I happen to live near Chicago and we have a saying here that says Chicago has two seasons—winter and construction.
It seems like the country has two seasons as well: Election time and preparation for election time!
The Presidential election is behind us now and the largest thing starring at the President is what has been deemed the “Fiscal Cliff.”
What is the fiscal cliff? It is a term that is going to be said a lot in the coming days and could have a major impact on your pocketbook.
The federal government faces a December 31st deadline to decide on the economic future. January 1 is when the Budget Control Act of 2011 will go into effect. The act is combination of expiring tax cuts and cuts to government spending that will begin January 1.
Essentially, it would throw America back into a recession as more than $500 billion would be taken out of the economy.
It is also estimated that two million jobs would be sucked from the economy. Certainly, not what America is seeking at this point?
Although the President has until December 31 to put a plan together, if action isn’t taken by Thanksgiving it would be understandable that markets would start to have a negative impact. Businesses would hold back on investing and hiring.
How are you preparing for the “cliff?” Are you investing now? Do you plan on waiting until after December 31?
In the meantime, if you would like to start getting prepared for tax season, we would be more than happy to meet with you. Feel free to stop by any Liberty Tax office!
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.