Whew, been off the radar for a minute but I am still here to bring you the 411 on personal finance. Now this obviously is not breaking news but you know I have to throw in my two cents. And in case you did not know, now you know. Our government in their infinite wisdom when they passed the new tax legislation decided to give tax payers a break. This break comes in the form of a payroll tax break. This tax break like many others is piling on debt to our national deficit. However, let us discuss the good part.

 The good part is your social security withholding will now be reduced by 2%. This takes affect January 1, 2011, however depending on your employers payroll system the change may take time to implement. The IRS says that employers should have the changes in no later than January 31, 2011. So make sure to check your paycheck to make sure these changes have been implemented. Also, if you company was unable to implement your changes immediately you should get an additional payment as soon as they are in affect ot reimburse you for the excess taxes that were withheld. What you will actually benefit depends on what you make but I suppose something is better than nothing. Of course I would rather see less debt and a stronger economy. And we would also see a much more beneficial gain from a stronger dollar and lower inflation which would make many of the day to day necessities less expensive. This in turn would translate into more money in everyone's pocket and I would almost guarantee put a lot moe money in tax payers pockets then a little 2% payroll reduction.

News Release from IRS - Payroll Tax Cut to Boost Take-Home Pay for Most Workers; New Withholding Details Now Available on IRS.gov

Matt