How much of your increased paycheck will be taxed? - WBRC FOX6 News - Birmingham, AL

How much of your increased paycheck will be taxed?

Source: WBRC Video Source: WBRC Video
BIRMINGHAM, AL (WBRC) -

People are noticing more cash in their paychecks -- and there's more good news.

The Congressional Budget Office estimates employers across the country should withhold between $10-15 billion less each month from your paycheck, which means more money for you. Congress' changes the tax rates is the cause.

"If you were earning $50,000, you were taxed at 15 percent," Michael Wagner said. "Now that same $50,000 is being taxed at 12 percent."

Michael Wagner is a certified financial planner with the Welch Group in Birmingham. Wagner says it took some time to see the impact of the tax plan.

"So you are seeing individuals in their pay checks a little bit of a surprise in February."

There are varying factors -- how much are you paid, how often you are paid and the number of withholding allowances -- but if you're worried about getting hit with higher taxes, Wagner said that shouldn't happen.

"We've done a study actually its the exact opposite," Wagner said. "Over 80 percent of Americans will receive a tax benefit, lower taxes."

Wagner said the payroll companies may spread over the extra cash over the year to lessen the tax burden.

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