Did You Notice Your Paycheck Was Less This Week?

2013 IRS Income Tax Withholding Schedule from 4NannyTaxes.com

The Internal Revenue Service issued new 2013 income tax withholding schedules yesterday and they are fully integrated with our online tax calculator now. We are fielding a lot of inquiries about new paycheck amounts and will try to address the common questions here:

Q. Why did my nanny paycheck go down $25 this week?

A. The temporary “Payroll Tax Holiday” expired on December 31, 2012. This was a temporary economic stimulus measure. As a result, every worker (nannies, housekeepers, teachers, computer programmers, everyone!) has an additional 2% being deducted from 2013 paychecks.

Q. Is my employer getting a break then?

A. NO. Your employer never experienced any tax holiday, they have paid the full 6.2% employer contribution all along. Smaller employee net paychecks don’t change your employer’s expenses at all and they are legally obligated to begin collecting at these new tax rates for all 2013 payroll.

Q. My paycheck today covers the last week of December. Shouldn’t that be at the lower rate?

A. No, unfortunately income is taxed when received, not when earned. This means that two years ago when the taxes went down temporarily your last week of 2010 was taxed at the lower 2011 rate too!

Click here to check out all of the information at 4nannytaxes.com

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