Most Georgians Will See Tax Increases in 2013
The fiscal cliff deal reached by Congress didn't address the temporary reduction of the Social Security payroll tax, which expired January 1. For two years, the payroll tax was reduced to 4.2%. This year, it will return to its former rate of 6.2%. Bob Greenberger is a partner with Atlanta-based accounting firm Habif, Arogeti & Wynne. He says most Georgians will feel the difference.
“For the average household, which is roughly $50,000, it’s going to cost them about $1000/year," he says, "And for a married couple, it could cost them a couple thousand. So, it’s significant.”
And, Greenberger says, the IRS hasn’t updated the tax tables yet to reflect the change.
“So if people got paid, say January 1, and they had not changed the tables, when they get their paycheck in February, if the tables are updated, they’re going to catch it up, not only for February but for January as well,” Greenberger explains.
The fiscal cliff deal did extend the R & D tax credit. Greenberger says that could mean millions of dollars in savings for local businesses.