Here's The Only Fiscal Cliff Detail You Really Care About: How Much YOUR Taxes Will Go Up In 2013
While the people most impacted by the deal to avert the fiscal cliff are couples making more than $450,000 per year and individuals making more than $400,000 per year, everyone's taxes are going up nonetheless compared to 2012.
The bill that passed the Senate and the House did not reinstate the payroll tax holiday that has been around for the past two years. So even though income taxes aren't going up for most people, actual take home pay will be going down.
In order to aid the recovery Congress and the White House cut the payroll tax from 6.2 percent for all workers to 4.2 percent for all workers effective 2011.
The deal that was reached did not renew that, so everyone's taxes are going up.
According to the Tax Policy Center, the American Taxpayer Relief Act will mean that the average federal effective tax rate will be 21.7 percent and the average increase is $1,257.
Moreover, all Americans who make less that $500,000 per year will see an increase of 1% to 1.4% in their annual effective tax rate as a result of the payroll tax rise.
Either way, the President did get what he wanted. The effective tax rate of people who make more than $1,000,000 per year should rise by an average of 5.2 percent.
Here's how you figure out how this bill impacts you. On the left, find your income level in thousands.
The column under the red arrow tells you how many more dollars taxpayers in that income bracket can expect to pay as a result of the payroll tax holiday expiration.
The column under the blue arrow shows how much your effective tax rate increased. If that number is less than two points you're not affected by the President's plan to raise taxes on upper income Americans. If that number is less than two for your income bracket, that is just the impact of the payroll tax holiday's scheduled end. The total average rate increase is 1.8 percent.
The column under the green arrow shows the average effective federal tax rate for members of each income bracket. The total average effective federal tax rate is 21.7 percent.
Now See: The 24 Most Unforgettable Moments Of This Year In Politics
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