Editor’s note: Lawyer and car-buying expert Adam Goldfein fills in for Clark Howard Monday the 19th – Wednesday the 21st of this week. Below is a summary of some of what he discussed. Visit AdamGoldfein.com for more information.
With the fiasco surrounding extending the payroll tax cut, it’s easy to lose sight of what it all means to you. Adam Goldfein has the numbers to put it in perspective in your life.
The payroll tax cut impacts what shows up in your paycheck. In short, it helps you the more money you make.
Right now, you pay 4.2% on the first $106,800 you make. Next year, that cap is being raised to $110,100. (Editor’s note: President Obama signed a two-month payroll tax cut extension through February 2012 into law two days after this segment aired.)
Should the tax go back to 6.2% sometime in 2012, here’s what it means to you:
- If you make $35,000, it will cost you $700 over the year
- If you make $50,000, it will cost you $1,000 over the year
- If you make $75,000, it will cost you $1,500 over the year
- If you make $90,000, it will cost you $1,800 over the year
- If you’re right at the current cap of $106,800, it will cost you $2,136 over the year
- If you make more than the proposed 2012 cap of $110,100, it will cost you $2,341 over the year
