New Year - lower paycheck

[atlast30]

The only downside of the New Year is the recommencement of paying the social security tax.  I was enjoying the higher paychecks for the past few months because I exceeded the social security wage base.  But, that is over, for now.  How many other people are sad to see Jan. 1 because their paychecks decrease?

[Deleted]

My raise keeps me level, yay me!!! So to me, my "raise" will be visible around Sept/Oct.

[TheHaitian]

Me... Me... Me!!!

-> insurance premiums went up; not looking forward to that.
-> decrease withholding from 5 to 2

Those two combined is about a net of $100/less a week that I will be bringing home started next Thursday!

Here goes "fun money" and second trip or first depending which one we decide to kill!

[Cookies Galore]

Insurance premiums are going up $5 a month. I can deal with $2 less in my take home until raises go into effect in February.

[Deleted]

My paycheck is steady, but January is the month from hell. It is the month that car tags/registration are due. That's controlled by last name. It is also the month that the sixth month insurance comes due. We can only change that by having them send us a paper bill and paying a $10 convenience fee each month for the next three months. Only then will the due date change.   No thanks.

Every January I "know" this is happening, and I have the money in savings.  But I like to cash flow it, anyway.  So it makes January a long month.  Last year we were out of school so much because of weather.  You would think that would help, but I would start and stop the same play over and over (Macbeth).  The month just dragged.

Fortunately, February is short.

[souldoubt]

[TheHaitian]

Jan 1, 2015 11:51:21 GMT -5 Cookies Galore said:

Insurance premiums are going up $5 a month. I can deal with $2 less in my take home until raises go into effect in February.

I hate you ....

I wish mine only went up $5 dollars

[Knee Deep in Water Chloe]

What 
I thought that happened like three years ago? 
The reduction of SS taxes and then reinstating them?
It's happened/happening again?

[Knee Deep in Water Chloe]

Jan 1, 2015 13:23:05 GMT -5 @tbird said:

Jan 1, 2015 13:21:32 GMT -5 Knee Deep in Water Chloe said:

What 
I thought that happened like three years ago? 
The reduction of SS taxes and then reinstating them?
It's happened/happening again?

 I think they make over the threshold of paying ss taxes

Thank you. 

Sigh...I'm so ignorant...off to google. 

[Knee Deep in Water Chloe]

From www.irs.gov/taxtopics/tc751.html

Only the social security tax has a wage base limit. The wage base limit is the maximum wage that is subject to the tax for that year. For earnings in 2014, this base is $117,000.

So, if someone makes >$117K, then anything over $117K is not taxed?

[Deleted]

Jan 1, 2015 13:31:57 GMT -5 Knee Deep in Water Chloe said:

From www.irs.gov/taxtopics/tc751.html

Only the social security tax has a wage base limit. The wage base limit is the maximum wage that is subject to the tax for that year. For earnings in 2014, this base is $117,000.

So, if someone makes >$117K, then anything over $117 is not taxed?

Not for FICA. (Or SS at least?) There is then a corresponding cap on draw from SS.

One way to 'save' SS they has been discussed is getting rid on the income cap.

[Tiny]

Jan 1, 2015 13:42:03 GMT -5 @tbird said:

The same 2011 law that hiked state income tax rates by 67 percent kicked into its built-in second phase Thursday with a partial rollback. Overnight, the tax rate for individuals dropped from 5 percent to 3.75 percent, while for corporations it declined from 7 percent to 5.25 percent.

www.chicagotribune.com/news/local/breaking/ct-illinois-income-tax-rate-falls-met-20141230-story.html

Lower state taxes in Illinois? Is this a sure thing?

Does it start Jan 1?

I think it will drop... at least for a part of 2015. I think our politicians ignored the deadline back in November when they could have re-instated the higher tax amounts - so it will drop.   I suspect this was a way to throw some roadblocks into the mix if Quinn lost the election - which he did.  Rauner    is now faced with potentially having to 'raise' taxes instead of claiming to have lowered taxes.      

[HoneyBBQ]

o/

I always do a happy dance when I pass the month when I get a bigger check.

[Happy prose]

My income goes down. HI goes from $450 per month to $650, and our new contract sucks. 1.25 % raise. 

[ArchietheDragon]

My paychecks will get bigger.  Tax brackets got a little more favorable due to the IRS's inflation adjustment.   I also had been contributing about $1100/month to my HSA at the end of 2014, which I reduced to $420/month for 2015.   

I also can't wait until my wife goes back to work in Sept!  ; )

[ArchietheDragon]

Jan 2, 2015 10:39:28 GMT -5 @tbird said:

Jan 2, 2015 10:23:30 GMT -5 ArchietheDragon said:

My paychecks will get bigger.  Tax brackets got a little more favorable due to the IRS's inflation adjustment.   I also had been contributing about $1100/month to my HSA at the end of 2014, which I reduced to $420/month for 2015.   

I also can't wait until my wife goes back to work in Sept!  ; )

can you explain this? does it apply to everyone?

Yes this applies to everyone.  

The IRS tax brackets move slightly every year so that more of your income is taxed at a lower tax rate in 2015 compared to 2014.  Not a hug amount, but slightly.   Also, the personal exemptions increased and a handful of other deductions and credits increased. 

[Deleted]

Jan 1, 2015 13:31:57 GMT -5 Knee Deep in Water Chloe said:

So, if someone makes >$117K, then anything over $117K is not taxed?

There's no SS tax on the wages over $117K but, as oped pointed out, when your Average Wage for SS benefits is calculated, earnings over the cap are excluded. The Medicare tax is on everything, which means high wage earners are paying tons more for the same coverage as someone who worked 40 quarters at Wal-Mart and then left the workforce.

In the beginning I used the extra take-home pay for car and auto insurance, which always came in around year-end. In later years I funded that in advance and the extra pay mostly went into savings.

[Deleted]

Yeah I hate the beginning of the year.  SS starts back up, 401K starts back up, and medical goes up.  Dh has already called me to ask what is "wrong" with his check. With the statement of "it can't be that big of a difference."

[imawino]

Jan 1, 2015 13:20:11 GMT -5 TheHaitian said:

Jan 1, 2015 11:51:21 GMT -5 Cookies Galore said:

Insurance premiums are going up $5 a month. I can deal with $2 less in my take home until raises go into effect in February.

I hate you ....

I wish mine only went up $5 dollars

My insurance premiums are going down just over $10 per month. 

[gooddecisions]

I switched from a comprehensive family plan to a single high deductible plan, so my premiums go way down- but $3350 will go to the HSA, which is about the difference. I might get a 2% raise if I'm lucky, but won't know until the end of the month. Also, 401K limit increased to 18000, so that's another $500/year. Plus, I enrolled in a prepaid legal plan, so that another $400/year. Since some of these things are pre-tax, I'm too lazy to do the math to know if my paycheck will be less or more than last year. Probably a little less.

[tskeeter]

Jan 1, 2015 13:42:03 GMT -5 @tbird said:

The same 2011 law that hiked state income tax rates by 67 percent kicked into its built-in second phase Thursday with a partial rollback. Overnight, the tax rate for individuals dropped from 5 percent to 3.75 percent, while for corporations it declined from 7 percent to 5.25 percent.

www.chicagotribune.com/news/local/breaking/ct-illinois-income-tax-rate-falls-met-20141230-story.html

Lower state taxes in Illinois? Is this a sure thing?

Does it start Jan 1?

I've lived in IL.  The state that gives with one hand and takes away with the other.

Income taxes might go down, but user fees and the like will probably be increased to offset the lost income tax revenue.

The money to fund government programs has to come from somewhere.  Usually, it's just a question of which pocket it is coming out of.

[Ombud]

Jan 1, 2015 11:30:28 GMT -5 atlast30 said:

The only downside of the New Year is the recommencement of paying the social security tax.

Much higher health insurance for me. I thought that would be over last year, in other words, I thought last year was the big bump up. Apparently I was wrong. It's up 300 a month and I'm single coverage