E-mail updates
Follow on Twitter
Subscribe to RSSThe debate over the Bush-era tax cuts made for great political theater. But now that President Obama and Congressional Republicans have cut a deal, it’s time to think about what it will mean for you come tax time.
Earlier this year, when bickering over the tax cuts was in full swing, the Tax Policy Center came up with a handy, customizable calculator that allowed people to see how the plans Democrats and Republicans were proposing would affect taxes.
Now, the calculator has now been updated to reflect the compromise plan. Obama signed the new tax bill into law earlier this month.
The tax bill extends tax cuts for the rich and benefits for the unemployed. It also adds a Social Security payroll tax cut for all workers.
The new calculator lets you compare what your bill will be under the new tax deal to what it would have been if the tax cuts had either been extended or allowed to expire.
The tool also allows you to customize based on age, income level, marriage status and how many children a family has.
Take a deeper dive and you can also alter details such as childcare expenses, charitable contributions and mortgage interest.
Leave a Comment:
Thank You government......
For letting us keep a little more of our OWN money!!!!!
You know, if our employers just refrained from telling us our "gross income," we wouldn't hear any of this "thanks for keeping more of our money" argument.
If employers didn't "show" the taxes coming out / if the government just taxed the employers directly and we just made less money, we wouldn't have to fight this tax battles with the voters. We could fight it in the very public lobby stage, where employers would have to answer for lower salaries.
Say, for example, I make $50k gross, and $37k after taxes come out. If I just went into the job knowing I made $37k as my salary and let my employer worry about the taxes, I'd have much less to complain about. I can "fight" with my employer for more money, and let the powerful business lobby fight for better tax rates - it seems they have a much louder voice than the consumer does anyway
Ignorance is bliss, eh?
Ignorance isn't always bliss. Usually the bit where what you don't know comes up and bites you on the kiester. Suggesting we let corporate lobbyist protect our interests is a bit like asking a fox to watch a hen house. In fact, it points up the real problem with government today. Soft money. Our elected officials get lots of money from this little loophole and with no requirement to show where it comes from they don't even have to worry about tripping up any conflict of interest laws. In short they're a bunch cheap harlots for anyone with the money and motivation to buy 'em.
Also while I'm on my rant, Republicans (And as much as I hate to admit it I'm a registered republican) need to stop griping about big government when they hand out more pork than anyone. Just because it doesn't make an appearance on the "Official" budget doesn't mean it's not our money. If they really meant their lip service as more than a special service to their more moneyed contributors (See above prostitution rant) they'd root out pork barrel politics.
Dems are no saints either and I don't mean to give the impression of side taking when nearly every last one of these 'civil servants' is part of the problem. We have quite literally, to re-use my earlier metaphor, put the fox in charge of the hen house. Remember, they get to vote their own pay raises... That's probably the smallest conflict of interest going on in their these days...
Thank you, commonsensedude, for increasing the debt and deficit to pay for that extra money.
and of course any of the debt the government runs is sombody elses money.
Keeping our own money? Without cuts in spending, we're not "keeping" it, only deferring our payment, as the government borrows more to make up for the shortfall.
Commomnsensedude gets it, I imagine.
The tax cuts are short term gain for long term pain. Here's a look at the mess that Washington is leaving behind for our children and grandchildren:
http://viableopposition.blogspot.com/2010/12/united-states-deficit-is-us-too-big-to.html
Unfortunately, irresponsible spending seems to be something that both Parties can agree on.
Please stop using the phrase "Social Security payroll tax cut for all workers." It is simply not true. There are millions of federal and state employees who do not pay into social security (and thus do not take anything out of social security, either) -- people like teacher, clerks, etc. We are losing the "Making Work Pay" tax credit next year, and do NOT benefit from the payroll tax holiday, so my taxes are actually going up, even though our income level is certainly not in the "rich" category. The "updated" calculator that is linked to doesn't even take this into account.
I can tell you for certain that teachers do, in fact, pay into the social security ponzi scheme.
They do not pay into nor can they claim their spousal social security after a spouse is deceased. You are quite mistaken for several states. I am a retired teacher and did not pay into nor will I collect the social security for my husband when he is deceased although if I was a non working spouse I could.
You had better hope that your teachers union keeps your retirement money fund solvent, and don't expect the government to bail it out like the other unions want.You want a union and union bosses, you better hope they do their job, and not fund Democrats for president hoping they will bail out their broke pension plans.
sandra, I was not speaking for "all states" I was speaking for my state, and I I made the statement in response to the individual who made the claim that "teachers do not pay into social security". This statement is false. If it was accurate, then my wife must have a huge refund coming to her. She's a public school teacher and has been paying into it for 15 years.
Bill - the teacher's union in our state (NJ) has been doing it's part to keep the retirement fund solvent. however, the state government, who employs my wife, has not been living up to it's fiscal responsibility in that regard. The state has not made a payment to the pension fund in over 10 years. When the fund finally does go broke, as it surely will, it will not be the fault of the teachers union, but of the state government who renigged on it's obligation. However, politicians have a shrewd way of deflecting that reality, placing undue blame on "evil unions" while refusing to point the finger where it belongs - in the mirror.
I just got a dollar the old fashion way, I expended a part of my life earning it.
Quick - tell me who "qualifies" for half of it.
I certainly don't want them to have to wait for their "share".
I hate to tell you this "left out" but your info is completely wrong - all federal employees pay into Social Security - even teachers, congresspeople, etc. Stop getting your info from chain emails and do some research!!
Here - helped you out with some good old fashioned research:
http://www.ssa.gov/history/hfaq.html
Mom.of.3 -- No need to be insulting, especially since I'm a researcher! I obviously don't get my research from email. I work for a state university, and pay nothing into social security, because the state of Ohio opted out of social security when it was first instituted (for certain employees). I pay into a pension plan, and will receive no social security when I retire. Note that I didn't say *all* federal and state workers. It depends on which state, federal, or local employer you work for. Many federal workers have been gradually migrated to social security -- it's a complicated issue. There's a good summary of the issues in the New York Times (somewhat more reliable than chain emails!): http://www.nytimes.com/2010/12/09/business/economy/09tax.html?_r=2&scp=1&sq=public%20employees%20tax%20cut%20bill%20payroll%20tax&st=cse
Mom.of.3 -- Get your facts straight. I am a teacher and I DO NOT pay into Social Security.
All federal workers hired since 1983 pay into social security. Federal workers hired before then do not.
"...I am a teacher and I DO NOT pay into Social Security."
then I certainly hope you won't be collecting benefits either.
I work for the state government in Texas -- I'll say that again: the State of TEXAS -- and I pay social security. Let's all accept that different parts of the government work...you guessed it...DIFFERENTLY!
Mom of 3 you are wrong - State employees pay into a public employees retirement account. Which is run by those whom contribute. Who in the world is getting their information from emails -- where is your research from?
When they retire they do not get Social Security because they did not pay into it- they get benefits from the 'PERS' according to the rules of the plan.
Mary, it probably depends on the state. I'm a state employee, I'd rather not say which state. But I just checked my paycheck, and I do pay into Social Security and into Medicare. I also pay into PERS. So I expect to get income from Social Security and medical coverage through Medicare (at least as long as those programs last). And I have a greater expectation of getting income from PERS.
Please post which state exempts its employees from Soc. Sec. I do not know of any. Federal and state employees may have separate pension plans, but every one I'm familiar with also deducts SS from worker's pay.
From the posts by "One of the left-out middle class getting a tax hike" and "Mary in Ohio", it appears that Ohio is one such state. I wonder if maybe they're the only state. I'm sure glad my state doesn't do that. I'd rather pay in now for some retirement pay later.
In a spin driven effort to appear effective, President Obama’s tax cuts bring into stark relief, once again, the Laws of Unintended Consequences. Once he signed the legislation, its success or failure rests on his shoulders. Educators in California will realize a tax increase, come January 2011, due to the elimination of the "Making Work Pay" tax credit. In the state of California, educators and administrators are manipulated by the prevailing HR personnel’s preferences for either CalPERS (California Public Employees Retirement System) or CalSTRS (California State Teachers Retirement System). These preferences differ among the educational institutions; resulting in a chaotic stuttering, when attempting to coalesce these systems with Federal policy.
(Educators and Social Security, California Teachers Association web site http://www.ctainvest.org)
Simply: I work. I EARN money. People in government entities decide how much to take from me, are nasty about collecting it, and then decide who is ENTITLED to the money they took. (Getting the right people in government entities is imperative.)
All teachers do NOT pay into social security--unless their district participates in the social security deductions. The TX teacher retirement system requires teachers to pay into it--no choice. If a teacher has paid into the social security system via another job, and utilizes teacher retirement system retirement benefits, they will be very fortunate to receive any social security benefits. Also, teachers do NOT qualify for spousal social security benefits.
One of my employees is 19. She has a baby, that is on Medicaid, food stamps and wic. She earns $12 hr. Payts ZERO taxes.
She is getting $4000 in unearned income tax refund. HOW? I paid for a baby, day care, housing. She smokes $10 a day in cigs.
Time for fair tax. Whats up with the unearned income credit???
Your complaining because she is working?!!! (most people complain because they don't work) If she qualifies for "Earned Income Credit" (not unearned because you have to work to get it) it is because she is making close to poverty level income. If you don't want her to qualify for this tax break, perhaps you should PAY HER MORE!
If this woman makes $12/hr on a full time job, that is $480/week, or $24,960/yr. Assuming she is single and qualifies for the head of household standard deduction (8,350), plus two personal exemptions (7,300), she can deduct this total amount of 15,650 from her gross income to get a taxable income of 9,310. The tax on this is 933, the earned income credit of 1,696 wipes that out. Now if you are jealous of her (I am not), why not tade places, I'll bet she'll go for that. Or, you can double her pay, and I guarantee you that she will then start paying taxes. I am not justifying everything she has done in her life, she certainly could have made better decisions, I'm only saying that she is not exactly on easy street thanks to the tax code, just getting by and surviving.
"She is getting $4000 in unearned income tax refund. HOW? I paid for a baby, day care, housing. She smokes $10 a day in cigs."
There is no such thing as the "unearned income tax refund". You are confusing this with the earned income credit, which was created in the 90's to get people off of the welfare roles by inducing them to get jobs, and it was successful in that goal (I do have some problems with this credit, but it's too much to discuss here).
Now, if she is making $12/hr, and works full time, her income should be 24,960/yr. As er the earned income tables for a single person with 1 child, her credit is 1,696, not 4,000. If you paid for what yo said you did, you should be getting a tax benefit in terms of deductions for your company for that. Finally, her smioking, not to justify it, is not part of the issue here.
I'd also like to add, she wouldn't need "medicaid" if her employer provided health insurance!
Many employers offer health insurance but often if the employee has to pay any or all of the premium they can opt out and still get medicaid.
She appears to be well above the poverty level of $14,570 for two so to be getting medicaid, food stamps and WIC I would almost bet she has not reported to all the authorities her income. Unfortunately, they don't coordinate very well and her eligibility is probably based on either no income or a much lower income level.
How does she "not report all her income"? Last I checked, the employer files with the IRS the amount of money that he pays her... Unless her employer is paying her "under the table." The Tax Return needs to match the W-2, and you need to prove your income to the welfare department (they don't just take your word).
Everyone seems to be missing a central point, here.
The .gov not only prints the money, they(congress) have the "right" tax us for ALL of it and only return a small amount, if any, to us. It's most definitely NOT OURS personally. It belongs to the United States Government.
No, I don't like that idea, either but it's quite true. Congress has the "right" to raise and levy taxes. There's nothing there that says how far they can go. There's nothing that says the money you are paid is yours alone. Yes, keep fighting for every dime of your worth and earnings, just bear in mind that it's not an activity that has a realistic "end", other than moving away(to some other less-than-ideal situation) or as is said "death".
I wish every one of you a happy and healthy new year!
Yoshi
Mom of 3 - You owe an apology for the insults and mainly b/c YOU ARE WRONG! My wife and daughter inlaw are teachers and do NOT have SS deductions so will NOT get a reduction in 2011. Don't be so cock sure in the future (or YOU do your research before posting.)
Andrew,
Both parties do the exact same thing? That's bull! The GOP refused, en masse, to go along with the tax plan unless tax cuts were extended to the wealthiest, with their bull@!$%# argument that prosperity would trickle down the wealthy's legs and create jobs.
The President and virtually the entire Democratic Congress wanted to sunset the Bush tax cuts.
They ain't all the same. Some are a lot worse, like the GOT party.
The correct term for the credit your employee is getting on her taxes is the Earned Income Credit (EIC), not the unearned income credit. The EIC is a refundable credit allowed on earned income of low wage employees with dependents. If that employee is truly an employee and not working as contract labor, both social security and medicare is required to be withheld from her gross income unless she/he is a federal employee. Depending on her form W-4 computation, little or no federal and state income tax may be withheld from her/his salary.
I like the un-Earned Income Credit.
I have a simple way to pay for this "debt", as you Liberals put it. Let's assume that there is fraud, waste, and/or abuse at every agency and level of the Federal Government. Because there is.
Now let's use a simple example, such as CMS. They found in 2008 that they had a waste rate at approximately 29%. See the quote from a Washington Post article below:
"The report by Inspector General Daniel R. Levinson at the Department of Health and Human Services found an 'error rate' of almost 29 percent in a sample of claims paid in 2006 under Medicare's multibillion-dollar durable medical equipment program."
That means there is 1/3 of the Federal Budget that we can affect immediately. That's almost $400 Billion this year alone! All Congress has to do is a direct 1/3 cut of all budgets, without any changes to policy or law, and allow the agencies and directors to sort out their own fraud and inefficiency.
That more than pays for the supposed cuts, right Libs? How about instead of whining about our debts, and then using worthless emotion to beg for more social programs, we really strike at teh heart of our problems and cut spending?
If there was an error on 29% of the billing that does not mean that they paid out 29% more than necessary. It means there were errors on 29% of the bills. You know mistakes. Like the corporation make each month when they send me my bills. $.29 or $1.17 just hoping I will pay it, those kind of mistakes.
If we really wanted less taxes we would cut out corporate welfare, cut back on defense, stop the war on drugs, stop incarcerating people for minor crime and go to a single payor health care.
Exxon Mobile make $5,000,000,000 in 2009. They did not pay one cent of income tax. They used our infrastructure to the max. The could not have supertankers cruising the seas or pipelines that our secure without you and I paying for it.The barges use our rivers. The refineries pollute our air and use our fire departments for safety. The excutive fly out of airports you and I subsidize. The welfare lady is not the problem. The probleim is the Big numbers
If you pay it, the corps do not like to give it back. I cayght sprint doing it repeatedly by addin gtext charges to a phone I had sprint block text access from. After the second time, I mentioned the Feds seeing this kind of false charging and, voila, they were crediting me $5.
Everyone needs to look more closely at their bills/charges. As Serf said, they are banking that you don't.
Peace
Crashemt, I am not a 'lib' as you put it, I am a conservative. You are giving us conservatives a bad name with such a poorly constructed arguement. Just because there was a 29% error rate in a specific type of Medicare claim, does not mean it can automatically be extrapolated to the entire federal government. I agree there is waste and fraud at all levels, but I don't think you can assume it is 1/3 of the entire budget based on that statistic.
I am not rich by any means, but I am disgusted by how much I am taxed, not only at the federal level, but the state, county, city, etc. I hardly have an incentive to work harder. If I was rich, I would probably move out of the country. I don't know why the left thinks it is okay to tax the crap out of the rich. In most cases they have worked extremely hard for their money.
Big corporations are not your friend. They are your masters, by design. And we allow them to be when we do not pay attention or accept the product and services as 'necessary'. And false add-on charges are just an added insult to injury. And finding the false charges before paying is one way to stop them.
If you pay it, the corps do not like to give it back. I caught sprint doing it repeatedly by adding text charges to a phone I had sprint block text access from. After the second time, I mentioned the Feds seeing this kind of false charging and, voila, they were crediting me $5. Which doesn't really pay for the time to argue w/ them for half an hour. Everyone needs to look more closely at their bills/charges and challenge discrepancies.
As Serf said, they are banking that you don't.
modacto7, you will get medicare because you are paying into that fund. You are not paying into Social Security and will not get income from it. You better check your facts before you are sorely disappointed.
The poor ole Unions will likely go broke! Yeah right! How about a nice pension and retired at 50 like most of the employees in many states now bankrupt. Lets face it any money saved will end up paying for another prision to be built so we can house more gangstas and drug addicts.