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The Uncertainty of January

January 21st, 2015 at 03:27 pm

This is kind of small in the grand scheme of things but January finances always drive me a bit batty. I'm the type of person that just likes to know in advance and plan and January is just that month of the year that you just don't know …… until you do

Raise
New Health Insurance Rates
Other Deduction Changes

So I never know exactly what the paychecks are going to be until I see them in the account. But thankfully tomorrow is the last paycheck of the month, and then I'll be able to plan all the future paychecks more accurately.

So I've been taking a poll of people around me. In January of this year, our State (Illinois) Income tax rate decreased. This effects everybody in the State who earns a wage.

Basically a couple of years ago our politicians passed an increase and sold it to the Public as a "Temporary Measure to Solve Our Fiscal Crises!" In order to make that look realistic, they put automatic rate decreases into the legislation that unless the legislature voted to extend the higher rate or make it permanent, the rates eventually drop down toward prior levels.

They then raised the state spending by amounts greater than the increase. And of course no politician who wants to be re-elected is ever going to say "I WANT TO RAISE YOUR TAXES EVEN MORE!!!!" to the voting public.

So here we are with even more spending and decreasing revenue, but everybody knows the Illinois government is in huge financial trouble. We don't need a poll for that.

But this is my thing. I have been conducting an informal poll of people around me and so far I've found 16 people who didn't have a clue that their state income tax rate increased, or that they've now decreased ….. and 2 who actually noticed.

Sometimes I think I'm probably overly anal about things like this but sometimes I just want to line the world up in front of me and scream: PAY ATTENTION PEOPLE!!!!

Posted in Personal Finance | 3 Comments »

3 Responses to “The Uncertainty of January”

  1. CB in the City Says:
    January 21st, 2015 at 03:44 pm 1421855094
    1421855094

    I didn't notice! I tend to tune out when they talk about state government on the news. And I don't even see my paycheck; it goes into direct deposit, and you have to log into the College's HR site to actually see a copy.

    I pay more attention to the sales tax, which remains the same, at least in my county.

    So you're saying that my paycheck is now bigger due to less tax, and this may also affect the payment/refund next year?

  2. JulieAlbright Says:
    January 21st, 2015 at 03:57 pm 1421855831
    1421855831

    Well, it really shouldn't have much of an effect on whether you will get a refund or owe on your state taxes. Your state income tax rate increased from 3% to 5% on January 1, 2011. Actually most people didn't notice that because if you recall, the Federal Government temporarily reduced the FICA tax rates for Individuals at the same time, so most people didn't see a huge net difference in their paychecks. The Federal government let you keep more money, and Illinois took it away.

    But this year your state tax rate decreased from 5% to 3.75%. So you in effect received a 1.25% raise - Spend it wisely!

  3. LuckyRobin Says:
    January 21st, 2015 at 08:34 pm 1421872493
    1421872493

    I have to wait until Friday, and then I will finally know what the new monthly budget can be based on. It is hard to wait, because I like to know things immediately.

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