Payroll Tax Cut Bill Extension is Now Approved!

After a week of uncertainty in Washington, Congress approved the extension of the payroll tax cut bill this morning, which if not passed, would impact 160 million taxpayers beginning January 1.

The payroll tax cut bill extension keeps taxpayers’ portion of social security tax at 4.2%, renews  unemployment benefits, and the medicare reimbursement rate for an additional two months.  When Senate leaders return from vacation, a joint House Senate panel is set to negotiate how to continue the tax break through the end of 2012.

Now Congress has gone on vacation and we can start to enjoy our holiday without worrying about a loss of income for the first two months of the year. The extension of the payroll tax bill will continue to help a typical family making $50,000 per year keep $40 additional per paycheck.

Now, how will the $40 per paycheck savings help you as you start the new year?