Taxes and the next new habit

Just a quick primer on what happened this month to your paycheck if you work for another company since I noticed more than one person ranting on Facebook with clearly NO CLUE what just happened.

Back in 2009, as part of a budget deal, a Social Security payroll tax holiday was declared. They rolled back what HAD previously been a 6.2% deduction from your paycheck to a 4.2% deduction.

Since this was on Social Security withholding, it specifically targeted and helped out people who make less than the maximum salary for SS withholding – which is currently around 100k.

In other words you received an additional 2% of your gross salary on the first 100k you made in your net pay if you worked for another company.

If you are self employed, or a contract employee in a situation where you are paid WITHOUT Social Security taxes being withheld than you were not impacted by the payroll tax holiday.

It was – emphasis here – a HOLIDAY. Designed to put more money in people’s hands to stimulate the economy. It is essentially a non-partisan strategy. Yes, it was suggested by Obama and signed into law by him, but there were equal amounts on both sides who either liked it or didn’t like it.

So, it was TEMPORARY and it had tenuous support at best.

I suspected it would go away either in 2013 or 2014 – after the election of course. No way Obama would have let it expire in an election year 🙂 Hey, I support him, but I know when he is playing the game too!

Anyway, with this last tax deal passed for the 2013 year, it was indeed removed so now your withholding for Social Security has reverted BACK to the 6.2% rate that it was just three years ago.

Does it hurt? Yeah, for sure. But, it was NOT a raise in your overall tax rate at all. This is Social Security. Look at those statements you get in the mail every quarter on your Social Security account balances. That’s where your government protected retirement account is. Basically you have been contributing 2% less to your retirement  – now it is back.

If you were in the 20% income tax rate bracket last year, you are still in that bracket this year.


I did my own preliminary 2012 tax returns this past weekend and was thrilled to see that I had planned my own federal and state withholding pretty darn well. Even though I have been doing this for years, I am never entirely sure how it will turn out! Lordy they change laws so much, even small things like deductions that are also, like the SS payroll tax rate, temporary or have a cap on the total. Next thing you know they either let those expire, make them permanent or increase the limits. Aack! It’s a tax preparer/planners nightmare I tell ya.


So, I think I’ve settled on a new habit to pick up in February. Keeping with the “small increments” rule and knowing that while my running plans for this year will remain fairly steady I do definitely want to continue improving/maintaining my overall cross fit strength. There is a GREAT workout that I will link to in a separate post next week that is actually pretty intense when done as a full circuit, BUT…

It is easy to break down into smaller increments.

It does not require any equipment that I don’t already have.

So my goal is to spend 15 minutes either in the morning (not very likely, but I want to keep my options open) or in the evening doing a segment of this workout. I’ll rotate through them so that I am working out different muscle groups each night.

There are 6 sets in the workout which should take 15 minutes. I am not crazy enough to think I could actually do 6 nights per week AND also do at least one long trail run.

So, for February I will aim for 4 workouts a week.

If I do this properly I will be writing whining posts about sore muscles very soon 🙂

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