Social Security Gotcha
 

Just got the email from the company about the little gem Congress buried in the 2% payroll tax cut extension. Seems those of us with a little senority who are doing well will have to pay a 2% income surtax in 2013 on any money above the threshold that was earned in January and February of this year. So, bottom line, better tuck that 2% "pay raise" away because they are coming after it next year. Did anybody know about this?

here's another question....

Say assuming the rate goes back to 6.2% in March thatyou still end up max'ing out Social Security so you paid $6826.2 for the year (I believe they changed the with-holding RATE from 6.2 to 4.2% in Jan-Feb but never altered the maximum with-holding AMOUNT for 2012), do you still have to pay EVEN MORE and give them the 2% you earned in Jan-Feb?

I think there was a cap mentioned in the email. So it looks like if the rate does go back to 6.2%, you won't get double billed. Anyway you slice it, there is no payroll tax cut for the majority of FedEx pilots. You are going to pay either 4.2% or 6.2% beginning in March until you hit the cap ($110,100) for this year and then you will pay a 2% surtax on the money you earned in Jan. and Feb. My bet is that if they extend the tax cut, the surcharge will stay on all money earned up to the cap. You will pay $6826 one way or the other. I guess the silver lining is you get to use their money for a year until they make you pay it back. Looks like lots and lots of trips to Goodwill this year!!

87% of 2008 ALPAPAC money supported politicians who support this. Wait till they go after the $110K cap.

I am so glad we have a "Labor Friendly" administration in power.

Actually my read on this is that they did go after the cap for two months. If you make more than two months worth of the cap, then THAT money will be taxed at 2%, anything under the cap will be taxed at 4.2%. Doing it for only two months confuses the issue which is probably why they did it. If it becomes this way for the year, then look what happens. If you do the math, someone making 110,000/year payed 6.2% before (paying 6820 in social security tax). Now they pay 4.2% or $4620 ....an $1800 decrease. If you make 110,001, then the first $110,000 is payed at 4.2% and the last dollar is payed at 2%. So you pay $4620.02.

If you make $200,000 a year (the magical number for being "rich" according to the Marxist in Chief) then you will pay 4.2% on everything under $110,000 and 2% on everything over.....so the extra $90,000 above the "cap" is taxed at 2% for an increase of .....wait on it....wait on it....$1800.

So if you make exactly $200.000 you will pay 6.2%......which is an increase of 2% over the "Holiday".....Anything over that is a huge increase as that income not previously available to tax is now taxed at 2%. Which is probably why the psuedo limit (more a dividing line) is now at $110,000. It has been going up every year. This is just a device so Obama can keep his promise of not raising taxes on those making under $200,000.

Like I said, it is no longer a limit, just a dividing line. If this becomes permanent, If you make $500,000 a year, you will pay $4620 on the first $110,000 and $7800 on the next $390,000 for a grand total of $12420 in social security tax which is almost a whopping 87% net increase in social security taxes paid from before the holiday when you were "Maxed out at $6820".

They went after the limit with this....they did it for two months to confuse the issue because the cowards in the Senate and the House did not want to admit what they did. They went for a temporary fix.....now the easiest thing to do is extend it indefinitely. As a side note, the dividing line for the 99th percentile of earned income for a single earner in the US is right at about the $200,000 mark. This is exactly why you are seeing all this emphasis about the 99% these days.

This does nothing except fuel class warfare as if someone making over $200,000 is the top 1%, then there is no way the additional taxes will help pay for any "Shortfall"


:(

Mod Note:

My husband went to the doctor several years ago and was told he is "borderline pre-diabetic." So he's not a full blown diabetic, only pre-diabetic, and only borderline.

Relevance, counsel?

Well, this thread is borderline, pre-TOS violation of political discussions. It's so close my eyes are just starting to water.

Well Vags, if the limit wasn't ok, then it wouldn't be the limit :D

I'm just talking about how it affects my paycheck issued from my company the next two months. That's not politics, that's mathematics.
:D

I will refrain from anymore editorial comments about the constitution of the congresspeople's constituents.

Regards,

Jakal

"...according to the Marxist in Chief..."


That's not politics? Huh?

Seems like a statement of fact to me.;)