Tuesday, December 28, 2010

Hooray for Tax Cut Holidays!!!

2011 is right around the corner and with it, our paychecks will have a little something extra. As part of the deal extending the Bush-era tax cuts, a number of employees will receive a 2% reduction in payroll taxes. As of now, this reduction is temporary (it will last only a year). What does this mean for me and likely for you? Mo' money! $40 'extra' per paycheck in my case. I used a nifty calculator at Kiplinger's website to confirm my own calculations.

Naturally, the first thing I did was update my 2011 spending plan to reflect this anticipated increase (too soon?). Then I started thinking about what I would do with an extra $80 a month. It isn't much, but it kinda is (with the price of gasoline going up, I think these few bucks will definitely come in handy!). At any rate, I'd like to plan how I would spend it. Here are my ideas:
  • Add to my car payments
  • Use for travel (particularly airfare to see the beau; I haven't budgeted for this for the first quarter of 2011 and I need to purchase airfare for February and March).
  • Add to my savings (I did say I want to save $10,000 in 12 months, didn't I?)
  • Add to my Roth (I also said I wanted to max out the ol' IRA...)
  • Go shopping...a little
The last idea is inspired by my long-held desire to dress more stylishly. Undoubtedly, this is also what is expected of us, as this tax cut is labeled a sort of "stimulus package."

What are your plans for the few bucks additional to your 2011 paychecks?

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