For those
of us a little confused about federal budget and tax policy, the Tax Foundation recently released a primer
on the "fiscal cliff" that lays out all of the tax provisions and
budget bills expiring on December 31, 2012.
The tax
changes scheduled to take effect on January 1, 2013 alone are wide-ranging:
·
The
2001 and 2003 tax cuts "Bush tax cuts" are set to expire, which would
increase marginal income tax rates, increase the tax on long-term capital gains
and qualified dividends, decrease the standard deduction for married couples,
and decrease the child tax credit.
·
The
estate tax will increase, from 35% on anything above $5.12 million to 55% on
anything about $1 million.
·
The
alternative minimum tax (AMT) patch is set to expire, resulting in tax
increases for taxpayers earning between $50,000 and $200,000.
·
The
employee portion of the payroll tax will increase from 4.2% to 6.2%.
·
Several
dozen tax deductions will expire, including those for tuition expenses,
alternative fuels, and mortgage insurance premiums.
