TOPEKA, Kan. (WIBW) -- Friday is payday for many Americans, but do not be shocked if paychecks are a little smaller than usual.
The average worker making $50,000 a year will pay an extra $1000 in taxes this year, which amounts to about $20 a paycheck. This change came after Congress decided not to extend the Social Security tax cuts when it passed the fiscal cliff deal.
As a result, American employees might have to reexamine their spending habits.
“I think the most important thing that they can do is understand their finances,” said Megan Jones, financial advisor. “And so if there are ways that you can adjust your budget, understand ways to reduce your expenses like refinancing and other things, and just be aware of your income coming in because your discretionary income is all you have to live on.”
Other options to consider that could help make up for the loss include contributing more to your retirement funds to increase nontaxable income, as well as taking a closer look at your withholdings.
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