Smaller Paychecks, thanks to the Fiscal Cliff Deal - CBS4 - WHBF Quad Cities, IL-IA News Weather Sports

Smaller Paychecks, thanks to the Fiscal Cliff Deal

By: Christine Souders

csouders@cbs4qc.com

Guess what? Your next paycheck will be smaller thanks to the "fiscal cliff" deal.  The deal did not include extending the payroll tax holiday. meaning workers are going to pay two percent more to help pay for social security.

When you look at your pay stub, look closely at your net pay, it's going to be less.  Steve Roling is a Certified Public Accountant.  He crunched the numbers to show exactly how much more you can expect to come out of your wages, "This is a payroll tax increase.  So the social security is going to go from 4.2% up to 6.2%, basically costing everybody $2 dollars on every 100."

We asked Quad Citians what they think about lawmakers' decision not to renew the payroll tax holiday which took effect in 2011.

"I'm not happy about it. I feel like we are overspending and I don't feel like we should have to pay for excessive spending," said Gale Carrutheus of Bettendorf.

"It is kind of distressing to know that I'll be taking home a little bit less a month," said Kevin Breckenfelder of Davenport.

Roling said 2 percent might not sound like a lot, but it will add up, "Essentially we're looking at people cutting back to the tune of 10 to 20 dollars per paycheck.  It's going have to come out of their spending because it's not going to increase their refund at the end of the year."

And folks we talked to said they have mixed feelings about the tax hike.

"People will just have to cut corners, and I don't know what they'll do to cut corners," said Carrutheus.

"Social security is likely to run out before people like me can take advantage of it, but at the same time, it is a very relevant need and I think the funds are being appropriately allocated," said Breckenfelder.

Roling saID the payroll tax won't affect how much you get back on your tax returns, because they're mostly based on your gross income.