Does your take-home pay increase because of tax law changes?

If you have received your first 2011 paycheck, you might notice that your tax withholding is different from last year’s, even everything else (salary, exemption, etc) on your paycheck is the same. There are two tax law changes which affect take-home pay:

The first is 2 percentage point “Payroll Tax Cut” for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduction is only for 2011.

The second is the expiration of the “Make Work Pay” credit at the end of 2010. This credit was in effect during year 2009 and 2010. The credit is worth 6.2% of an individual's earned income, with a maximum credit of $400 per person. Married couples who file a joint tax return thus have a maximum credit of $800.

How will these affect your take-home pay? It depends on your annual salary. If you are single and you earn less than $20,000, your take-home pay decreases. For singles who earn more than $20,000 a year, the take-home pay increases. See the two charts below. If both of married couples work, each of them gets 2% payroll tax cut.

The maximum benefit for a single is $2,136 a year. For a couple, it is $4,272.

However, if you don’t pay social security tax (such as many state and local government employees, including teachers), you will not benefit from Payroll Tax Cut. In fact, you will see a decrease in your paycheck due to the expiration of the “Make Work Pay” credit.

If you’re going to benefit from this tax cut, I would suggest you that you put this money into your saving and/or retirment contritbutions.

如果你收到了2011年第一次工资，你可能会注意到，工资单上代扣代缴的税跟以前的不一样，这是因为有两种税法的改变：

第一是2个百分点的“Payroll Tax Cut”，个人社会保障税(social security)扣缴率从6.2减至4.2%。这个减税仅适用于2011年。

第二是 “Make Work Pay” 减税在2010年年底到期。“Make Work Pay” 减税只在2009年和2010年有效。它对每个有工作收入的人免工资的6.2%，最高限额$400 。联合报税的已婚夫妇可以获得$800的减税。

这些如何影响你税后的薪水呢？这取决于你的年薪。如果你是单身，年收入不到2万元，你的税后工资就要下降。如果你的年收入超过2万美元，你的税后工资就会上升。从下面的两个图可以看到工资和减税的关系。如果夫妻双方都工作，他们每个人获得2％的减税。

单身在2011年可以减税$2,136美元。一对夫妇可以减税$4,272。

不过，如果你不缴纳社会保障（如许多联邦和地方政府的雇员，包括教师）税，你就不会受益于薪资减税。实际上，你的税后收入反而因为“Make Work Pay”的到期而减少。

如果你的税后工资上升了，我建议你把钱存起来，或者放到退休账户里。