Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
For those that are unaware, your FICA taxes total (on the employee side) 7.65% of your gross compensation, with 6.2% going toward Social Security and 1.45% going toward Medicare. Once the “holiday” kicked in, the Social Security portion was temporarily reduced to 4.2%.
The Social Security portion of this tax, referred to in your pay stub as FICA-OASDI, applies to your first $106,800 in earned income. After that, the Social Security tax drops off, but the Medicare tax remains in place. Given this, the Payroll Tax Holiday is worth up to $2136/year (that’s 2% of $106,800).
With that said… It’s worth noting that this tax break is currently on the chopping block as part of the deficit reduction talks. In truth, this was only a one year break, but once tax cuts are enacted it’s politically difficult to get rid of them, so I fully expected this to continue into the future. Looks like that may not be the case.
What do you think? Should we ditch the Payroll Tax Holiday at the risk of further under-funding our Social Security obligations? Or leave it in place in hopes of spurring consumer spending, and helping to get the economy back on track.
AP via Bargaineering
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (692)
- Dish Network Customer Service SUCKS (534)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (325)
- How Much Should You Pay a Babysitter? (284)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (227)
- Will Mac OS X Lion Kill Quicken 2007? (191)