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Decision on extending Bush-era tax cuts could affect paychecks

Posted October 29, 2010
Updated October 31, 2010

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— For those who have been laid off, they know what it's like to not have much, if any, disposable income. Now, taxpayers might have to tighten their belts even more.

Tax cuts initiated by President George W. Bush are set to expire at the end of December, and Congress has not yet voted on extending them. The IRS will publish its 2011 withholding tables in the next few weeks, likely assuming the cuts will expire. That means an across-the-board tax increase for everyone.

For example, a married couple earning $80,000 a year will have an extra $442 withheld each month, according to The Tax Institute at H&R Block. tax cuts Decision on extending tax cuts could affect paychecks

Even if Congress votes in the next couple of months to keep the cuts, it may take weeks to implement the new tables. That would affect the first few paychecks of the new year. But the current Congress may do nothing, letting the next Congress take up the matter when it convenes in January.

Rich Kirk, who runs Complete Payroll Services in Raleigh, said employers need to warn employees that paychecks will probably be smaller in 2011.

“(You should) hope your employees don't ask for a raise to make up for what the IRS is taking,” he added.

Kirk says people could file new W-4 forms with their employers to claim more dependents and reduce their withholding, but that's a gamble. If Congress does not extend the tax cuts, they would end up owing that money in 2012.

47 Comments

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  • Hatchcover Nov 2, 2010

    This is FOX News bunk! Jesse Helms - WRAL smear right before the elections.

  • dlb800 Nov 1, 2010

    geosol,

    Tax cuts didn't create the deficit. Spending did! Put the blame on where it should be. I don't like Bush either, however, Congress spends the money, therefore, they are the ones who caused the deficit and the national debt.

    How can keeping more money that you earned be a bad thing? Because it should belong to society, and not yourself?

    I don't care about the deficit. Every time this country has had a surplus, Congress finds a way to spend it, so don't kid yourself about letting these tax cuts expire, and the deficit will go away. It won't. Congress needs to have a debt so that they have a reason to tell (people like you), that we need to raise taxes again. The truth is, if they didn't spend too much money, we wouldn't have a deficit, nor a debt.

  • Ipromiseitwonthurt Nov 1, 2010

    Obama said that if my household didn't make $200,000, or was it $250,000 a year then my taxes would not go up. Well I don't even make close to that so this article must be inaccurate. Cause Obama promised us!

  • geosol Oct 29, 2010

    But our little right wing friends want you to forget about helping to reduce the deficit when irresponsible tax cuts have failed to stimulate the economy once again. The wingers only try to use that ruse when they think people can be tricked into thinking that the can reduce the deficit by decreasing revenue. It has never worked before, but they want you to think that somehow, this time, it'll all be different. Never fails.

  • grimreaper Oct 29, 2010

    "$442 withheld each month"

    There goes the minivan payment...but hey, this is about paying for Obamacare not about you. Dems keep saying they will pass something to extend this or that but they did NOTHING to even suggest that. They are again banking on you being a sucker and voting for them on promises they just cannot keep. It may or may not happen. The fact is ALL of Congress must agree and pass the same thing. That is how it works. If the Dems REALLY were going to pass the majority of the tax law permanently they could have done it. NO Republican in there right mind would have voted against anything sensible. But they didn't do anything as it is their ace in the hole. If they succeed in suckering enough people into voting them in they will do nothing. The current tax law will simply expire, they will have voted on NOTHING. Then they will try to pass some new minimal thing they will tout as for the middle class. A complete crock.

  • affirmativediversity Oct 29, 2010

    NEWSFLASH...WRAL just figured out that George Bush really did CUT TAXES and the DEMOCRATS are RAISING THEM.

    Effective January 1, 2011 everyone gets to enjoy an extra helping of Hope and Change...enjoy it because your paying for it, literally!!!!!!

  • fl2nc2ca2md2nc Oct 29, 2010

    Excellent points Milkman, you are absolutely correct, couldn't agree more.

  • pfibrecare Oct 29, 2010

    as long as we the people continue to rely on the gov to provide our every want and need this is the way it is going to be.....the only answer i have is get up and go to work tmw , quit blaming everyone but urself and do something for urself besides complain.....we r over taxed our system should be straight sales tax that way if u got the money to spend pay tax on it ...no loop holes for the rich....no unnesssary hand outs...get up go to work or dont eat....doesnt matter who controlled what... we made our beds....we have made it possible for the most greedy ,narricisstic and psychopathic people to run our gov....we need to wake up get to work....where else could these people make a living ...telling the rest of us what to do and how to live .....for some reason all we do is complain....but words dont change much...

  • Milkman Oct 29, 2010

    Take a peek here: http://en.wikipedia.org/wiki/United_States_public_debt

    When Bush took office in 2000 there was a year to year surplus, but still a cumulative national debt of $5.6T, in 2008 it was $10T, so on Bush's watch it increased about $4.4T in 8 years.

    So, in 2008 it was $10T and total for 2010 estimated is $14.4T, so in 2 years Obama has run up the same amount of debt that it Bush 8 years to do. Last I checked 2 was a lot less than 8.

    Congress makes the budgets it is as much their fault as the President. Who led Congress when Clinton had a surplus (year to year)? Well, it was Newt Gingrich and Dennis Hassert. Here lately, it's been Nancy Pelosi and Harry Reid.

    I think pointing the fingers at only Bush and Obama isn't helpful, there's a lot more politicians who need to share the blame, from both parties. We need a lot more new blood in there.

  • scarletindurham Oct 29, 2010

    "For example, a married couple earning $80,000 a year will have an extra $442 withheld each month."

    WHHHAAAATTT!!!! I really hope this is an exaggeration to get people to the polls.

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