The new tax cut deal will see around 51 million people take home less money this year either from a higher tax bill or lower tax return. The average amount these families will be out is $203.
NEW YORK (CNNMoney.com) — Despite a sweeping tax cut deal that is supposed to keep everyone whole financially, if not better off, 51 million households will face a higher tax bill or a lower refund compared with this year.
The main culprit: a new payroll tax break that will not be as generous for many low- and middle-income households as the tax cut it is replacing.
The tax legislation that President Obama signed into law on Friday, will for one year reduce workers’ Social Security taxes. Workers pay 6.2% on their first $106,800 of wages. The tax cut deal will reduce that to 4.2%.
That payroll tax “holiday” will replace the Making Work Pay credit, which expires Dec. 31 and was part of the 2009 Recovery Act.
As a result, 51 million… continue reading
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