How much money will you really take home from your paycheck in 2012?
To find out, we've created the tool here so you can run the numbers that matter the most for you!
In addition to finding out how much money Uncle Sam will be taking straight out of your paycheck for income tax withholding and FICA (which we've broken down into your Social Security and Medicare tax components), our tool will also work in your 401(k) or 403(b) retirement plan contributions, as well as the effect of any flexible spending account arrangements you may have set up through your employer.
Better yet, our tool will also let you see how you take home pay might change if you earn a raise during the year!
Just enter the indicated data into our tool, and we'll run your numbers for 2012, or at least your numbers through February 2012, depending upon what happens with that temporary Social Security payroll tax cut. If and when that changes, we'll post a new version of the tool!
The when you are done with that...
You can check how does your paycheck compare to what it would have looked like in 2010, the last year before the Social Security payroll tax cut? And for that matter, when both Single and Married tax filers had lower federal income tax withholding rates in place as well? Did you really get the benefit of that full 2.0% reduction of your income more in your pocket? Our results table below shows how you take-home pay would have been....
As for why President Obama's promise of a 2.0% payroll tax cut really doesn't add up to 2.0% of your salary or wage income, see the charts here (if you file as Single) and here (if you file as Married), for the explanation of those tax withholding dynamics....
And remember, one of the consequences of not putting that extra 2.0% of your paycheck into Social Security is that the program will run more deeply in the red, which will force the government to have to borrow more money just to pay benefits to today's Social Security recipients.
Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.
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