Regardless of how Congress acts, Americans will see a drastic increase in tax withholding, causing a decrease in take-home pay.
Scottsdale, AZ (PRWEB) November 15, 2012
To display the potential increase in the amount of federal tax that will come out of paychecks starting January 1st, Symmetry Software, the company behind the popular PaycheckCity® website, has created an interactive fiscal cliff payroll graph where one can compare pre- and post-fiscal cliff tax amounts for annual income levels ranging from $5,000 to $300,000. Simply visit PaycheckCity® and click on the "learn more" link on the fiscal cliff ahead image to access the interactive graph.
The fiscal cliff is a collection of Federal tax and spending changes that will affect the tax liability of nearly every single one of the 160 million wage earners in America. In payroll, potential increases in withholding percentages and the number of allowances claimed for your tax situation will directly affect an individual's take-home pay. Tom Reahard, founder and CEO of Symmetry Software states that, “Regardless of how Congress acts, Americans will see a drastic increase in tax withholding, causing a decrease in take-home pay.”
Here's how the graph works: To see the potential increase in the amount of federal tax that will come out of a paycheck, select a filing status from the Form W-4 (single or married,) and the number of federal allowances claimed. Hover the mouse over the bar that corresponds to the approximate income level. Check the summary window to see the estimated impact the fiscal cliff could possibly have on the amount of federal taxes withheld from a paycheck. For a single individual claiming one federal allowance, with an annual income of $75,000, the graph shows that she currently pays $17,505.50 in federal tax deducted from her paycheck. Should the federal tax and spending changes revert back to the pre-Bush federal calculations from 2001, she will pay $22,448.50, a difference of $2,943, representing a 16.81% increase. For a married one-percenter making $275,000 a year and claiming four deductions, the current tax is approximately $69,273.90. Reverting back to 2001's rates would create a $8,562 increase for a post-cliff tax of $77,835, or a 12% increase.
Reahard offers the following advice on using Symmetry's online tax graph:
1. The analysis on PaycheckCity® offers an estimate of what adjustments in payroll withholding could look like. The term fiscal cliff refers to significant federal income tax code that is set to expire on December 31st, 2012. The payroll-related taxes seen on PaycheckCity® are one small portion of the fuller fiscal cliff picture.
2. The number of allowances both single and married individuals will be able to claim on the form W-4 may be impacted by the fiscal cliff because certain deductions may be removed or reduced as tax breaks and phase-outs expire.
3. We encourage Americans to work with their tax advisers and monitor the fiscal cliff news closely to determine personal impact.
4. Check back at PaycheckCity® in 2013 once the new tax rates are released, to use the most up-to-date paycheck modeling calculators, which will include the new withholding rates for 2013 once Congress enacts new laws for the new year.
5. Again, the calculations shown currently are only estimations based on general assumptions from regularly revised government data. The exact tax owed may be more or less than shown, based on tax deductions one qualifies for or any other specific issues relative to a personal tax situation.
For additional information on Symmetry Software's payroll-withholding tools, visit http://www.symmetry.com
About Symmetry Software
Founded in 1984, Symmetry Software specializes in payroll and payroll-related withholding tax software applications for the Internet and corporate intranets. Based in Scottsdale, Arizona, Symmetry runs four payroll-related Web sites:
- PaycheckCity.com: Offers employees self-service tools for paycheck management including free personal finance calculators. Individuals can model "what-if" scenarios using wages and other paycheck figures to determine the impact on take-home pay.
- StateW4.com: Online form-preparation process for federal, state, and local withholding forms.
- Payroll-Taxes.com: A payroll research library for industry professionals, including free paycheck calculators and a paycheck community message board.
- Payroll-Point.com: The latest mapping technologies help deliver appropriate tax withholding settings based on the home and work addresses of an employee.