Trump’s payroll tax cut: What does it mean for you?
OCEAN CITY, Md. – A recent tax deferment pushed by President Donald Trump could mean your paycheck may look a lot bigger over these next couple of months. But experts say this change could do more harm than good. Phillip Cheung, a CPA in Ocean City, tells 47 ABC that while it may seem like you’re making more money that extra income won’t be yours for long. Recently Trump signed an executive order to ensure no more taxes taken are taken of your payroll until 2021. But experts say you will have to pay this money back starting next year. This is why they say it’s critical that you prepare and save as much money as you can now to soften the blow when double the taxes are taken out of your paycheck in 2021.
“The benefit now is between now and the end of the year is better take-home paychecks. Which is great, but come the first of the year your paycheck will be less in comparison to the increase in taxes that were delayed from 2020,” said Cheung.
Experts add that employers are able to opt-out of the payroll tax cut option.