Coming Soon: Higher Taxes in Your First Paycheck of 2013

Editor’s Note: This article was written and submitted 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.

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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.

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 healthcare 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.