Political  Calculations
Ready for Take 2 on how much of your paycheck you will be allowed to take home in 2013?

Here's the deal. Late on 31 December 2012, the IRS kicked out an advance release of its withholding income tax rates that will apply in 2013, giving U.S. employers until 15 February 2013 to implement them, so our Your Paycheck in 2013, Part 1 tool may still apply until that time, which is something that will depend upon how quickly your employer is able to revise their payroll accounting systems to coincide with the information the IRS cranked out.

The good news is that the bracket creep issue we previously noted in Part 1 has gone away - the personal and withholding allowances have been adjusted for the inflation that occurred from 2011 to 2012. The bad news is that the withholding income tax rates issued by the IRS in its Notice 1036 appear to be based upon the income tax rates that applied before 2001 and 2003, which means that they don't take the tax rates just set by the fiscal cliff deal just passed by the U.S. Congress into account.

So there will almost certainly be a Part 3 edition of our 2013 paycheck tool. In the meantime, the Part 2 edition of our tool will estimate how much of your paycheck you'll actually be allowed to take home before the IRS issues yet another set of new tax withholding instructions to U.S. employers, and also before any state income tax withholding that might affect it is factored into the calculations (unless you live in the states of Alaska, Florida, Nevada, New Hampshire, Tennessee, Texas, Washington or Wyoming, where our tool will give you a pretty good estimate of how much of your paycheck that you will be allowed to keep.)

You can get out tool for calculating your own paycheck here.

Political Calculations

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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