If you think the Fiscal Cliff/Expiring Bush Tax Cuts, or "TAXmageddon" as the accounts are calling it, will not have a HUGE effect on every tax payer in the country you better stop to think again.
The "Fiscal Cliff" is NOT being overblown by the media. In my PROFESSIONAL opinion, as I do this for a living, the media is actually taking it a little too lightly.
Bottom line to every American out there: YOUR taxes are getting ready to skyrocket. These are the most relevant changes for what most EVERYONE will be looking at January 1, 2013 and what will effect their next tax return:
1. Tax Rate Increase- 25% bracket to 28% 28% bracket to 31% 33% bracket to 36% 35% bracket 39.6% 2. Self employment taxes increase 3. Capital gains rate increase from 15% to 20% (even on primary homes) 4. Dividends tax rate increase from 15% to 39.6% - 43.4% 5. Exemptions and itemized deductions for med to high income levels disappear 6. Marriage penalty is reinstated 7. Child Tax Credit reduced from $1000 to $500 8. Earned Income Credit will be slashed 9. Education Savings Accounts will decrease and will eventually be eliminated 10. Credit for Employer-provided educational assistance will be decreased 11. Student loan interest deduction will be reduced 12. Scholarships will be treated as TAXABLE INCOME 13. Increase on bonds for school construction 14. Dependent care tax credit will be decreased 15. Adoption credit disappears 16. Tax credit for education expenses for "Special Needs Children" disappears 17. Employer provided day care credit decrease 18. Alaska Native Settlement Trusts decrease 19. ALL passive income taxes increase (up to 150%) 20. Tax "penalties" for ALL tax payers without private insurance, including low income families, self employed and employees. 21. Payroll Tax Cuts Expire 22. Increase of Employer Taxes 23. Decrease in all business tax credits 24. Increased expense on employer offered Health Care 25. Section 179 deductions will be limited to $25,000 26. Reinstatement of AMT (Alternative minimum tax) for middle class income 27. PAYBACK of the 2009 Stimulus ($400-$800) 28. Tax extenders expire 29. Death Tax the 35% with a $5 million exemption expires/old rates will resume. 30. Medical deductions will be calculated at the 10% with a 3.8% surtax 31. Standard exemptions decrease 32. Student Loan interest deduction will decrease and will be completely phased out 34. Mortgage interest deduction is being decreased 35. ALL Debt forgiveness including foreclosure becomes TAXABLE INCOME 36. The threshold for passive RE income reduced to $45,000
rcmdblgr, I suggest you actually READ the tax code AND all of it's changes BEFORE you tell people they have nothing to worry about.
The fiscal cliff is being overblown by the media and large scale interests within the defense industry. It's a non issue. If we can't do an across the board 10% cut, then there's no hope of ever balancing the budget without a substantial increase in GDP.
I agree 100%. The media is again giving their version of the "facts". Cherry picking to make it sound worse for the average American.
I believe the "fiscal cliff" will do what Congress won't do - make the hard choices. FICA needs to go back up if Social Security is to have a chance to survive - that was supposed to be a tax "holiday". Only the government can see having a holiday last over a year.
And the cuts to defense and social programs need to be done - but believe me, congress would be busy next year adding DoD and social programs back in. If we let the DoD select which programs they really need for their dollar, many contracts on fiscal life support would be dead in a day. Gongress doesn't want to lose those cash infusions to their districts, even if the money could be spent better elsewhere.
GrumpyOldPhart - Obama has everything to do with this - he is treatening a veto over anything that doesn't meet his agenda.
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If you think the Fiscal Cliff/Expiring Bush Tax Cuts, or "TAXmageddon" as the accounts are calling it, will not have a HUGE effect on every tax payer in the country you better stop to think again.
The "Fiscal Cliff" is NOT being overblown by the media. In my PROFESSIONAL opinion, as I do this for a living, the media is actually taking it a little too lightly.
Bottom line to every American out there: YOUR taxes are getting ready to skyrocket. These are the most relevant changes for what most EVERYONE will be looking at January 1, 2013 and what will effect their next tax return:
1. Tax Rate Increase-
25% bracket to 28%
28% bracket to 31%
33% bracket to 36%
35% bracket 39.6%
2. Self employment taxes increase
3. Capital gains rate increase from 15% to 20% (even on primary homes)
4. Dividends tax rate increase from 15% to 39.6% - 43.4%
5. Exemptions and itemized deductions for med to high income levels disappear
6. Marriage penalty is reinstated
7. Child Tax Credit reduced from $1000 to $500
8. Earned Income Credit will be slashed
9. Education Savings Accounts will decrease and will eventually be eliminated
10. Credit for Employer-provided educational assistance will be decreased
11. Student loan interest deduction will be reduced
12. Scholarships will be treated as TAXABLE INCOME
13. Increase on bonds for school construction
14. Dependent care tax credit will be decreased
15. Adoption credit disappears
16. Tax credit for education expenses for "Special Needs Children" disappears
17. Employer provided day care credit decrease
18. Alaska Native Settlement Trusts decrease
19. ALL passive income taxes increase (up to 150%)
20. Tax "penalties" for ALL tax payers without private insurance, including low income families, self employed and employees.
21. Payroll Tax Cuts Expire
22. Increase of Employer Taxes
23. Decrease in all business tax credits
24. Increased expense on employer offered Health Care
25. Section 179 deductions will be limited to $25,000
26. Reinstatement of AMT (Alternative minimum tax) for middle class income
27. PAYBACK of the 2009 Stimulus ($400-$800)
28. Tax extenders expire
29. Death Tax the 35% with a $5 million exemption expires/old rates will resume.
30. Medical deductions will be calculated at the 10% with a 3.8% surtax
31. Standard exemptions decrease
32. Student Loan interest deduction will decrease and will be completely phased out
34. Mortgage interest deduction is being decreased
35. ALL Debt forgiveness including foreclosure becomes TAXABLE INCOME
36. The threshold for passive RE income reduced to $45,000
rcmdblgr, I suggest you actually READ the tax code AND all of it's changes BEFORE you tell people they have nothing to worry about.
I believe the "fiscal cliff" will do what Congress won't do - make the hard choices. FICA needs to go back up if Social Security is to have a chance to survive - that was supposed to be a tax "holiday". Only the government can see having a holiday last over a year.
And the cuts to defense and social programs need to be done - but believe me, congress would be busy next year adding DoD and social programs back in. If we let the DoD select which programs they really need for their dollar, many contracts on fiscal life support would be dead in a day. Gongress doesn't want to lose those cash infusions to their districts, even if the money could be spent better elsewhere.
GrumpyOldPhart - Obama has everything to do with this - he is treatening a veto over anything that doesn't meet his agenda.