The ramifications of the Fiscal Cliff still bring confusion to many people. Although there may be benefits for some, the majority of people will see changes this coming tax year. The following is a short summary of the many changes most taxpayers will see.
1. Since everyone’s taxes went up-on January 1st, we will all pay higher taxes.
2. Republican and Democrats did agree on something. They agreed that “high income earners” are people that make $400,000 if single and $450,000 if married.
3. Tax rates will rise for high-income earners to 39.6%.
4. Tax rates were extended for most taxpayers.
5. The Patient Protection and Affordable Care Act went untouched.
6. The alternative minimum tax is fixed.
7. The Social Security tax break expired.
8. Unemployment benefits have been extended for a year.
9. Estate tax remains at a $5.12 million exemption.
10. More tax talks are in the works for February to resolve further issues.
The Fiscal Cliff may have been averted, but we are still at the mercy of the federal government.
For more information on the Fiscal Cliff and new tax laws, contact the tax professionals of Gonzalez & Arrambide, Inc. at 956-447-9009.