More Money in Your Paycheck – The Payroll Tax Cut (Social Security Tax Cut)


In late 2010, Congress and President Obama passed new tax laws that take effect in 2011 (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010).

The Making Work Pay tax credit is gone.

As a result, most people will benefit from a cut in Social Security taxes (also known as Payroll Taxes).

Previously, people paid 6.2% toward Social Security.  Under the new law, people will be paying 4.2%, a reduction of 2% in their Social Security tax withholding rate.

That is good news for many Americans as it essentially means a 2% increase in your paycheck.

Under the old Making Work Pay credit, Americans making less than $75,000 were able to save a flat $400 over the course of the year.  That amount was spread out over each paycheck.

Under the new law, all Americans will save 2% on their first $106,800 of income (that’s the Social Security wage base limit or the maximum that wage earners have to pay into Social Security).  That is great news for higher income earners (those in the 25-28% Federal Tax brackets).  After all, they did not benefit at all from the Making Work Pay credit.

It is also good news for those who make mid-range salaries.  For every $1,000 you make, $42 will be withheld.  That’s $20 more in your pocket per $1,000 you make.

Due to the timing of the new laws, you may not see the changes in your first paycheck of the year.  It may take some time for payroll departments to implement the changes.  However, it will be made up.  If you don’t see the 2% savings in your first check, you will see it in your next check.  Additionally, you will see a 2% reimbursement to make up for the previous check.  After that, you will see your regular 2% savings in each check.

Low income earners will actually find themselves making less money under the Payroll Tax Cut.

If you make over $20,000 a year, the new tax law will benefit you.

This is because you are saving more than the $400 you would have saved under the Making Work Pay credit.  If you make exactly $20,000, you will see equal savings.

If you make less than $20,000, you will see less savings.

This affects about 45 million households.  On average, low income earners will see $210 less over the course of the year.  For example, let’s say you make $15,000 a year.  Under the Social Security tax cut, you save $300.  That’s one hundred less than the $400 you would have saved under the Making Work Pay tax credit.

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For some people who work for state and local governments, the savings will be even less.

Many people in those categories don’t pay in to Social Security.  Therefore, they won’t see any savings under the new tax laws.  There are about six million households that fit that category.

For those earning over $20,000 a year, the new payroll tax break will be a benefit.

A 2% increase in your paycheck is a nice way to open the year.

Still, there are those that fear that the payroll tax cut will hurt an already weak Social Security system that needs money.  Add to that the fact that low income earners won’t benefit and many have questioned whether this is a wise tax cut.

Update 2013 – The Taxpayer Relief Act of 2013 was signed by President Obama.  In the Act there is officially no extension of the Payroll Tax Cut.

How do you feel about the Payroll Tax Cut?

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Published or updated January 5, 2013.

Comments

  1. It’s a shame to see this replace the making work pay credit, but any reduction in social security taxes is a good reduction, I say. Especially for the self-employed…paying both sides is nuts!

    • It is nice to have a little less taxes!

      • While it feels nice to pay less taxes now…remember that Social Security is in trouble….so paying less now means less for when you retire as well.

        • Considering the number of years I have until retirement, any “investment” I make into social security is effectively a write-off for me. If it’s there when I retire, great, if not, I don’t plan on needing it.

        • Just a thought, but maybe they should raise the ceiling on those who pay social security above the $106,800 mark?

          • That would increase the amount of benefits that would need to be paid latter and considering the government is incompetent and is running Social Security into the ground, adding more benefits will only accelerate that process.

            Essentially every dollar Social security taxes adds a new debt to the total liability of the government making it even more insolvent.

            Rather than force upper middle class people into this black hole of financial destruction, it would be better if they invested the money in businesses and communities making everyone’s life better.

  2. I work for the government and saw a small reduction in my paycheck. The funny thing is that those of us who are salaried saw a small reduction while the hourly paid workers (who make less than we do) saw a large reduction in their paychecks. It is very odd to me.

  3. Prince of Thrift says:

    just like the democrats to take money from the poor while claiming to help them. I really need to find a job where I will once again be above $20,000/year. Still though the dems claim to for the poor, but the plan passed while they were still in control (according to this post) raises takes on the poorest people (those making less the $20,000)? Unbelievable!

    Yet, people will still be blind to the truth about those liars.

    • This isn’t a tax on the poor. There was the Making Work Pay credit prior to this new law that allowed those with certain salaries a $400 credit. This new law didn’t renew Making Work Pay and it implemented a 2% cut in Payroll Taxes.

      The change was made so that businesses (who pay towards social security) and workers would have more income to pump into the economy. More money changing hands could help companies expand (or stay in business) which helps everyone with a salary as well as those looking for work. That’s why this is a short-term tax change.

    • Still………..my beef is the rich are getting richer…a lot richer….Those under 100.000. do not have it easy, those under 20,000. have the hardest struggle. I still feel more aligned with the Democratic Party verses the Republican Party. I am a small business owner. When you see all the store fronts empty, those are small businesses that did not make it. God bless us all………….times will get better………….

      • And you think the Democrat party will help you stay in business… Good lord – the empty store fronts you just talked about, didn’t equal 2+2=4 to you, I guess. Guess you are also the type of business owner that “didn’t build your business but rather the government did”…

  4. It’s a great way to encourage people to “spend” and not “save”, assuming that’s the goal.

    I’ve also heard reports of some states increasing their taxes, so it’ll almost be a zero effect since the federal went down, but state went up.

    • I think the goal is to spend. The thought being that when we spend we build up the economy (I don’t necessarily agree).

      For those with increasing state taxes who qualify for the Payroll Tax cut, they are still doing a little better than if the cut wasn’t there (depending on their salary of course).

    • Since when does giving money to social security qualify as saving?
      I’m never going to see any of that money again.

  5. I’m just going to keep acting like that money is still be taken out of my paycheck and put it in my Roth IRA and then invest the rest.

  6. I forgot about it until I saw my wife’s pay check. It was a nice surprise! This will help fund her IRA this year.

  7. I was surprised they were cutting the SS percent too considering the sad shape SS is in financially.

    Regardless, I always like a little extra money. However, for many it won’t make a difference at all since they will still end up maxing out on their ss payment. It will just take a little longer to do so. (Instead of maxing out in July, maybe they will max out in October now.)

  8. As a low-income worker, allllll I needed was another cut in pay!

    As a Social Security recipient and a person who understands what a life-saver this program is, I’m not at all pleased at seeing a cut to that program. For me, it’s a lose-lose situation.

  9. Cutting the payroll tax does nothing. Business owners look at the long term. A small percentage reduction in the payroll tax is no incentive to create a job when you are committing yourself to pay wages, benefits and unknown healthcare obligations

  10. Are you really?

  11. What is the MEDIAN refund, while blowing a hole in Soc Sec. I’m amazed Democrats agree to this. Apparently seniors have NO voice in America anymore.
    Give us the MEDIAN amount of refund please. Estimates from propaganda MSM are $1K-1500, but many say average is $200, I don’t want “AVERAGE”. thank you.

  12. While the money would have gone to Social Security it does not remove the government’s obligation to fund promised SS monies. So the best arguement for this cut is that it will stimulate the economy now. In fact to meet SS payments the government will just have to borrow more money now and perhaps later. That money is borrowed in your name regardless of whether you think you will claim SS in the future or not. This is isn’t free money. It is money you are borrowing now that you will pay back one way or the other in the future.

  13. I calculated on median wages around $44K, the median annual payroll tax cut is $950.00 or about $20/week, I don’t know how anyone would consider this positive while blasting a $100 Bil annual hole in Soc. Sec. It is reckless and should be criminal, now Obama wants to cut the employer’s part? The RepubliCons won’t vote yes on anything except permanent Bush tax cuts in return, and it was Obama, the Wall St Shill, the most deceptive and deceitful President in US history, who extended those. I voted for the jackarse.

  14. I worry about this “tax break” coming due at the end of the year, like the income tax did. Quite a few people I know found that their employers were not withholding enough tax through the year, especially single people, and found they owed taxes or were not eligible for a refund.

    I have looked on the web for info (found this site) to see if the 2% was just deferred until the end of the year. I am self-employed and it will be interesting to see if I benefit immediately, although I doubt Iwill.

    Also, should we be skimping on our retirement payments into Social Security? I don’t really know of a retirement plan manager anywhere that would recommend a reduction in what you pay into your retirement plan.

    This will benefit companies, who have the burden of matching their employees’ Social Security payments. But as a self-employed person, I pay all of my Social Security. I am allowed half of my Social Security tax as an expense in calculating my income taxes.

    I think it’s a bad idea with not much merit, except to try and jump start the economy and if that is the goal it is much too little to have any real effect. We are likely to see a greater than 2% increase in the cost of gas thus negating any benefit a family may have derived from this paltry attempt at … what?

  15. This is absolute chump change. Making work pay credit? $400 over the course of a year? Chump change. Get rid of the whole dadgum tax code and go with fair tax. Then you will see a difference. This is what big govt does, give us back chump change that is our money in the first place. What a crock of feces. Spending does kick start the economy, but chump change is just that, a paltry amount of money spread out over a year doing nothing. Real tax cuts and leaving the rich alone would do much for the economy as well as setting real policy to cut fuel prices which is really what is killing the economy. High fuel prices translates to high food prices and other which passes on to us. Chump change will not compensate. I’ll take what I can get of my own money, but this is just a pitiful attempt to appease the cerfs from the great king..

    • My problem is the expectation that more money in your pocket translates to more consumer spending, which would stimulate the economy.

      But isn’t too much spending part of why we are in a mucked up economy now?

      Hopefully people are taking that chump change and shoring up their savings a bit or using it to pay off a bit of debt.

      For those who who are living paycheck to paycheck the tax cut probably helps a lot. But for everyone else, I’m not sure how much of an impact it would be.

      I’d rather see something more pro-active like not being taxed on earnings in a savings account. Then you are creating an incentive for people to save and build an emergency fund for themselves. When you have money put away you don’t fear spending as much.

    • This is something I can agree with The Fair Tax………….We do not know what we are missing…………..until all Americans know about the Fair Tax we will never get it…………..one day maybe……………

  16. OK so I save $2 a month in my check but I pay $15 a month more if I want to buy a house? With all thoe extra houses sitting on the block weighing down the economy you would think the government would want to focus on how to get that backlog to end and not put anymore deterrents out there? If prices on houses keep falling so will the tax base on local governments who in turn will need to raise taxes again to make budget and well… its endless. We need a comprehensive plan to create jobs and get the surplus houses bought. Anything less is Kabuki theatre.

  17. Everyone needs to understand the massive fraud that’s going on, the worst in US history. ZIRP (Zero Interest Rate Policy) is a CRIME against humanity, literally, 5 million more Americans went into poverty in the last 3 yrs, many seniors depending on interest on savings, they aren’t buying medications, INDEED, some DIED! Bernanke and Geithner are perpetrating this crime to bailout the banks on their bad mortgages, plus to manipulate 30-yr fixed rate mortgages to 4% or lower, to bail out liar-loaners and deadbeats underwater on houses. The dirty secret is they told the banks NOT TO FORECLOSE because the Squatters are fueling retail spending by $50 Bil/yr, the average days for not making a payment on a defaulted/foreclosed home is now 688 days. Some haven’t made a payment FOR 5 YEARS! You can NEVER have a productive society, perhaps a democracy while punishing savers to bailout debtors. The banks are still holding billions of toxic bad commercial and residential mortgages OFF BALANCE SHEET. The Fed took hundreds of billions from the top 6 banks and gave them Treasuries, the banks are still marking the values at 100-105%! And so is the Fed, on their bal sheet. The banks then loan these “excess reserves ” BACK TO THE FED! The Fed is paying them .25% interest on this PHANTOM MONEY! This is how they are recapitalizing the banks, and they also by law, tell banks they can’t pay over 1/2% on CDs more than the average rate, otherwise, they will withdraw their FDIC insurance. This is for starters, folks. There’s much more. The US entire economy is based on fraud, we are becoming a 3rd World country. And the corporations have NO plans to create jobs here, that’s pure BS! They are taking their cash and buying back their stock (that’s ALL the public companies live for), they expect to spend $600 Billion in 2012, instead of paying workers a living wage or hiring, they reduce the outstanding number of shares, thus creating LEGAL FRAUD ACCOUNTING, to show profits. (if there’s 100 shareholders and they make $1 profit, and they buyback 10 shares, they now have $1.00 in profits divided by 90 shareholders, for example. They also use offshore low-tax havens, and book profits to a shell subsidiary there, thus not paying US tax))

  18. Michael Patterson says:

    I am completely opposed to the Payroll Tax cut handout because my research indicates that Social Security represents a Federal Government -managed pension fund with good benefits for those who are willing to educate themselves about the operation of our Social Security Trust Fund.
    I want Social Security to be there for my children and grandchildren.
    The Payroll Tax cut is a Political handout that give families $1000/yr to spend that they should have been contributing to Social Security. Our Politicians are already giving a deficit spending handout of $4,000/yr to every American, rich or poor, adult or child. This equates to $12,000/yr for a family of four, so there absolutely no economic justification for the Payroll Tax cut.
    There is a Political justification — weaken Social Security so that Money Managers get to manage more of America’s retirement funding.
    Money Managers get more fee income, Politicians get increased campaign contributions from Money Managers.
    Americans lose our Social Security Trust Fund.

  19. I’ve wtnessed first hand on so many occassions from so many different people how the social security system gets abused. It really does.

  20. I am opposed, the median “refund” while weakening Social Security benefits is about $950/year, meaning half the population gets a refund of less than $20/week, those in the lower median probably get $10/week, the masses, the Sheeple have NO clue how this “TOKEN” makes them feel better, while weakening the longterm viability of Soc S

  21. FOR GOD SAKE LETS FORGET ABOUT POLITICS FOR ONCE AND THINK ABOUT THE PEOPLE! Your stupid antics will be affecting millions of lives in America. This is the main reason why the average American is fed up with politics in this country. It is not about the wing you stand on it’s about the people your are serving! GET YOUR ACT TOGETHER!!!

  22. This Is Not Cut... says:

    This is a REDUCTION in your WITHOLDING… NOT THE TAX. That means that you still owe the money at the end of the year and the Social Security system is still getting their money… just later on when you file your taxed. The end result is people will have more now, but less at refund time…

    I’t s mind game.

    • See? THAT is what I was worried about. I looked all over the net for something that would say that. No one is saying that in the articles. I posted above regarding the same. I know that for some single filers of modest incomes, they ended up owing taxes at the end of the year or didn’t get a refund because employers weren’t withholding enough in the first place even though they had not changed anything. They had reduced the amount during the year to be recollected at the end of the year. There is a list of that that goes on. That home buyers tax credit a few years ago, why didn’t they just call it a loan? People blew that money.. they should have put it on their mortgage or saved it to give back.

      I have learned not to trust anything from DC. They are not interested in the welfare of the people (or our country, it seems); they have a different agenda. If it looks like an immediate benefit to average citizens, you need to hunt high and low for the catch. They are not going to take less money from you willingly. That is the money they play with. They really can’t do with less, unless they borrow more.

  23. NOT TRUE! IT’S A REDUCTION IN THE TAX ON THE EMPLOYEE’S SIDE OF 2%. It will need to be made up later and WEAKENS SOCIAL SECURITY! . They will raise (it’s built-in anyway) the limits on taxable income/raise retirement age, watch. All for $5-10 a week? The upper median doesn’t need it. Obama allowed the Bush tax cuts, those should have terminated. Several studies show INTEREST RATES NEED TO BE RAISED IMMEDIATELY! 1% !This would benefit SAVERS, many seniors. YES, we’re still alive, all you irresponsible DEBTORS, especially those of you buying new cars now that FraudStreet has revived the subprime auto market, back to 14.5% of sales! And they are reviving the packaging/securitizations too! You debtors never learn, or should I say taxpayers who will get stuck with the bailout again?
    From David Stockman:
    Stockman called the $175 billion payroll tax holiday for workers “the Big Fiscal Lie.”
    “Unfortunately, workers need to pay every dime of currently scheduled taxes to fund Social Security and the other big government programs their representatives keep supporting,” he said. “You don’t get extra pocket money for Happy Meals you shouldn’t have and Under Armour you don’t need just because someone is trying to save a job at 1600 Pennsylvania Avenue.”

  24. it can be paid back….using some of the war savings……that’s what this is about….HOW TO PAY FOR IT………………….

  25. Saudade Smith says:

    Although we all prefer a reduction in the social security taxes we pay, the “real” price is pushing the social security further into oblivion. I realize “young” workers have lost faith in the furute existence of the social security; however, if we all pitch in, we can save it for all, young and no-so-young people. Still, I would prefer to see the social security reduction applied to those making less than 30,000 because they need that extra money the most. Most of us making more will not suffer if we pay an esxtra $100 a month to invest in everyone’s future.

  26. Not getting the Making Work Pay refund will hurt. Unfortunately, I do not benefit from the Payroll Tax Cut. I have never had to pay in for Social Security anyway. That extra $400 each year did wonders. I guess that’s the price of government though. What is done to help some, hurts others…

  27. Good Article. I see 4.2% is for individuals but what about self employed. I read it was a whopping 13.3% do you know?
    Thanks.

  28. Augeydoggy says:

    Glenn – you might consider a basic economics course online to supplement what you have learned from experience. While overspending bedeviled the US economy, its roots were in deregulation and easy credit, and at least there is no easy credit anymore. But while saving is laudable and Americans have undersaved for a long time, spending is the only way out of a recession, according to Keynes, which is why the administration looks for small changes that benefit the most Americans. If the richest get cuts, it isn’t so meaningful, as they will tend to spend less of it. Spending is also why the Administration has done the bailouts and sought additional funds for infrastructure, etc. It increases the deficit in the short-run, but growing the economy is the only way out of a recession (even by definition). Once the economy is healthy, that is the time to look at tax increases and changes, and spending cuts. Booms are caused by piling spending on top of spending, and busts by cutting on top of cutting – we need to break that cycle. For perspective, the best book I read in business school was “Extraordinary Popular Delusions and the Madness of Crowds,” published in the mid-19th century.

    • Man, I wasted a lot of time in school then.

      Spending isn’t the only way out of recession. A recession is part of a normal business cycle. Economies expand and contract. The problem here, though, is our past recession wasn’t part of a ‘normal’ cycle. Sure it’s a reaction to over-expansion, but that expansion came as a result of too much easy credit.

      So what gets the economy healthy again? The spending that is the result of the payroll tax cut? If the economy were simply going through a contraction then that might be a band-aid to get us through. But there are deep issues with housing and credit that need to be fixed. Or at least we have to go through some growing pains.

      Many economists have said we haven’t spent enough to get us out of this. The stimulus that we had, as big as it was, may not have been big enough to have the effect that was needed. Unfortunately economics are affected by politics as well.

      Yes, we can spend our way out of a recession, or even a depression. We saw this after the depression and the resulting economic boom in the 50’s. But I don’t think the spending of the Payroll Tax cut is really a lot to help in the long-run. The extra cash is nice to have, don’t get me wrong, but a big part of our problem as a country is we’ve spent too much on credit. That needs to be fixed first. So that extra money needs to go towards debt before we should really be out spending. Otherwise we’re just keeping the balloon afloat rather than fixing the underlying issues.

  29. Augeydoggy says:

    What are the “deep issues with housing and credit” that need to be fixed, and how are they dealt with by spending cuts? Also, by “credit” do you mean government spending or consumer credit?

  30. lee fintel says:

    The author of this article is wrong. The Making Work Pay tax credit was not spread out over the year. It was money subtracted from your year end tax bill.

  31. I’m all for lower taxes but these “Tax Cuts” don’t reduce your federal tax, they reduce your contribution to an all ready crippled SOCIAL SECURITY! Washington needs to reduce Government Spending! Then we all will be able to pay less without adding to an already staggering deficit and still have something left of what we payed in to collect when we grow old!

  32. All the blogs I read, including the respected calculatedriskblog feel this payroll tax reduction will be extended for the rest of the year. What Repubs will demand in return, my guess is they always come back to the Bush tax cuts made permanent, but I see Obama is projecting a deficit of $900 bil in 2013 based on those expiring. Then there’s the Keystone Pipeline, which is the next demand, and Obama has already caved on that I believe he needs the oil companies $$$ for reelection, due to Wallst. has sent Romney (their Man) $500 million to Obama’s $63 million so far. That pipeline goes over a big aquifer but it’s route is being altered.(Responsible delay by Obama) That oil is too heavy to be refined in Texas for our use, this is a giveaway to the oil companies who want to continue the Canadian Oil/Tar Sands, where they need a permanent reason not to kill it, despite massive environmental destruction(forget Kyoto) This oil is going to be EXPORTED out of the Gulf Coast, not used for our gasoline I am pretty sure. In fact, gasoline consumption has plummeted in the US, due to unemployment and the doubling-tripling up of homeowners, it’s less trips for shopping. The refiners are a MONOPOLY, they have cut gasoline production now to 85%ish and are exporting gasoline to make us pay record prices during record low demand. US oil demand hit a 15 yr low I believe.
    http://globaleconomicanalysis.blogspot.com/2012/02/petroleum-3-month-rolling-average-turns.html

  33. I absolutely agree with the post above, especially the monopoly and cutting back on production to drive up the price, given the supply/demand dynamics of the pricing. Back in the 90s the oil industry shut down refineries all over America. Wichita lost 5 (heard this in a town hall telephone meeting conducted by then Sen. Sam Brownback) Vickers, Fina, were 2 names I remember. In that same decade the oil and gas industry decreases supply, the auto industry rolls out heavy marketing for their gas-guzzling SUVs. Oh BTW do you recall the whining the O&G industry did about the EPA standards and costs to keep subpar refineries “open” trying to sell it that THAT was why they shut them down? Of course, I do believe BP bought up a few of them. So, supply decreases. Every human “bot” in America bought an SUV and didn’t change the way they drove even though fuel economy went out the window. And that would be demand increasing. So, the question in 2005 wasn’t “Why is gas 4 dollars a gallon?” (you have to make your voice sound funny and nasally for the full effect) but “why isn’t it 8?”. Because, silly, 4 was the squealing point of the American public and this was a test run. Then, when Detroit’s car sales fell off, we bail them out. For what? For helping to ruin our economy? Because all that money that went to one corner of the room to pile up with highest quarters reported ever, took money away from other businesses and started the downturn. To be compounded by the deregulated banking industry losing its mind with Wall Street. Add the cost of the war. Combine all that and some things we don’t know about….yet, and the question isn’t “why is the economy in the toilet?” it’s “how is this even still working?”. Another good question is… How did the auto industry not see (like most people did) that gas was going to get ridiculous with them turning off the taps? I mean, don’t they do market research, availability of gas to prospective car buyers? I mean GE couldn’t sell refrigerators until the government got rural America electricity – which is probably why folks in the middle of nowhere got electricity when they did. Because GE wanted to sell every housewife a refrigerator. This isn’t a new concept. And only the bank and SBA ask for a 5-year business plan, most extend out much longer than that for the big pay off.

    And now we have Iran (right on cue) throwing in their 2 cents… again. Funny how it’s just Pete and repeat around here but half the country acts like it’s new, first time around. Most of us weren’t even alive for first time around. It’s like TV in the summer, nothing but reruns.

  34. You’re right on the money, Kathy. There is no “common good” left in the US, the corporations own the politicians and regulators. It’s pretty obvious the communists have it right in controlling their gasoline prices, the lifeblood of the working class. Of course, they export, we (despite MSM bs) don’t, being only around 15% of GDP, only 8% sent to Europe. Germany has unions and the highest exports and wages but health care is provided for the “common good” . The unfortunate trend in the US now is revolving credit is rising again and savings rate is falling from 5+% to 3.7% as Americans are now paying basic expenses on credit, even rent ,while depleting any savings.

  35. It is nice to have less withheld, but my question is this: Does this just mean our social security pension will be less because we are paying in less? So do we get more now and less later when we retire? Anyone know the answer to this?

    • They said yesterday on the news, extending it for a year adds another $100 Billion to the deficit(and Repubs agreed to not offset it? why? what is Obama giving away THIS time?) So, it has to be made up somewhere, later on, raiseing the retirement age, limit on income taxed, etc.
      It’s asinine. It’s not $900-$1K/yr for most workers, that’s only if you make $50K/yr. Most workers get only $10/wk from this. ASININE uninformed public, we can’t wait to start collecting SS early this year because the rest of you are letting them destroy it. If I wait til 66 to collect it’s $500/mo more, but you’ll destroy it completely in that time.

  36. Voting himout says:

    Anyone who thinks this is a GOOD thing, is dead wrong. just give it another ten years. You will all be kicking your self in the pants for voting these clowns in to start with. Mark my words.

  37. So I work part time at a CA state dept. and earned pretty much exactly $20000 for 2011, is this bill the reason why I am now having to pay $200 to the fed? I don’t have an extra $200, all my money goes to paying off student loans, rent, food, and gas!

  38. Shane….

    You need to call the IRS and ask them what is the debt for. 1-800-829-1040 (cute, no?). What is sad is I have that memorized. A couple of years back to “stimulate the economy” Obama wanted more money in people’s paychecks so they would spend it and bolster the economy (some groups DON’T spend their “extra”, it does not go in the economy). Unfortunately, what younger, single people, with no dependents found out that even if they only claimed themselves through the year, their bosses weren’t withholding enough income tax… so, at tax time instead of a refund they had a debt to pay, or a much smaller (if they were lucky) refund than they thought they would get. But your question might be right on, it could be a deferment of paying the payroll tax until the end of the year.

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