Did you notice your take home pay is a little smaller these days?
The reason for the withholding tax increase stems from the Making Work Pay (MWP) tax relief program that ended in 2010. The MWP program temporarily decreased tax withholding rates in checks in 2009 and 2010. This was to stimulate the economy by putting more take home pay in your pocket.
The program wasn’t extended for 2011 so the tax tables reverted back to the regular tax withholding rate tables. Higher withholding, lower take home pay.
This is not a tax increase. You won’t pay more taxes. It means you have more taxes taken out of your pay and you’ll probably get a larger tax refund next year.
No comments:
Post a Comment