If payroll tax cuts are not extended for next year how iwll that affect you?

[imagine]

Hmmm...My bad. I mistakenly believed the money from this tax cut was being funded from elsewhere.

This was a Bush thing, huh? and now supported by Dems. I have to wonder what the vote for this looked then.

I think the Bush cuts were different than the payroll tax cut.

"What is the payroll tax?

The Social Security payroll tax is normally a 6.2% levy that comes out of every working American’s paycheck. (That’s roughly 160 million people.) The money helps fund the popular programs Social Security and Medicare. The tax is capped once you earn $106,000."

What is the payroll tax cut extension? GOP-led Housespam! It is better fried than typedrejects Senate-passed billspam! It is better fried than typed - NY Daily News

Bush cuts are do to expire soon to are they not?

"Bush-era tax cuts: If Congress does nothing, the 2001, 2003 and 2006 tax cuts will expire at the end of December 2012.

If they do expire, most Americans' tax bills would go up and the surge of additional revenue into federal coffers would greatly improve the deficit picture over the next decade.

But many worry the overnight jump in taxes could hurt the economy if it's still weak. And others say higher rates across the board is not the most efficient way of reducing deficits.

In any case, most Republicans want to make the tax cuts permanent while many Democrats want to make them permanent for everyone except high-income households."

Bush tax cuts: The real endgame - Nov. 28, 2011

[227melissa]

You can not cut revenue when you are 15 TRILLION in debt. I could care less about the blame game it's done. I want the people in Washington to quit all the BS and do some real work on the debt. This goes for all parties They're all full of it !!!!!!!!!!!!!!!!!!!!!!!!!!!

[dcompton]

Since I don't make even 50,000, it wasn't a lot of money. It was nice to have the few extra dollars, but not having it won't be a crisis, at least for me. It never amounted to much anyway.

[Nishu]

Distractions. Your government is stealing from you every time they expand the money supply, and that same system is what allows our government to go into so much debt in the first place. None of this matters beyond the fact that these people are incompetent.

[bunnys]

I am a single school teacher. I make about 45k and some change.

$80 per month would be really tough for me because I run an entire household on just my income.

I have no idea what I'd cut. I don't have cable television, don't go on vacations I have to pay for (only travel with professional grants and student trips to Europe) have a $0 budget for entertainment and have recently been thinking about how I could cut my food budget. I think I'm already so naturally frugal with food (rarely throw any food away, cook only once or 2x per week and eat the same thing night after night and already make most of my food from scratch and use low cost house brands and cheaper name brands) that I really couldn't cut my food budget. I can't cut my cell phone as it's the only phone I have and I already have a pay as you go plan for $30 per month. I can't imagine where I'd find a cheaper plan and $5 saved on cell phone monthly is a far cry from $80 EVERY month.

Seriously, I don't know how I'd be able to absorb this. I could probably cut the only thing I spend any money on--my clothing and hair. I've already begun stretching my once every 2 months trip to the hairdresser for a highlight to once every 3 months. I can only go so long and the roots start to distract my students.

I simply don't know what I'll do.

It would really be great if this thread could evolve into any hidden hints for cutting spending anyone out there knows--beyond the standards that most frugal people employ anyway.

I got nothing here, though.

[pollypurebred39]

I think the Bush cuts were different than the payroll tax cut.

"What is the payroll tax?

The Social Security payroll tax is normally a 6.2% levy that comes out of every working American’s paycheck. (That’s roughly 160 million people.) The money helps fund the popular programs Social Security and Medicare. The tax is capped once you earn $106,000."

What is the payroll tax cut extension? GOP-led Housespam! It is better fried than typedrejects Senate-passed billspam! It is better fried than typed - NY Daily News

Bush cuts are do to expire soon to are they not?

"Bush-era tax cuts: If Congress does nothing, the 2001, 2003 and 2006 tax cuts will expire at the end of December 2012.

If they do expire, most Americans' tax bills would go up and the surge of additional revenue into federal coffers would greatly improve the deficit picture over the next decade.

But many worry the overnight jump in taxes could hurt the economy if it's still weak. And others say higher rates across the board is not the most efficient way of reducing deficits.

In any case, most Republicans want to make the tax cuts permanent while many Democrats want to make them permanent for everyone except high-income households."

Bush tax cuts: The real endgame - Nov. 28, 2011

Sorry, what you're talking about is what I meant.

Our news reported that this $40 thing is what Bush had put in place. Obama just wants it to continue.

[brennasmom]

Welll it's not going to hurt us substainsially but I am thinking about how many groceries I can buy for $80 using coupons... and for us with a 2 income household I guess it would be $160 per month (if I am understanding correctly...)

[imagine]

Here is a chart showing the amounts that will have to come out of paychecks if the tax cut is not extended

$50,000 $1,000 more a year out of current pay checks

and it will go up to $110,100 which would be $2,364 more a year out of current paychecks

Payroll tax cut impact: What if it's not extended? - Dec. 20, 2011

[nodmicks]

Extra cash out of course is going to make a difference to most of us. We personally will make due. We always make due. However i don't think they should have ever done it in the first place. Your in debt? Take in less revenue. It just doesn't make sense to me.

[RaineyDaye]

Our news reported that this $40 thing is what Bush had put in place. Obama just wants it to continue.

The payroll tax relief was done in 2010 to be enacted for 2011. The Bush tax cut was different, and included a tax decrease for the top 1% that was to expire at the end of 2010 but the Republicans refused to let expire.

From IRS.gov Dec 17, 2010:
Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits.

[MomToTwoBoys]

I have a really good example that would go with this:

Last year, DH made $43,484. This year? $30,800. Yeah, that's a while $12,600 less.

Last year, I brought in about $475 per month for my military pension, along with $233 per month for the kids' tax credit. This year, the only thing that saw any increase was the tax credit but only because we claimed deductions for moving expenses in December 2010. That was effective July 2011 and was about $569 a month.

But we're living with almost twice a mortgage payment, almost twice a utility bill, etc. We're still making ends meet.

What are we doing to trim areas?

1) Cutting the cable down.
2) Cutting back on personal expenses such as hairdressers (I don't color my hair at all now), clothing, etc.
3) DH quit smoking (this has been three weeks now, but he's still spending in terms of cravings -- significantly less and won't be permanent).
4) Looking at buying out our cell phone contracts when taxes arrive and moving down to a pay-as-you-go on both of them.
5) Cutting the food budget by a lot. We already cut enough as it is.

People think "Well crap, if there's a payroll tax break loss and we end up paying more per month, where are we going to cut next?".

It's easy:

For us, it means going back to work at a job that makes more than we get currently as far as tax credits are concerned. That means I'd have to get a job that makes $800 + $600 + extra $$. The $800 per month is for daycare (yeah...), the $600 is the tax credit and then the extra on top of that would be for savings or whatever else.

So if it came down to that and we didn't know what we could do to further trim, we'd look at what we can do to add to it. If it meant getting a second job, so be it. If it means moving to a neighborhood or city where the jobs were more bountiful and paid better, then so be it.

Gone are the days where you can hold the same job for 20+ years and expect to live within your means with the changing economy.

[ladytoysdream]

According to our local news channel this evening, the lawmakers have extended this out 2 months. So no change for awhile.

[brennasmom]

According to our local news channel this evening, the lawmakers have extended this out 2 months. So no change for awhile.

I saw this... so does that mean end of Feb? That will be here in a blink.

[brennasmom]

MomToTwoBoys ~ lots of great points. I think in these times it is prudent for all of us to be frugal. You just never know. There are no guarantees... we're just all holding on for the crazy ride.

[miss_cas]

If you're on Social Security disability, you should wonder. These cuts will affect how much SSDI will be able to pay out. Govt has said # of new SSDI claims of somewhat challenged older workers have increased as no one will hire them after they were attritioned out. New outlook has SSDI needing to cut payouts by 2015. In 2011, the payin for SSDI was reduced due to the payroll tax cut. This has me concerned as does my loss of the medicare part B? discount in 4 years -- $1350 SSDI paying $750 monthly for 80/20 Medicare with deductibles and expensive RX copays won't be possible living independently. I'm getting more education, reducing my emotional burdens, useless demands on my time and planning to work full-time within 3 years.

I have decided returning to the working world and slaving to get myself out of debt and finances back into a good state would serve me better than ever voting again or watching any national news coverage with so many overstatements for dramatic effect. It just makes me sick.