Two percent cut to hit working Americans - KPLC 7 News, Lake Charles, Louisiana

Two percent cut to hit working Americans

Unwelcome news is hitting working Americans as they discover their pay is being cut by two percent.

It's a result of the end of a payroll tax holiday.

Your 2 percent pay loss is Social Security's gain.

To figure out how much it will cost you, multiply by two percent, .02, by your gross income.

Divide that by 12 to get your estimated monthly loss.

So, if you're making a $30,000 salary, expect $50 less a month. If you're making $60,000, $100 less a month and so on.

"Payroll tax holiday, that's going away … that's gone," said Mike Conway, Liberty Tax Service franchise owner.

Conway said the feds lowered the payroll tax rate in 2011 from 6.2 percent to 4.2 percent to allow people to keep more cash in their pockets.

"It was when our economy went to pot two years ago and they tried to come up with ways to stimulate the economy," Conway said.

But now that the economy is recovering and the fiscal cliff is averted, Uncle Sam will get back to collecting.

"A two percent increase in the Social Security and Medicare tax," Conway said.

Wells Fargo's Teresa Morris said to further cushion the blow, craft a budget with streamlined expenses for fuel, utilities, eating out and entertainment.

"We would encourage them to go in and speak to their personal banker and really come up with a plan that works best for them and their family," Morris said.

Another change is for Social Security and federal benefits recipients.

Starting March 1, paper checks will no longer be issued.

You must sign up for direct deposit or a Direct Express Debit Mastercard.

If these steps aren't taken, be ready for an interruption in the payment.

If you need help switching to electronic payments, call the Treasury's Go Direct Line at 1-800-333-1795.

For those of you just learning of the overall 2 percent cut in pay, money experts recommend that you make immediate spending adjustments to your budget.

KPLC's Britney Glaser will have more on this at 6 p.m.

Copyright 2013 KPLC. All rights reserved. WMC-TV, in Memphis, also contributed to this article.

  • More Local NewsNewsMore>>

  • TRAFFIC: Accident on I-10 near mile marker 66

    TRAFFIC: Accident on I-10 near mile marker 66

    Sunday, August 19 2018 9:03 PM EDT2018-08-20 01:03:03 GMT
    Crash on 1-10 near Jennings (Source: google)Crash on 1-10 near Jennings (Source: google)

    A crash is causing traffic on 1-10 next to Jennings near mile marker 67.

    More >>

    A crash is causing traffic on 1-10 next to Jennings near mile marker 67.

    More >>
  • Fire put out at DeRidder Best Western

    Fire put out at DeRidder Best Western

    Sunday, August 19 2018 8:24 PM EDT2018-08-20 00:24:39 GMT
    DeRidder Fire Department puts out Best Western Fire (Source: DFD)DeRidder Fire Department puts out Best Western Fire (Source: DFD)

    Deridder Fire Chief Kenneth Harlow says that the fire department received a call at 5:31 P.M. on August 19, 2018 regarding a fire at a Best Western on North Pine Street. After arriving on scene the fire department was able to safely evacuate everyone from the building. Chief Harlow says that the fire was contained by 7:00 P.M. The fire department believes the fire began in the attic of the drive thru awning near the main office. Copyright 2018 KPLC. All rights reserved.

    More >>

    Deridder Fire Chief Kenneth Harlow says that the fire department received a call at 5:31 P.M. on August 19, 2018 regarding a fire at a Best Western on North Pine Street. After arriving on scene the fire department was able to safely evacuate everyone from the building. Chief Harlow says that the fire was contained by 7:00 P.M. The fire department believes the fire began in the attic of the drive thru awning near the main office. Copyright 2018 KPLC. All rights reserved.

    More >>
  • Iowa hosted 10th annual Arts & Crafts Festival

    Iowa hosted 10th annual Arts & Crafts Festival

    Sunday, August 19 2018 5:45 PM EDT2018-08-19 21:45:00 GMT

    The town of Iowa celebrated it's 10th annual Arts and Crafts Festival at the Iowa Community Center Saturday. The event had a petting zoo, live entertainment from New Orleans entertainer Matthew Noel, also known as “The Magic Yo-Yo,” and RD ‘Red Dog’ Hebert. Balloon art will also be provided by “Hobo Bill” and Friends, courtesy of The Shriners. Several local artisans were at the event demonstrating their crafts including basket-...

    More >>

    The town of Iowa celebrated it's 10th annual Arts and Crafts Festival at the Iowa Community Center Saturday. The event had a petting zoo, live entertainment from New Orleans entertainer Matthew Noel, also known as “The Magic Yo-Yo,” and RD ‘Red Dog’ Hebert. Balloon art will also be provided by “Hobo Bill” and Friends, courtesy of The Shriners. Several local artisans were at the event demonstrating their crafts including basket-...

    More >>
Powered by Frankly