Currently, those of us who have income from earnings are experiencing a tax holiday. At the beginning of January 2011, Congress decided to grant us a tax holiday by reducing the FICA/Social Security tax rate from 6.2% down to 4.2%. It was to last just one year, but last year Congress extended it for another year. As it stands now, the rate will go back up to 6.2% on January 2013.
If you were unaware of this change it would be a good idea to look at your pay stub and determine the amount of tax you are paying now. Then calculate how much that amount will be with the increase. It is always better to know what to expect. Right?
We are using our extra payroll savings we have now to pay down our truck. You could consider saving this money as a way to get used to the new amount.