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The Lowdown on Taxes

There’s probably a way to say this that softens the blow but we’re all adults, so here’s the short version: taxes are going up.

The hike that affects most employees is a 2 percent increase in the amount individuals contribute for social security. The rate returns to 6.2 percent starting this month. Last year’s lower rate was a temporary measure enacted by Congress to help stimulate spending.

Also, social security taxes will now be paid on the first $113,700 of income, up from $110,100 last year.

If you make over $200,000 a year, you’ll also pay an additional 0.9 percent for Medicare. People earning less than that will continue to pay 1.45 percent.

Income tax rates will stay the same for individuals earning less than $400,000 and couples earning less than $450,000. Higher earners won’t know the exact amount they owe until the IRS publishes the tax tables for 2013. Until then, payroll will use the 2012 tables.

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