Can you believe it 51 million will take home less not more after Year 2011 tax cut?
NEW YORK (CNNMoney.com) -- Despite a sweeping tax cut deal that is supposed to keep everyone whole financially, if not better off, 51 million households will face a higher tax bill or a lower refund compared with this year.
The main culprit: a new payroll tax break that will not be as generous for many low- and middle-income households as the tax cut it is replacing.
Here's why they won't get as much tax relief in 2011: Making Work Pay was worth $400 for individuals making $75,000 or less or $800 per couple making $150,000 or less.
To get that much under the payroll tax break, one will need to earn at least $20,000 ($40,000 for couples). That's because the payroll tax break will amount to 2% of a worker's pay.
Source: http://money.cnn.com/2010/12/15/news/economy/payroll_tax_holiday/index.htm
By Jeanne Sahadi
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- Year 2011 Federal Tax Tables
http://www.halfpricesoft.com/Federal_income_tax_2011.asp
- FAQs on Year 2011 Tax Cut
http://www.halfpricesoft.com/business-blog/post/2010/12/30/QA-on-Year-2011-Payroll-Tax-Cut.aspx