Many Americans have been
concerned about the “Fiscal Cliff” and I even wrote about how it was going to
take a Christmas
Miracle to save us from going overboard.
However, one common misperception about the cliff is that it only
applies to 2013 taxes.
However, according to the Tax
Policy Center, approximately 28 million families would owe the IRS $86 billion
more than they anticipated for this year.
Essentially, most Americans
would face the “Alternative Minimum Tax,” which is imposed at a nearly flat
rate on an adjusted amount of taxable income.
The present AMT was enacted in 1982 and limits tax benefits from a
variety of deductions.
The concern with having this
retroactive for 2012 is that that taxpayers may not have set enough aside to
pay their taxes or had enough withheld.
This could cause greater challenges for an already struggling
The President and lawmakers
continue to work through the weekend to hopefully reach a deal that would save
us from going off the cliff. Many experts are now speculating that we will go over the cliff and that Congress would potentially reach a deal in early 2013
and make it retroactive.
In the meantime, come on into
Liberty Tax and we would be happy to help you plan for your taxes.
It is nearing the end of the
year, so you do have time to make some last minute donations to help your
deductions. Feel free to donate any
items you may have updated (get a receipt!) and of course financial donations
to qualified charities would help you pay less on your tax bill.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.