely on the shoulders of lawmakers in Washington, D.C.

"I don't think they could start to understand what life is for the average person, because they've never had to live just an average life. But we're struggling out here. And we're busting our tails and I don't appreciate it, I really don't," she said.

While the increased deduction took affect on January 1st, you might not see the extra money taken out of your first paycheck of the new year. Employers have until February 15th to make the changes to your deductions.

email: ccannon@newschannel5.com

 

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