The fiscal cliff and you

1:15 PM, Jan 4, 2013   |    comments
  • Share
  • Print
  • - A A A +

(NBC NEWS) -- Now that we've avoided going over the fiscal cliff, the question is: What effect will that have on you?

The answer is "quite a lot" even if you don't make $400,000 a year.

For those of you in higher income brackets, you're losing some of your deductions this year, and for families earning more than $450,000 your tax rate is going up to 39.6%.

The big change for everybody is the expiration of the Social Security payroll tax holiday.

Those taxes go up 2-percent.

For a family making the national median of about $50,000 per year that's another thousand dollars in taxes.

"There are a lot of people that the only pay increase they saw in the last two years was that payroll tax holiday. Now, that it's going away, it's going to squeeze consumer buying power," says BankRate.com's Greg McBride.

Investment income will also be taxed at a higher rate, but only for people with higher incomes.

It may take your employer a couple of weeks, but expect new paychecks for 2013 to be noticeably smaller.

Most Watched Videos