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Friday, January 15, 2010

Attention!! Examine Your Paycheck: Did The IRS Just Rake More Off The Top?

CINCINNATI (TDB) -- Paychecks subject to the federal income tax seem to be shaved by new withholding rates that took effect this month. A $50,000 plus salary gives about about 2% more in weekly withholding to the government, even though the IRS said last year that most Americans would see less taken off the top. Many are scratching their heads. The Bellwether's friends and colleagues are noticing amounts from $5 to $35 -- and everything in between -- missing on 2010 paydays. Tabular matter on the paychecks shows the money has gone to the IRS, making the takehome net less not more.

What's up? The Internal Revenue Service adopted new tax tables last year that imposed minimal increases in federal withholding in 2010. Payroll and human resources offices imposed the change on Jan. 1. But a lot of people who receive salaries for wages never got the word. Aaron Johnson at Automatic Payroll Systems Inc. noted last week that "employee take home pay will decrease . . ."

Johnson created a chart showing how much the withholding increase is by percentage in some wage brackets for single and married taxpayers:

  • Salary and % Withholding Increase
    $18,000 annual 7% single, 100% married.
    $22,000 annual 5% single, 33% married.
    $26,000 annual 4% single, 18% married.
    $30,000 annual 3% single, 12% married.
    $40,000 annual 2.5% single, 6% married.
    $50,000 annual 1.7% maried, 4% single.

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