Although the new tax package Congress passed on New Year’s Day will prevent income tax increases from affecting 99% of Americans, most households in the United States will still end up paying more federal taxes in the coming year. A temporary Social Security payroll tax reduction is set to expire, which will affect nearly every wage earner in the country. In 2012, the two-percentage point reduction in the Social Security payroll tax was worth roughly $1,000 to a worker bringing in $50,000 a year. In addition, income taxes on the wealthy are going up as well. According to a research group called the Tax Policy Center, approximately 77% of American households will be hit with higher federal taxes in 2013 under the recently negotiated agreement.
The following outlines how tax increases will affect American households at various income levels:
Annual income: $20,000 – $30,000
Average tax increase: $297
Annual income: $30,000 – $40,000
Average tax increase: $445
Annual income: $40,000 – $50,000
Average tax increase: $579
Annual income: $50,000 – $75,000
Average tax increase: $822
Annual income: $75,000 – $100,000
Average tax increase: $1,206
Annual income: $100,000 – $200,000
Average tax increase: $1,784
Annual income: $200,000 – $500,000
Average tax increase: $2,711
Annual income: $500,000 – $1 million
Average tax increase: $14,812
Annual income: More than $1 million
Average tax increase: $170,341
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Although high-income families in the U.S. will see the biggest tax increases, they aren’t the only ones set to pay higher taxes in 2013. Many middle- and low-income households will pay higher taxes this year as well. High-income families, however, will also pay higher taxes in 2013 as part of Obama’s 2010 health care law, which imposed a new 3.8% tax on investment income for individuals making more than $200,000 a year and couples making more than $250,000 a year. This tax increase could have a significant impact on many households in the United States, possibly putting a financial burden on wage earners facing other forms of debt and their families. If you are considering filing for bankruptcy in Oklahoma, in order to discharge your debt or develop a repayment plan based on your income, contact our reputable attorneys at Oklahoma Legal Center to discuss your options.