After Fiscal Cliff Deal, Payroll Taxes to Increase for Most Americans

MACON, Georgia (41NBC/WMGT) – The so-called fiscal cliff has been avoided, so what does it mean for you?

Frankly, your taxes are probably about to go up.

Except for those making $400,000 a year (or couples making $450,000), the rest of us won’t see our income taxes affected at all.

But payroll tax cuts put into place two years ago to boost the economy have now expired, which means:

“Pretty much everyone who paid income tax last year or who had FICA withholdings last year from their paychecks is going to pay more taxes this coming year,” says Dr. Greg George, professor of economics at Macon State College.  “For the average taxpayer, it’ll be about a 2% increase in their FICA withholdings.”

So, if you make $100,000 a year, expect to see more than $150 less every month.

“That’s a pretty sizable chunk if you’re on a tight budget,” says George.  “And a family of four earning $100,000 could be on a tight budget, depending on what their expenses are.  They need to understand that that’s coming around the corner.”

“We’ll have to prioritize everything and find out what we need to have, what we should have, and what we’d like to have,” says John Andrews, a shopper at Target in Macon.  “Some of those things that we like will have to be eliminated.”

So yes, taxes will go up in 2013 for most of us, but it’s not as bad as it could have been.

“I’m not crazy about taxes going up, especially since the way the government spends money,” says another Macon shopper, John Fillmore.  “It seems like they could handle things a little better than what they do, but we’re pretty much powerless over that.”

As part of the deal, sequestration, which would have drastic impacts here in middle Georgia because of Robins Air Force Base, has been delayed.

Two months from now, Congress will meet to debate that issue.

Around the same time, they’ll likely have to do something about the nation’s pending debt ceiling.