Payroll Tax Increase Affecting Kentuckians

Payroll Tax Increase Affecting Kentuckians

Congress let a payroll tax cut expire Wednesday, prompting an immediate two percent tax increase on every taxpayer's paycheck.
If you noticed your paycheck got smaller Friday, you're not alone.

Congress let the payroll tax cut expire Wednesday, which meant a two percent increase in taxes on paychecks.

Social Security taxes were reduced from 6.2% to 4.2% in 2011. It reverted when Congress didn't renew it, which meant immediate changes on paystubs.

In Kentucky, the median household income is around $43,000 (according to Census data). That means  $840 taken out per year in taxes--around $70 a month.

Jennifer Hunt, who teaches family finance at the University of Kentucky, suggests budgeting to help with the cuts.

"We know people tend to live within the cash that they have available," she said, adding, "Look at their current spending...and see where they can cut back."
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