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Why is there less money in my paycheck in 2013?

Why is there less money in my paycheck in 2013? Have you noticed it yet? I just noticed it recently, there is less money in my paycheck this year! Have taxes went up for me? Maybe, it depends upon how much you make. Chances are this has nothing to do with there being less money in your paycheck though. Is there less money in my paycheck because Obama was re-elected? Nope, and let’s not get into a political discussion either. With inflation rising, it’s not a good time for this to happen to the American people. I know I like to have extra money in my bank account at the end of every month, things are getting more expensive and it's harder to do this. Back in January of 2010, close to two years ago, the government cut our Social Security tax by 2% from 6.2% down to 4.2%. This tax cut was intended to be a 1 year “economic stimulus”, which was extended in 2012. This tax cut officially expired on December 31, 2012. Employers still had to pay their full portion at 6.2%. If you were self employed and paid both sides of the social security tax it was reduced from 12.4% to 10.4%. This is the reason you’re seeing less money in your paycheck, it should be exactly 2% less.

I need that 2%, what should I do?

Don’t panic is the first thing I would tell you. There are many things you can do. For example, are you always getting a check back from the government at the end of the year? If you are you’re essentially giving the government an interest free loan and I would advise you to increase your withholding amount. However, you must keep in mind if you do this you most likely aren’t going to see a IRS refund check but you’ll have more money now. If that doesn’t work

for you I would advise you to come up with a way to make a secondary income. There are many ways to do this. For example, you could try making money online (ebay, amazon, craigslist, etc.), get a second job, market your skills (elance, odesk, etc.), real estate (get licensed), etc. There are so many ways to build a secondary income and I think one of the easiest ways to do it is to learn a new skill and market yourself.

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Formulate a plan

There are other things you can do to make this transition even easier. If you're financially responsible with your income you can get through anything and overcome a lot of life's obstacles. I have seen it before and lived it as many others have. At the end of every year, you should look at your income and expenses and put together a budget. This will help you in many ways, you can be prepared for unforeseen events (like this one) if you didn’t know about it. Additionally, having financial goals and an annual budget is just good common sense.

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