2% Increase In Paychecks Thanks To Reduction In Social Security Tax

The social security tax will drop from 6.2% to 4.2% for one year which nets you an extra 2% in your paychecks!  Wondering how this will affect your paycheck?

Use this simple calculator from Kiplinger to see how much your paycheck will rise in 2011, thanks to the two percentage point reduction in the Social Security payroll tax. Enter your annual salary & pay frequency to figure out how much you will receive.

New 2011 Tax Brackets

Check out the following tax brackets to see if and how you will be affected.  As always, consult a financial planner before making any significant changes:

SavingToInvest.com Notes the following changes from 2010 to 2011:

The value of each personal and dependent exemption, available to most taxpayers, is $3,700, up $50 from 2010.

Tax-bracket thresholds increased slightly for each filing status as shown in the above table

The new 2011 standard deduction is $11,600 for married couples filing a joint return, up $200, $5,800 for singles and married individuals filing separately, up $100, and $8,500 for heads of household, also up $100.

The additional standard deduction for blind people and senior citizens is $1,150 for married individuals, up $50, and $1,450 for singles and heads of household, also up $50. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.

Here’s a handy calculator from  MyTaxBurden.org that also helps you project your 2011 income taxes based on all the options.

Let us know how these new changes affect you in the comments!