Coming Soon: Higher Taxes in Your First Paycheck of 2013

Story by C. Zawadi Morris.

New Yorkers will see a spike in taxes taken out of their first paychecks of 2013—a provision of the fiscal cliff deal that allows for a raise in Social Security payroll taxes. But the spike would have been much higher had it not been for the fiscal cliff deal, The New York Post reports.

The higher tax provision – 6.2 percent, up two points from the previous 4.2 percent – is a part of an effort to pay for the larger-than-life national debt and also to stimulate economic growth.

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 For families that make $50,000 or less, that means an extra tax payment of $579 a year, while families earning between $500,000 and $1 million will see an average rise of nearly $15,000 in their tax bills, according to the Tax Policy Center.

Other increases include:

* The expiration of Bush-era tax cuts, including the disappearance of the $1,000-per-child credit and higher investment and estate taxes.

 * A 3.8 percent surtax on certain investment income for individuals earning more than $200,000 per year ($250,000 for couples) as part of Obama’s 2010 health-care law.

 * The tax rate on inherited estates will go up from 35 to 40 percent, though the first $5 million are exempt for individuals and $10 million for families.