So, according to this payroll tax holiday thing, I’m expected to net around $75 more a month on my monthly paycheck by contributing less to my future retirement in social security (or to my parents’ payouts in a few years).
This means I lose the “Making Work Pay” tax credit, which was $400 off my normal income tax bill. This year, thanks to that credit, I got $288 back from the IRS. Had I not gotten that credit, I’d owe them $122. So in order to cover the shortfall for next year, I need to withhold about an extra $20 per month in Federal taxes (just to ensure I’ll have a very small refund next year). So I’m trying to figure out which is better.
Netting about $50 extra a month results in about $600 a year in added pay. That’s more than what I’d get back from a refund, definitely, but $50 a month isn’t much these days. It’s food, or gas. It helps, but it’s merely a token gesture. It won’t buy me a new car or dig me out of the same wall of debt that middle class people have, like student loans or a credit card. Alas.