CAT Tracks for January 7, 2011

CAT Tracks for January 7, 2011

Sorry...couldn't resist it.

Even sorrier that it's true!

Income taxes (and income tax withholding) for 2011 will go up, starting with the January 15th paycheck (to be paid on the 14th since the 15th is a Saturday.)

Cairo School District Business Manager Justin Miller sent CAT a "heads up" on the new tax table...for comparison to the one used for last year. (See below.)

Comparing the 2010 and 2011 charts:

Looking at the 2010 tax chart...if you were in the $10,425 - $36,050 income bracket, your tax was $437.50 plus 15% of excess over $10,425. Looking at the 2011 tax chart...the tax for that same (approximate) bracket is $850.00 plus 15% of the excess. That's an increase of $412.50.

Looking at the 2010 tax chart...if you were in the $36,050 - $67,700 income bracket, your tax was $4,281.25 plus 25% of excess over $36,050. Looking at the 2011 tax chart...the tax for that same (approximate) bracket is $4,750.00 plus 25% of the excess. That's an increase of $468.75.

Bottom Line: You can expect to pay an extra $400-and-something extra in income taxes in 2011...and have an extra $17 to $19.50 withheld per paycheck. (Those last numbers were rounded to the nearest 50 cents.)
Note: The extra withholding should cover the increase in taxes, so there is no need to change your Federal W-4...unless you want to.
[The W-4 is the tax document that allows you some control over what your employer withholds for taxes from your paycheck. If you owed taxes last year, you could fill out a new W-4 and have them hold out more from each paycheck, avoiding the big payment at tax time. If you got a big refund last year (lucky dog, uh, CAT!), then you could fill out a new W-4 and claim more exemptions/deductions...if you are legally entitled. If you had a significant "life event" during the year - got married, got divorced, widowed, had children - you might want/need to change your W-4. You can file a new W-4 at any time during the year by contacting your employer. As you can probably tell...I used to teach this stuff! Couldn't resist the "teaching moment"...]
Back on topic...
Justin is in the process of preparing the January 15th payroll and will be distributing a copy of the notice to all employees. (That notice will be included in the envelope containing your W-2...also to be distributed on January 14th.)
If you need/desire to change your W-4, contact the Central Office at your earliest convenience.