The tax cut has made a huge difference in the lives of millions of middle-income families who have received an average of $80 in additional savings each month. But with the tax cut set to expire at the end of the year, Americans must now explore ways to make up for the loss in savings.
Social Security Payroll Tax Cut to ExpireAmerican workers have benefited for nearly two years from a temporary payroll tax cut. The reduction, which was associated with Social Security payroll taxes, allowed workers to pay only 4.2 percent instead of the standard 6.2 percent.
The benefits of this tax cut have been substantial to middle-income families. On average, someone earning around $50,000 saved up to $1,000 in taxes in 2011 and 2012.
Some argue that payroll tax cut, which took the place of the Making Work Pay tax credit offered in 2009 and 2010, should be extended for at least another year. And if they can’t be extended, an alternative measure providing a similar benefit should be approved to offset stagnant wages and ongoing high unemployment rates.
But with the payroll tax cut bringing along a price tag of nearly $120 billion, extending the cuts for another year seems to be a battle neither the Republicans nor the Democrats want to fight.
Ways to Pad Your Savings AccountWith the payroll tax cut set to expire in a few short months, it’s important that you find additional ways to pad your savings account. Lucky for you, Go Banking Rates has a few tips to help you do just that.
Here is a roundup of great ways to keep funds in your savings account:
- 31 Easy Ways to Save an Extra $3,000: Not only can you save $1,000 annually despite possibly losing the payroll tax cut in 2013, but this article offers 31 easy ways that you can save $3,000 within the year.
- Complete Guide to Saving Money on Groceries: If you need to cut corners on your grocery bill each month, this is a great article to help you get organized and save plenty.
- How to Afford the 3 Biggest Expenses for Middle-Income Americans: Are you trying to manage one or more of the big three in expenses: auto loans, health insurance, or student loan debt? This article offers actionable ways to afford and manage these household costs.
- One of the Easiest Ways to Save Money: Pay Yourself First: If you are having a difficult time holding on to your income, this article will teach you one of the best tricks for saving money: paying yourself first.