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Congress recently passed and the President signed the Temporary Payroll Tax Cut Continuation Act of 2011. This act temporarily extends the two percentage point payroll tax cut for employees by continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through February 29, 2012.
According to the Tax Foundation, Tax Freedom Day this year is April 12, 2011. This is the day you stop working for the government and start working for yourself. This includes federal, state and local taxes. Unfortunately this is three days more than it was last year.
According to the Tax Foundation, "Americans will pay more in taxes in 2011 than they will spend on groceries, clothing and shelter." That's amazing.
On December 17, 2010, President Obama signed the tax bill into law after months of negotiations, and to our benefit, this law will be in effect for the next two years. Enactment of this tax law confirms that individuals at all income levels won’t face an automatic hike in taxes beginning in January 2011. There are several areas to talk about and some key points to consider now that the holiday season is over and tax season is upon us.