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Taxes still rise despite fiscal cliff deal
Posted: 01.02.2013 at 6:33 PM
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The vast majority of Americans will pay higher federal taxes in 2013.
KIRKSVILLE, MO -- The vast majority of Americans will pay higher federal taxes in 2013.
The tax package negotiated by President Barack Obama and Senate Republicans was passed by Congress. The approval will protect 99 percent of Americans from an income tax increase, but that does not mean we are in the clear! Many workers will still see their taxes rise.
Steven Sorhus, a local accountant tells us what this means for taxpayers.
"What's going to effect taxpayers most is that payroll tax hike," Sorhus said. "So for the last two years we've been enjoying a holiday of 2 percent on Social Security tax that hasn't been taken out of our pay checks every month, that's going to end."
The higher federal taxes are largely because of a temporary reduction in Social Security payroll taxes. The payroll taxes in Social Security expired on New Year's Day, and the tax package did nothing to prevent that from happening.
Sorhus tells us many will notice the change in their next paycheck. He said it's going to be a little less than it was and it will be that way indefinitely.
A nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013, under the agreement.
High-income families will get the biggest tax increases, but many middle- and low- income families will pay higher taxes as well.