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Payroll tax holiday ends, Montanans see more money come out of their paychecks

Published On: Jan 06 2013 09:20:16 AM MST
BOZEMAN, Mont. -

When Bozeman local Micah Porter-Smith received his last paycheck, something caught his eye.

"I noticed it was a little bit smaller than my regular paychecks after the first of the year," says Porter-Smith.

Porter-Smith says it was only a difference of around three dollars but worries it will add up over time.

"I just wondered, kind of, what more they could be taking out, really," says Porter-Smith.

With a Social Security tax rate increase of 2%, those making $30,000 a year will notice $50 less in their paycheck each month and $600 less a year. Those making $60,000 will see $100 a month less in their paycheck and $1,200 less a year.

That means, if you get paid bi-weekly, you'll see $23 less per paycheck if you make $30,000 a year and $46 less per paycheck if you make $60,000 a year.

Amanda Ehlers says she noticed a big difference in her last paycheck.

"I don't know if it's going to be a big impact, but we'll definitely have to stay on budget more," says Ehlers.

Though she says she's not worried, Ehlers says it will take some getting used to.

"We'll probably cut back on entertainment stuff, like movies and dining out," explains Ehlers.

Marine veteran Benjamin Thompson says he's not worried about the tax rate increase, either. He starts a new job Monday after three tours in Iraq and months of searching.

"I'm glad to be working so, as far as a paycheck goes, as long as I get a paycheck, I'm better than most people out there," says Thompson.

In fact, Thompson says he's happy to pay his fair share.

"As far as Social Security goes, one day I'll be collecting it, hopefully there's some left," says Thompson.

For folks like Porter-Smith, who say they're concerned about more money coming out of their paycheck every month, Wells Fargo financial advisors recommend creating a budget and avoid taking money out of their savings account. 

They say refinancing your mortgage to a lower monthly payment, consolidating credit card debt and cutting back on credit card spending are also ways to combat the hike.